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                      INTERNATIONAL SPECIALTY HOLDINGS INC.

                              SERIES A AND SERIES B
                      10 5/8% SENIOR SECURED NOTES DUE 2009

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

                                    INDENTURE

                          Dated as of December 13, 2001

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

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

                            Wilmington Trust Company

                                     Trustee

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

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<PAGE>

                             CROSS-REFERENCE TABLE*

        TRUST INDENTURE
        ACT SECTION                                            INDENTURE SECTION
        310(a)(1)...........................................          7.10
             (a)(2).........................................          7.10
             (a)(3).........................................          N.A.
             (a)(4).........................................          N.A.
             (a)(5).........................................          7.10
             (b)............................................          7.10
             (c)............................................          N.A.
        311(a)..............................................          7.11
             (b)............................................          7.11
             (c)............................................          N.A.
        312(a)..............................................          2.05
             (b)............................................         12.03
             (c)............................................         12.03
        313(a)..............................................          7.06
             (b)(2).........................................          7.07
             (c)............................................       7.06;13.02
             (d)............................................          7.06
        314(a)..............................................       4.03;13.02
             (c)(1).........................................         12.04
             (c)(2).........................................         12.04
             (c)(3).........................................          N.A.
             (e)............................................         12.05
             (f)............................................          N.A.
        315(a)..............................................          7.01
             (b)............................................       7.05,13.02
             (c)............................................          7.01
             (d)............................................          7.01
             (e)............................................          6.11
        316(a) (last sentence)..............................          2.09
             (a)(1)(A)......................................          6.05
             (a)(1)(B)......................................          6.04
             (a)(2).........................................          N.A.
             (b)............................................          6.07
             (c)............................................          2.12
        317(a)(1)...........................................          6.08
             (a)(2).........................................          6.09
             (b)............................................          2.04
        318(a)..............................................         12.01
             (b)............................................          N.A.
             (c)............................................         12.01

N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                PAGE

                                   ARTICLE 1.

                          DEFINITIONS AND INCORPORATION

                                  BY REFERENCE
<S>                   <C>
   Section 1.01.      Definitions..................................................................1
   Section 1.02.      Other Definitions...........................................................15
   Section 1.03.      Incorporation by Reference of Trust Indenture Act...........................16
   Section 1.04.      Rules of Construction.......................................................16

                                    ARTICLE 2.
                                    THE NOTES

   Section 2.01.      Form and Dating.............................................................16
   Section 2.02.      Execution and Authentication................................................17
   Section 2.03.      Registrar and Paying Agent..................................................18
   Section 2.04.      Paying Agent to Hold Money in Trust.........................................18
   Section 2.05.      Holder Lists................................................................18
   Section 2.06.      Transfer and Exchange.......................................................19
   Section 2.07.      Replacement Notes...........................................................30
   Section 2.08.      Outstanding Notes...........................................................30
   Section 2.09.      Treasury Notes..............................................................31
   Section 2.10.      Temporary Notes.............................................................31
   Section 2.11.      Cancellation................................................................31
   Section 2.12.      Defaulted Interest..........................................................31
   Section 2.13.      CUSIP Numbers...............................................................32
   Section 2.14.      Record Date.................................................................32

                                   ARTICLE 3.
                            REDEMPTION AND PREPAYMENT

   Section 3.01.      Notices to Trustee..........................................................32
   Section 3.02.      Selection of Notes to Be Redeemed...........................................32
   Section 3.03.      Notice of Redemption........................................................32
   Section 3.04.      Effect of Notice of Redemption..............................................33
   Section 3.05.      Deposit of Redemption Price.................................................33
   Section 3.06.      Notes Redeemed in Part......................................................34
   Section 3.07.      Optional Redemption.........................................................34
   Section 3.08.      Mandatory Redemption........................................................34
   Section 3.09.      Offer to Purchase by Application of Excess Proceeds.........................34

                                    ARTICLE 4.
                                    COVENANTS

   Section 4.01.      Payment of Notes............................................................36
   Section 4.02.      Maintenance of Office or Agency.............................................36
   Section 4.03.      Reports.....................................................................37
   Section 4.04.      Compliance Certificate......................................................37
   Section 4.05.      Taxes.......................................................................38
   Section 4.06.      Stay, Extension and Usury Laws..............................................38
   Section 4.07.      Restricted Payments.........................................................38
   Section 4.08.      Dividend and Other Payment Restrictions Affecting Restricted
                       Subsidiaries...............................................................40

                                       i
<PAGE>

<CAPTION>
<S>                   <C>
   Section 4.09.      Incurrence of Indebtedness and Issuance of Preferred Stock..................41
   Section 4.10.      Asset Sales.................................................................43
   Section 4.11.      Transactions with Affiliates................................................44
   Section 4.12.      Liens.......................................................................45
   Section 4.13.      Business Activities.........................................................45
   Section 4.14.      Corporate Existence.........................................................45
   Section 4.15.      Offer to Repurchase Upon Change of Control..................................45
   Section 4.16.      Payments for Consent........................................................47
   Section 4.17.      Designation of Restricted and Unrestricted Subsidiaries.....................47
   Section 4.18.      Changes in Covenants When Notes Rated Investment Grade......................47
   Section 4.19.      Escrow Account..............................................................47

                                   ARTICLE 5.
                                  SUCCESSORS

   Section 5.01.      Merger, Consolidation, or Sale of Assets....................................48
   Section 5.02.      Successor Corporation Substituted...........................................48

                                   ARTICLE 6.
                              DEFAULTS AND REMEDIES

   Section 6.01.      Events of Default...........................................................49
   Section 6.02.      Acceleration................................................................50
   Section 6.03.      Other Remedies..............................................................51
   Section 6.04.      Waiver of Past Defaults.....................................................51
   Section 6.05.      Control by Majority.........................................................51
   Section 6.06.      Limitation on Suits.........................................................51
   Section 6.07.      Rights of Holders of Notes to Receive Payment...............................52
   Section 6.08.      Collection Suit by Trustee..................................................52
   Section 6.09.      Trustee May File Proofs of Claim............................................52
   Section 6.10.      Priorities..................................................................53
   Section 6.11.      Undertaking for Costs.......................................................53

                                   ARTICLE 7.
                                    TRUSTEE

   Section 7.01.      Duties of Trustee...........................................................53
   Section 7.02.      Rights of Trustee...........................................................54
   Section 7.03.      Individual Rights of Trustee................................................55
   Section 7.04.      Trustee's Disclaimer........................................................55
   Section 7.05.      Notice of Defaults..........................................................55
   Section 7.06.      Reports by Trustee to Holders of the Notes..................................55
   Section 7.07.      Compensation and Indemnity..................................................56
   Section 7.08.      Replacement of Trustee......................................................56
   Section 7.09.      Successor Trustee by Merger, etc............................................57
   Section 7.10.      Eligibility; Disqualification...............................................57
   Section 7.11.      Preferential Collection of Claims Against Issuer............................57

                                   ARTICLE 8.
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

   Section 8.01.      Option to Effect Legal Defeasance or Covenant Defeasance....................58
   Section 8.02.      Legal Defeasance and Discharge..............................................58
   Section 8.03.      Covenant Defeasance.........................................................58
   Section 8.04.      Conditions to Legal or Covenant Defeasance..................................59

                                       ii
<PAGE>

<CAPTION>
<S>                   <C>
   Section 8.05.      Deposited Money and Government Securities to be Held in Trust;
                       Other Miscellaneous Provisions ............................................60
   Section 8.06.      Repayment to Issuer.........................................................60
   Section 8.07.      Reinstatement...............................................................60

                                   ARTICLE 9.
                        AMENDMENT, SUPPLEMENT AND WAIVER

   Section 9.01.      Without Consent of Holders of Notes.........................................61
   Section 9.02.      With Consent of Holders of Notes............................................61
   Section 9.03.      Compliance with Trust Indenture Act.........................................63
   Section 9.04.      Revocation and Effect of Consents...........................................63
   Section 9.05.      Notation on or Exchange of Notes............................................63
   Section 9.06.      Trustee to Sign Amendments, etc.............................................63

                                   ARTICLE 10.
                             Collateral and security

   Section 10.01.     Pledge Agreement............................................................63
   Section 10.02.     Recording and Opinions......................................................64
   Section 10.03.     Release of Collateral.......................................................64
   Section 10.04.     Certificates of the Issuer..................................................65
   Section 10.05.     Certificates of the Trustee.................................................65
   Section 10.06.     Authorization of Actions to Be Taken by the Trustee Under the Pledge
                       Agreement..................................................................65
   Section 10.07.     Authorization of Receipt of Funds by the Trustee Under the Pledge
                       Agreement..................................................................66
   Section 10.08.     Termination of Security Interest............................................66

                                   ARTICLE 11.
                           satisfaction and discharge

   Section 11.01.     Satisfaction and Discharge..................................................66
   Section 11.02.     Application of Trust Money..................................................67

                                   ARTICLE 12.
                                  MISCELLANEOUS

   Section 12.01.     Trust Indenture Act Controls................................................67
   Section 12.02.     Notices.....................................................................67
   Section 12.03.     Communication by Holders of Notes with Other Holders of Notes...............69
   Section 12.04.     Certificate and Opinion as to Conditions Precedent..........................69
   Section 12.05.     Statements Required in Certificate or Opinion...............................69
   Section 12.06.     Rules by Trustee and Agents.................................................69
   Section 12.07.     No Personal Liability of Directors, Officers, Employees and
                        Stockholders..............................................................69
   Section 12.08.     Governing Law...............................................................70
   Section 12.09.     No Adverse Interpretation of Other Agreements...............................70
   Section 12.10.     Successors..................................................................70
   Section 12.11.     Severability................................................................70
   Section 12.12.     Counterpart Originals.......................................................70
   Section 12.13.     Table of Contents, Headings, etc............................................70

                                    EXHIBITS

Exhibit A1        FORM OF NOTE
Exhibit A2        FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B         FORM OF CERTIFICATE OF TRANSFER
</TABLE>

                                      iii
<PAGE>

Exhibit C         FORM OF CERTIFICATE OF EXCHANGE
Exhibit D         FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL
                    ACCREDITED INVESTOR
Exhibit E         FORM OF PLEDGE AGREEMENT

                                       iv

<PAGE>

         INDENTURE dated as of December 13, 2001 among  INTERNATIONAL  SPECIALTY
HOLDINGS  INC., a Delaware  corporation  (the  "ISSUER")  and  WILMINGTON  TRUST
COMPANY, as trustee (the "TRUSTEE").

         The Issuer and the  Trustee  agree as follows  for the  benefit of each
other and for the equal and ratable benefit of the Holders of the 10 5/8% Series
A Senior  Secured Notes due 2009 (the "SERIES A NOTES") and the 10 5/8% Series B
Senior Secured Notes due 2011 (the "SERIES B NOTES"):

                                   ARTICLE 1.
                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

SECTION 1.01.     DEFINITIONS.

         "144A  GLOBAL  NOTE" means a global note  substantially  in the form of
Exhibit A1 hereto  bearing  the Global  Note  Legend and the  Private  Placement
Legend and  deposited  with or on behalf of, and  registered in the name of, the
Depositary  or its nominee  that will be issued in a  denomination  equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.

         "2003 NOTES" means the 9% Senior Notes due 2003 of ISP.

         "2011 NOTE INDENTURE" means that certain Indenture dated as of June 27,
2001 by and among ISP Chemco Inc., ISP Chemicals Inc., ISP Minerals Inc. and ISP
Technologies  Inc.,  the  guarantors  signatory  thereto  and  Wilmington  Trust
Company,  as  trustee,  as amended,  modified,  renewed,  refunded,  replaced or
refinanced from time to time.

         "2011  NOTES" means the 10 1/4% Senior  Subordinated  Notes due 2011 of
ISP Chemco Inc., ISP Chemicals Inc., ISP Minerals Inc. and ISP Technologies Inc.

         "ACQUIRED  DEBT"  means,  with  respect to any  specified  Person:  (1)
Indebtedness  of any other  Person  existing  at the time such  other  Person is
merged with or into or became a Subsidiary of such specified Person,  whether or
not such  Indebtedness is incurred in connection with, or in  contemplation  of,
such other  Person  merging  with or into,  or  becoming a  Subsidiary  of, such
specified Person;  and (2) Indebtedness  secured by a Lien encumbering any asset
acquired by such specified Person.

         "ADDITIONAL  NOTES"  means any Notes  (other  than the  Initial  Notes)
issued under this  Indenture in  accordance  with  Sections 2.02 and 4.09 hereof
(including the Exchange Notes), as part of the same series as the Initial Notes.
For the  avoidance  of doubt,  all Notes (other than the Initial  Notes)  issued
under  this  Indenture  shall be deemed to have been  issued as part of the same
series as the Initial Notes notwithstanding that such Notes have different dates
from which  interest  accrues  thereon,  have different  "CUSIP"  numbers or may
otherwise be referred to as different "A" series.

         "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 purposes of this definition,  "control,"
as  used  with  respect  to  any  Person,  means  the  possession,  directly  or
indirectly,  of the power to direct or cause the direction of the  management or
policies of such Person, whether through the ownership of voting securities,  by
agreement   or   otherwise.   For  purposes  of  this   definition,   the  terms
"controlling,"  "controlled by" and "under common control with" have correlative
meanings.

         "AGENT" means any Registrar,  co-registrar,  Paying Agent or additional
paying agent.

<PAGE>

         "APPLICABLE PROCEDURES" means, with respect to any transfer or exchange
of or for  beneficial  interests in any Global Note, the rules and procedures of
the  Depositary,  Euroclear  and  Clearstream  that  apply to such  transfer  or
exchange.

         "ASSET  SALE"  means:  (1)  the  sale,   lease,   conveyance  or  other
disposition  of any assets or  rights,  other  than  sales of  inventory  in the
ordinary course of business  consistent  with past practices;  provided that the
sale,  conveyance or other disposition of all or substantially all of the assets
of the Issuer and its  Subsidiaries  taken as a whole  will be  governed  by the
provisions of Sections  4.15 and 5.01 and not by the  provisions of Section 4.10
hereof; and (2) the issuance of Equity Interests in the Issuer's Subsidiaries or
the sale of Equity Interests in any of the Issuer's Subsidiaries.

         Notwithstanding  the preceding,  the following items will not be deemed
to be Asset Sales:  (1) a transfer of assets between or among the Issuer and its
Restricted Subsidiaries;  (2) an issuance of Equity Interests by a Subsidiary to
the  Issuer  or to a  Restricted  Subsidiary  of the  Issuer;  (3)  the  sale of
inventory in the ordinary course of business on ordinary business terms; (4) the
sale or other  disposition  of cash or Cash  Equivalents;  (5) the sale or other
disposition of obsolete equipment;  (6) the sale of accounts receivable pursuant
to a Qualified  Securitization  Program;  (7) the sale or other  disposition for
consideration  not to exceed $20.0 million of real property  currently  owned by
the Issuer or the Issuer's  Subsidiaries  located in Belleville,  New Jersey and
Linden,  New Jersey;  (8) the sale or other disposition for consideration not to
exceed $25.0 million of the capital  stock or assets of a Foreign  Subsidiary of
the Issuer acquired from a fine chemicals research and development  company; and
(9) a Restricted  Payment or Permitted  Investment  that is permitted by Section
4.07 hereof.

         "ATTRIBUTABLE  DEBT" in  respect  of a sale and  leaseback  transaction
means, at the time of determination,  the present value of the obligation of the
lessee for net rental  payments  during the remaining term of the lease included
in such sale and leaseback transaction including any period for which such lease
has been extended or may, at the option of the lessor, be extended. Such present
value shall be  calculated  using a discount  rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.

         "BANKRUPTCY  LAW" means Title 11, U.S.  Code or any similar  federal or
state law for the relief of debtors.

         "BENEFICIAL  OWNER" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any  particular  "person" (as that term is used in Section 13d-3 of
the Exchange Act), such "person" will be deemed to have beneficial  ownership of
all  securities  that such  "person" has the right to acquire by  conversion  or
exercise of other securities,  whether such right is currently exercisable or is
exercisable  only  upon the  occurrence  of a  subsequent  condition.  The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.

         "BMCA" means Building Materials  Corporation of America and any and all
successors thereto.

         "BOARD OF  DIRECTORS"  means:  (1) with respect to a  corporation,  the
board of directors of the  corporation;  (2) with respect to a partnership,  the
Board of  Directors  of the  general  partner of the  partnership;  and (3) with
respect to any other  Person,  the board or committee  of such Person  serving a
similar function.

         "BROKER-DEALER"  has the meaning set forth in the  Registration  Rights
Agreement.

         "BUSINESS DAY" means any day other than a Legal Holiday.

                                       2
<PAGE>

         "CAPITAL LEASE  OBLIGATION"  means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be  capitalized  on a balance sheet in accordance  with
GAAP.

         "CAPITAL  STOCK"  means:  (1) in the case of a  corporation,  corporate
stock; (2) in the case of an association or business entity, any and all shares,
interests,  participations,  rights or other equivalents (however designated) of
corporate stock; (3) in the case of a partnership or limited liability  company,
partnership or membership  interests  (whether general or limited);  and (4) 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, the issuing
Person.

         "CASH  EQUIVALENTS"  means:  (1) United States dollars;  (2) securities
issued  or  directly  and fully  guaranteed  or  insured  by the  United  States
government  or any agency or  instrumentality  of the United  States  government
(provided  that the full  faith and  credit of the  United  States is pledged in
support of those securities)  having maturities of not more than six months from
the date of  acquisition;  (3)  certificates  of  deposit  and  eurodollar  time
deposits  with  maturities  of six months or less from the date of  acquisition,
bankers' acceptances with maturities not exceeding six months and overnight bank
deposits,  in each case,  with any domestic  commercial  bank having capital and
surplus in excess of $500.0  million and a Thomson  Bank Watch  Rating of "B" or
better;  (4) repurchase  obligations with a term of not more than seven days for
underlying  securities  of the  types  described  in  clauses  (2) and (3) above
entered into with any financial institution meeting the qualifications specified
in  clause  (3)  above;  (5)  commercial  paper  rated as least  P-1 by  Moody's
Investors  Services,  Inc. or at least A-1 by Standard & Poor's Ratings Services
and in each case maturing within six months after the date of  acquisition;  and
(6) money  market  funds at least 95% of the  assets  of which  constitute  Cash
Equivalents  of  the  kinds  described  in  clauses  (1)  through  (5)  of  this
definition.

         "CHANGE OF CONTROL" means the  occurrence of any of the following:  (1)
the direct or indirect sale,  transfer,  conveyance or other disposition  (other
than  by  way of  merger  or  consolidation),  in one  or a  series  of  related
transactions,  of all or  substantially  all of the  properties or assets of the
Issuer and the Issuer's  Subsidiaries  taken as a whole to any "person" (as that
term is used in Section  13d-3 of the Exchange  Act) other than Samuel J. Heyman
or any  Related  Party;  (2) the  adoption of a plan  relating  to the  Issuer's
liquidation or dissolution;  (3) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which is that any
"person"  (as  defined  above),  other than  Samuel J.  Heyman  and his  Related
Parties,  becomes the  Beneficial  Owner of more of the Issuer's  Voting  Stock,
measured by voting power rather than number of shares,  than Mr.  Heyman and his
Related  Parties;  (4) the consummation of any transaction  (including,  without
limitation,  any merger or consolidation) the result of which is that Mr. Heyman
and his  Related  Parties  are the  Beneficial  Owners  of less  than 25% of the
Issuer's  Voting  Stock,  measured by voting power rather than number of shares,
and any  "person"  (as  defined  above),  other than Mr.  Heyman and his Related
Parties,  Beneficially  Owns more than  one-half of the Issuer's  Voting  Stock,
measured by voting power rather than number of shares,  owned by Mr.  Heyman and
his Related Parties; (5) the consummation of any transaction (including, without
limitation,  any merger or consolidation) the result of which is that Mr. Heyman
and his  Related  Parties  are the  Beneficial  Owners  of less  than 10% of the
Issuer's Voting Stock, measured by voting power rather than number of shares; or
(6) the first day on which a majority  of the members of the  Issuer's  Board of
Directors are not Continuing Directors.

         "CLEARSTREAM" means Clearstream Banking, S.A.

         "CLOSING DATE" means December 13, 2001.

         "COLLATERAL"  means any assets of the Issuer  defined as  Collateral in
the Pledge Agreement.

                                       3
<PAGE>

         "CONSOLIDATED  CASH FLOW" means,  with respect to any specified  Person
for any period, the Consolidated Net Income of such Person for such period plus:
(1)  provision  for taxes  based on income or  profits  of such  Person  and its
Restricted  Subsidiaries for such period,  to the extent that such provision for
taxes  was  deducted  in  computing  such  Consolidated  Net  Income;  plus  (2)
consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued and whether or not capitalized  (including,
without  limitation,  amortization  of debt  issuance  costs and original  issue
discount,  non-cash interest  payments,  the interest  component of any deferred
payment  obligations,  the interest  component of all payments  associated  with
Capital Lease  Obligations,  imputed interest with respect to Attributable Debt,
commissions,  discounts and other fees and charges incurred in respect of letter
of  credit  or  bankers'  acceptance  financings,  and net of the  effect of all
payments made or received pursuant to Hedging  Obligations),  to the extent that
any such expense was deducted in computing such  Consolidated  Net Income;  plus
(3)  depreciation,  amortization  (including  amortization of goodwill and other
intangibles  but excluding  amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash items (excluding any such non-cash item to
the extent that it  represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its  Subsidiaries  for such period to the extent that
such  depreciation,  amortization  and other  non-cash  items were  deducted  in
computing such  Consolidated Net Income;  plus (4) provision for  restructuring,
staff  reductions  and  impairment  loss for the year ended December 31, 2000 of
such  Person  and its  Subsidiaries  for such  period  to the  extent  that such
provision  was deducted in computing  such  Consolidated  Net Income;  minus (5)
non-cash items increasing such  Consolidated  Net Income for such period,  other
than the accrual of revenue in the ordinary course of business, in each case, on
a consolidated basis and determined in accordance with GAAP.

         "CONSOLIDATED  NET INCOME" means,  with respect to any specified Person
for  any  period,  the  aggregate  of the Net  Income  of  such  Person  and its
Restricted  Subsidiaries for such period, on a consolidated basis, determined in
accordance  with GAAP;  provided  that: (1) the Net Income (but not loss) of any
Person  that is not a  Restricted  Subsidiary  or that is  accounted  for by the
equity method of accounting will be included only to the extent of the amount of
dividends  or  distributions  paid in cash to the  specified  Person or a Wholly
Owned  Restricted  Subsidiary  of the  Person;  (2) the Net Income of any Person
acquired in a pooling of interests  transaction for any period prior to the date
of such acquisition will be excluded;  and (3) the cumulative effect of a change
in accounting principles will be excluded.

          "CONSOLIDATED  NET WORTH" means,  with respect to any specified Person
as of any  date,  the  sum  of:  (1)  the  consolidated  equity  of  the  common
stockholders of such Person and its  consolidated  Subsidiaries as of such date;
plus (2) the respective  amounts  reported on such Person's  balance sheet as of
such date with respect to any series of preferred stock (other than Disqualified
Stock) that by its terms is not entitled to the payment of dividends unless such
dividends  may be declared  and paid only out of net  earnings in respect of the
year of such  declaration  and  payment,  but  only to the  extent  of any  cash
received by such Person upon issuance of such preferred stock.

         "CONTINUING  DIRECTORS"  means,  as of any date of  determination,  any
member of the Issuer's Board of Directors who: (1) was a member of such Board of
Directors on the Closing  Date;  or (2) was nominated for election or elected to
such  Board of  Directors  with the  approval  of a majority  of the  Continuing
Directors  who were  members  of such  Board at the time of such  nomination  or
election.

         "CORPORATE  TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee  specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Issuer.

         "CREDIT  AGREEMENT"  means that certain Credit  Agreement,  dated as of
June 27, 2001,  as amended by Amendment No. 1 to Credit  Agreement,  dated as of
July  24,  2001,  by  and  among  ISP  Chemco  Inc.,  ISP  Chemicals  Inc.,  ISP
Technologies Inc. and ISP Minerals Inc., as borrowers,  the guarantors signatory

                                       4
<PAGE>

thereto and The Chase Manhattan  Bank, as  administrative  agent,  including any
related notes,  guarantees,  collateral  documents,  instruments  and agreements
executed  in  connection  therewith,  and in  each  case as  amended,  modified,
renewed, refunded, replaced or refinanced from time to time.

         "CUSTODIAN"  means the Trustee,  as custodian with respect to the Notes
in global form, or any successor entity thereto.

         "DEFAULT"  means any event that is, or with the  passage of time or the
giving of notice or both would be, an Event of Default.

         "DEFINITIVE  NOTE" means a certificated  Note registered in the name of
the  Holder  thereof  and  issued  in  accordance   with  Section  2.06  hereof,
substantially  in the form of Exhibit A1 hereto  except that such Note shall not
bear the Global Note Legend and shall not have the  "Schedule  of  Exchanges  of
Interests in the Global Note" attached thereto.

         "DEPOSITARY"  means,  with  respect to the Notes  issuable or issued in
whole or in part in global form, the Person  specified in Section 2.03 hereof as
the Depositary  with respect to the Notes,  and any and all  successors  thereto
appointed  as  depositary  hereunder  and having  become  such  pursuant  to the
applicable provision of this Indenture.

         "DISQUALIFIED  STOCK" means any Capital Stock that, by its terms (or by
the  terms of any  security  into  which it is  convertible,  or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable,  pursuant
to a sinking fund  obligation or  otherwise,  or redeemable at the option of the
holder of the Capital  Stock,  in whole or in part, on or prior to the date that
is 91 days  after  the date on  which  the  notes  mature.  Notwithstanding  the
preceding sentence,  any Capital Stock that would constitute  Disqualified Stock
solely  because the  holders of the Capital  Stock have the right to require the
Issuer to  repurchase  such  Capital  Stock upon the  occurrence  of a change of
control or an asset sale will not constitute  Disqualified Stock if the terms of
such Capital Stock provide that the Issuer may not repurchase or redeem any such
Capital Stock pursuant to such  provisions  unless such repurchase or redemption
complies with Section 4.07 hereof.

          "EQUITY  INTERESTS"  means Capital Stock and all warrants,  options or
other rights to acquire  Capital Stock (but  excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

         "EQUITY OFFERINGS" means (1) issuances and sales of the Issuer's Equity
Interests (other than Disqualified Stock) and (2) contributions of equity to the
Issuer.

         "ESCROW ACCOUNT" means an escrow account into which the Issuer shall be
required to deposit a portion of the proceeds of the Initial  Notes  pursuant to
the Escrow Agreement.

         "ESCROW  AGREEMENT"  means the Pledge and Escrow  Agreement dated as of
the date of this  Indenture,  by and  between  the Issuer and  Wilmington  Trust
Company,  as  escrow  agent,  as such  agreement  may be  amended,  modified  or
supplemented from time to time.

         "EUROCLEAR"  means  Euroclear  Bank  S.A./N.V.,   as  operator  of  the
Euroclear system.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "EXCHANGE  NOTES" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.

                                       5
<PAGE>

         "EXCHANGE OFFER" has the meaning set forth in the  Registration  Rights
Agreement.

         "EXCHANGE  OFFER  REGISTRATION  STATEMENT" has the meaning set forth in
the Registration Rights Agreement.

         "EXISTING  INDEBTEDNESS"  means  Indebtedness  of the  Issuer  and  its
Subsidiaries  (other than Indebtedness  under the Credit Agreement) in existence
on the Closing Date, until such amounts are repaid.

         "FIXED  CHARGES"  means,  with respect to any specified  Person for any
period, the sum, without duplication,  of: (1) the consolidated interest expense
of such Person and its Restricted  Subsidiaries for such period, whether paid or
accrued,  including,  without limitation, to the extent included in consolidated
interest  expense in accordance  with GAAP,  amortization of debt issuance costs
and original issue discount,  non-cash interest payments, the interest component
of any deferred  payment  obligations,  the  interest  component of all payments
associated  with Capital  Lease  Obligations,  imputed  interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers'  acceptance  financings,  and net of the
effect of all payments made or received  pursuant to Hedging  Obligations;  plus
(2) the  consolidated  interest of such Person and its  Restricted  Subsidiaries
that was  capitalized  during  such  period;  plus (3) any  interest  expense on
Indebtedness  of another  Person that is guaranteed by such Person or one of its
Restricted  Subsidiaries or secured by a Lien on assets of such Person or one of
its  Restricted  Subsidiaries,  whether or not such  guarantee or Lien is called
upon;  plus (4) the product of (a) all  dividends,  whether  paid or accrued and
whether or not in cash,  on any series of preferred  stock of such Person or any
of its Restricted Subsidiaries, other than dividends on Equity Interests payable
solely in the Issuer's Equity  Interests (other than  Disqualified  Stock) or to
the Issuer or a Restricted  Subsidiary of the Issuer, times (b) a fraction,  the
numerator  of which is one and the  denominator  of which is one  minus the then
current  combined  federal,  state and local  statutory tax rate of such Person,
expressed as a decimal,  in each case, on a consolidated basis and in accordance
with GAAP.

         "FIXED  CHARGE  COVERAGE  RATIO"  means with  respect to any  specified
Person for any period,  the ratio of the  Consolidated  Cash Flow of such Person
and its  Restricted  Subsidiaries  for such period to the Fixed  Charges of such
Person for such  period.  In the event that the  specified  Person or any of its
Restricted  Subsidiaries incurs,  assumes,  guarantees,  repays,  repurchases or
redeems any  Indebtedness  (other than ordinary  working capital  borrowings) or
issues, repurchases or redeems preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being  calculated and on
or prior to the date on which the event for which the  calculation  of the Fixed
Charge Coverage Ratio is made (the  "Calculation  Date"),  then the Fixed Charge
Coverage  Ratio will be calculated  giving pro forma effect to such  incurrence,
assumption,  guarantee,  repayment, repurchase or redemption of Indebtedness, or
such issuance,  repurchase or redemption of preferred  stock, and the use of the
proceeds  therefrom  as if  the  same  had  occurred  at  the  beginning  of the
applicable four-quarter reference period.

         In addition,  for  purposes of  calculating  the Fixed Charge  Coverage
Ratio:  (1)  acquisitions  that have been made by the specified Person or any of
its Restricted  Subsidiaries,  including through mergers or  consolidations  and
including any related financing transactions,  during the four-quarter reference
period or subsequent to such reference period and on or prior to the Calculation
Date will be given pro forma  effect as if they had occurred on the first day of
the four-quarter  reference period and Consolidated Cash Flow for such reference
period will be calculated on a pro forma basis in accordance with Regulation S-X
under the Securities Act, but without giving effect to clause (3) of the proviso
set forth in the definition of  Consolidated  Net Income;  (2) the  Consolidated
Cash Flow attributable to discontinued  operations,  as determined in accordance
with GAAP,  and  operations or businesses  disposed of prior to the  Calculation
Date, will be excluded;  and (3) the Fixed Charges  attributable to discontinued

                                       6
<PAGE>

operations,  as determined in accordance with GAAP, and operations or businesses
disposed of prior to the  Calculation  Date,  will be excluded,  but only to the
extent  that the  obligations  giving  rise to such  Fixed  Charges  will not be
obligations  of the  specified  Person  or any  of its  Restricted  Subsidiaries
following the Calculation Date.

         "FOREIGN  SUBSIDIARY"  means any  Subsidiary of the Issuer formed under
the laws of any  jurisdiction  other  than the  United  States or any  political
subdivision  thereof  and  substantially  all of the assets of which are located
outside of the United States or that conducts  substantially all of its business
outside of the United States.

         "GAAP" means generally accepted accounting  principles 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 have been  approved by a significant  segment of the  accounting
profession, which are in effect from time to time.

         "GLOBAL  NOTES"  means,  individually  and  collectively,  each  of the
Restricted Global Notes and the Unrestricted Global Notes,  substantially in the
form of Exhibit A1 hereto issued in accordance  with Section 2.01,  2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.

         "GLOBAL NOTE LEGEND" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.

         "HEDGING  OBLIGATIONS" means, with respect to any specified Person, the
obligations of such Person under:  (1) interest rate swap  agreements,  interest
rate  cap  agreements  and  interest  rate  collar  agreements;  and  (2)  other
agreements or arrangements  designed to protect such Person against fluctuations
in interest rates.

         "HOLDER" means a Person in whose name a Note is registered.

         "IAI  GLOBAL  NOTE" means a global  note  substantially  in the form of
Exhibit A1 hereto  bearing  the Global  Note  Legend and the  Private  Placement
Legend  and  deposited  with or on behalf of and  registered  in the name of the
Depositary  or its nominee  that will be issued in a  denomination  equal to the
outstanding  principal  amount of the  Notes  sold to  Institutional  Accredited
Investors.

         "INDEBTEDNESS"  means,  with  respect  to  any  specified  Person,  any
indebtedness  of such  Person,  whether  or not  contingent:  (1) in  respect of
borrowed  money;  (2)  evidenced  by  bonds  (excluding  appeal  bonds),  notes,
debentures  or  similar  instruments  or  letters  of credit  (or  reimbursement
agreements  in respect  thereof);  (3) in respect of banker's  acceptances;  (4)
representing  Capital Lease  Obligations;  (5) representing the balance deferred
and unpaid of the purchase  price of any property,  except any such balance that
constitutes an accrued expense or trade payable; or (6) representing any Hedging
Obligations, if and to the extent any of the preceding items (other than letters
of credit)  would appear as a liability  upon a balance  sheet of the  specified
Person  prepared in accordance with GAAP. In addition,  the term  "Indebtedness"
includes  all  Indebtedness  of  others  secured  by a Lien on any  asset of the
specified  Person (whether or not such  Indebtedness is assumed by the specified
Person)  and,  to the  extent  not  otherwise  included,  the  guarantee  by the
specified  Person of any  indebtedness  of any other  Person.  The amount of any
Indebtedness  outstanding  as of any date will be: (1) the accreted value of the
Indebtedness,  in the  case  of any  Indebtedness  issued  with  original  issue
discount;  and (2) the principal amount of the  Indebtedness,  together with any
interest on the Indebtedness  that is more than 30 days past due, in the case of
any other Indebtedness.

                                       7
<PAGE>

         "INDENTURE" means this Indenture,  as amended or supplemented from time
to time.

         "INDIRECT  PARTICIPANT" means a Person who holds a beneficial  interest
in a Global Note through a Participant.

         "INITIAL NOTES" means the first $200,000,000 aggregate principal amount
of Notes issued under this Indenture on the date hereof.

         "INSTITUTIONAL  ACCREDITED  INVESTOR"  means an institution  that is an
"accredited  investor" as defined in Rule  501(a)(1),  (2), (3) or (7) under the
Securities Act, who are not also QIBs.

         "INTEREST PAYMENT DATE" shall have the meaning set forth on the face of
the Notes.

         "INVESTMENTS" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including  Affiliates) in the forms
of loans  (including  guarantees  or other  obligations),  advances  or  capital
contributions (excluding commission, travel and similar advances to officers and
employees  made  in  the  ordinary  course  of  business),  purchases  or  other
acquisitions  for  consideration  of  Indebtedness,  Equity  Interests  or other
securities,  together  with  all  items  that  are or  would  be  classified  as
investments on a balance sheet  prepared in accordance  with GAAP. If the Issuer
or any of the Issuer's  Subsidiaries  sells or otherwise  disposes of any Equity
Interests  of any of the  Issuer's  direct or indirect  Subsidiaries  such that,
after giving effect to any such sale or disposition,  such Person is no longer a
Subsidiary  of the Issuer,  the Issuer will be deemed to have made an Investment
on the date of any such sale or  disposition  equal to the fair market  value of
the Equity  Interests  of such  Subsidiary  not sold or disposed of in an amount
determined  as provided  in the final  paragraph  of Section  4.07  hereof.  The
acquisition by the Issuer or any of the Issuer's  Subsidiaries  of a Person that
holds an  Investment in a third Person will be deemed to be an Investment by the
Issuer or such  Subsidiary  in such third  Person in an amount equal to the fair
market value of the Investment  held by the acquired Person in such third Person
in an amount  determined  as provided  in the final  paragraph  of Section  4.07
hereof.

         "ISP"  means  International  Specialty  Products  Inc.  and any and all
successors thereto.

         "ISP CHEMCO" means ISP Chemco Inc. and any and all successors thereto.

         "ISP  INVESTCO"  means  ISP  Investco  LLC and  any and all  successors
thereto.

         "ISSUER" means  International  Specialty  Holdings Inc. and any and all
successors thereto.

         "LEGAL  HOLIDAY"  means a Saturday,  a Sunday or a day on which banking
institutions  in the City of New York or  Wilmington,  Delaware or at a place of
payment are authorized by law,  regulation or executive  order to remain closed.
If a payment date is a Legal Holiday at a place of payment,  payment may be made
at that place on the next  succeeding  day that is not a Legal  Holiday,  and no
interest shall accrue on such payment for the intervening period.

         "LETTER OF TRANSMITTAL"  means the letter of transmittal to be prepared
by the  Issuer and sent to all  Holders of the Notes for use by such  Holders in
connection with the Exchange Offer.

         "LIEN" means,  with respect to any asset, any mortgage,  lien,  pledge,
charge,  security  interest or encumbrance of any kind in respect of such asset,
whether or not filed,  recorded or otherwise  perfected  under  applicable  law,
including any conditional sale or other title retention agreement,  any lease in
the nature  thereof,  any option or other  agreement  to sell or give a security

                                       8
<PAGE>

interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

         "LIQUIDATED  DAMAGES" means all liquidated  damages then owing pursuant
to Section 5 of the Registration Rights Agreement.

         "MANAGEMENT  AGREEMENT"  means  the  Amended  and  Restated  Management
Agreement,  dated as of January 1, 1999, among GAF Corporation,  G-1 Holdings, G
Industries  Corp.,  Merick Inc., GAF Fiberglass  Corporation,  ISP, GAF Building
Materials  Corporation,  GAF Broadcasting Company, Inc., BMCA and ISP Management
Company, Inc., as assignee of ISP Chemco Inc. (f/k/a ISP Opco Holdings Inc.).

         "NET INCOME"  means,  with  respect to any  specified  Person,  the net
income (loss) of such Person,  determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends,  excluding,  however: (1) any
gain or loss,  together  with any  related  provision  for taxes on such gain or
loss, realized in connection with: (a) any Asset Sale; or (b) the disposition of
any  securities  by such  Person or any of its  Restricted  Subsidiaries  or the
extinguishment  of any  Indebtedness  of such  Person  or any of its  Restricted
Subsidiaries;  (2) any  extraordinary  gain or loss,  together  with any related
provision for taxes on such  extraordinary  gain or loss; (3) any  non-recurring
gain  or  loss,   together  with  any  related   provision  for  taxes  on  such
non-recurring gain or loss, relating to the Restructuring;  and (4) any one-time
effect  of the  adoption  of the  Proposed  Statement  of  Financial  Accounting
Standards  of  the  Financial   Accounting  Standards  Board  entitled  BUSINESS
COMBINATIONS AND INTANGIBLE ASSETS -- ACCOUNTING FOR GOODWILL.

         "NET PROCEEDS" means the aggregate cash proceeds received by the Issuer
or any of its Restricted  Subsidiaries in respect of any Asset Sale  (including,
without limitation,  any cash received upon the sale or other disposition of any
non-cash  consideration  received in any Asset  Sale),  net of the direct  costs
relating to such Asset Sale, including,  without limitation,  legal,  accounting
and investment banking fees, and sales commissions,  and any relocation expenses
incurred as a result of the Asset Sale, taxes paid or payable as a result of the
Asset Sale, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements,  and amounts required to be applied
to the repayment of  Indebtedness  secured by a Lien on the asset or assets that
were the subject of such Asset Sale and any reserve for adjustment in respect of
the sale price of such asset or assets established in accordance with GAAP.

         "NET TANGIBLE ASSETS" means,  with respect to any Person as of any date
of determination, (a) the amount of property, plant and equipment of such Person
and its Restricted  Subsidiaries,  plus (b) the amount of current assets of such
Person  and its  Restricted  Subsidiaries,  minus  (c)  the  amount  of  current
liabilities of such Person and its Restricted Subsidiaries,  in each case as set
forth on such Person's  consolidated  balance sheet prepared in accordance  with
GAAP as of such date of determination.

         "NON-RECOURSE  DEBT" means  Indebtedness:  (1) as to which  neither the
Issuer nor any of the  Issuer's  Restricted  Subsidiaries  (a)  provides  credit
support of any kind  (including any  undertaking,  agreement or instrument  that
would  constitute  Indebtedness),  (b) is  directly  or  indirectly  liable as a
guarantor or otherwise,  or (c) constitutes the lender;  and (2) no default with
respect to which  (including any rights that the holders of the Indebtedness may
have to take enforcement action against an Unrestricted Subsidiary) would permit
upon notice,  lapse of time or both any holder of any other Indebtedness  (other
than the notes) of the Issuer or any of the Issuer's Restricted  Subsidiaries to
declare  a default  on such  other  Indebtedness  or cause  the  payment  of the
Indebtedness to be accelerated or payable prior to its stated maturity.

         "NON-U.S. PERSON" means a Person who is not a U.S. Person.

                                       9
<PAGE>

         "NOTES" means the Initial Notes and the Additional  Notes,  which shall
be treated as a single class for all purposes under this Indenture.

         "OBLIGATIONS"   means  any  principal,   interest,   penalties,   fees,
indemnifications,  reimbursements,  damages and other liabilities  payable under
the documentation governing any Indebtedness.

         "OFFERING" means the offering of the Notes by the Issuer.

         "OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer,  the President,  the Chief Operating  Officer,  the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.

         "OFFICERS'  CERTIFICATE"  means a  certificate  signed on behalf of the
Issuer  by two  Officers  of the  Issuer,  one of  whom  must  be the  principal
executive  officer,  the  principal  financial  officer,  the  treasurer  or the
principal  accounting  officer of the  Issuer,  that meets the  requirements  of
Section 13.05 hereof.

         "OPINION  OF  COUNSEL"  means an  opinion  from  legal  counsel  who is
reasonably  acceptable to the Trustee,  that meets the  requirements  of Section
13.05  hereof.  The counsel may be an employee of or counsel to the Issuer,  any
Subsidiary of the Issuer or the Trustee.

         "PARTICIPANT"  means,  with  respect to the  Depositary,  Euroclear  or
Clearstream,  a Person  who has an account  with the  Depositary,  Euroclear  or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).

         "PERMITTED  BUSINESS"  means any  business  in which the Issuer and its
Restricted  Subsidiaries  were  engaged on the Closing  Date,  and any  business
reasonably related or complementary thereto,  including without limitation,  the
Issuer's activities as a holding company.

         "PERMITTED  INVESTMENTS"  means: (1) any Investment in the Issuer or in
any of its Restricted Subsidiaries;  (2) any Investment in Cash Equivalents; (3)
any Investment existing on the Closing Date; (4) any Investment by the Issuer or
any of its Subsidiaries in a Person, if as a result of such Investment: (a) such
Person  becomes a  Restricted  Subsidiary  of the Issuer;  or (b) such Person is
merged,  consolidated  or  amalgamated  with or into,  or  transfers  or conveys
substantially  all of its  assets  to, or is  liquidated  into,  the Issuer or a
Restricted  Subsidiary of the Issuer; (5) any Investment made as a result of the
receipt of non-cash  consideration  from an Asset Sale that was made pursuant to
and in  compliance  with Section 4.10 hereof,  other than  securities,  notes or
other  obligations  that are deemed to be cash  pursuant to clause (3)(b) of the
first paragraph of Section 4.10 hereof unless actually  converted into cash; (6)
any  acquisition  of assets  solely in exchange for the issuance of the Issuer's
Equity Interests (other than Disqualified  Stock); (7) any Investments  received
in compromise of obligations of such persons  incurred in the ordinary course of
trade  creditors  or  customers  that were  incurred in the  ordinary  course of
business,   including   pursuant  to  any  plan  of  reorganization  or  similar
arrangement upon the bankruptcy or insolvency of any trade creditor or customer;
(8) Hedging Obligations;  and (9) other Investments in any Person (other than an
Affiliate of the Issuer that is not also a Subsidiary  of the Issuer)  having an
aggregate fair market value  (measured on the date each such Investment was made
and without giving effect to subsequent  changes in value),  when taken together
with all other  Investments  made  pursuant to this clause (9) since the Closing
Date,  not to  exceed  the  greater  of (a)  $35.0  million  and (b) 5.0% of the
Issuer's  Net  Tangible  Assets as of the date on which any such  Investment  is
made.  For the  avoidance of doubt,  a loan to a Person that is not a Restricted
Subsidiary of the Issuer shall not, except to the extent permitted by clause (9)
above, be a Permitted Investment.

                                       10
<PAGE>

         "PERMITTED  LIENS" means:  (1) Liens on the Issuer's  assets created by
this  Indenture and the Pledge  Agreement  securing the Notes and any Additional
Notes issued in accordance with the terms of this Indenture;  (2) Liens in favor
of the  Issuer;  (3) Liens on  property  of a Person  existing  at the time such
Person is merged with or into or  consolidated  with the Issuer;  provided  that
such  Liens  were in  existence  prior to the  contemplation  of such  merger or
consolidation  and do not  extend to any  assets  other than those of the Person
merged into or consolidated  with the Issuer;  (4) Liens on property existing at
the time of acquisition of the property by the Issuer;  provided that such Liens
were in existence prior to the contemplation of such  acquisition;  (5) Liens to
secure  the  performance  of  statutory  obligations,  surety or  appeal  bonds,
performance bonds or other obligations of a like nature incurred in the ordinary
course of business;  (6) Liens to secure Indebtedness permitted by clause (4) of
the second  paragraph of Section 4.09 hereof  covering only the assets  acquired
with such  Indebtedness;  (7) Liens  existing on the Closing Date; (8) Liens for
taxes, assessments or governmental charges or claims that are not yet delinquent
or that are being  contested in good faith by appropriate  proceedings  promptly
instituted  and  diligently  concluded;  provided  that  any  reserve  or  other
appropriate  provision  as is  required  in  conformity  with GAAP has been made
therefor;  (9) Liens on the Issuer's assets to secure Indebtedness  permitted by
clause (5) of the second  paragraph  of Section  4.09  hereof to the extent (and
only to the extent) that the Indebtedness  being refinanced  thereby was secured
by Liens on such  assets;  (10)  Liens on cash and Cash  Equivalents  posted  as
margin pursuant to the requirements of any bona fide hedge agreement relating to
interest rates, foreign exchange or commodities listed on public exchanges,  but
only to the extent such Liens are required from customers generally  (regardless
of  creditworthiness)  in accordance with customary  market  practice;  and (11)
Liens with respect to  obligations  that do not exceed $50.0  million at any one
time outstanding.

         "PERMITTED   REFINANCING   INDEBTEDNESS"  means  any  of  the  Issuer's
Indebtedness  or Indebtedness  of any of its Restricted  Subsidiaries  issued in
exchange for, or the net proceeds of which are used to extend, refinance, renew,
replace,  defease  or  refund  other  Indebtedness  of the  Issuer or any of its
Restricted Subsidiaries (other than intercompany  Indebtedness);  provided that:
(1) the principal  amount (or accreted  value,  if applicable) of such Permitted
Refinancing  Indebtedness  does not exceed  the  principal  amount (or  accreted
value,  if  applicable)  of  the  Indebtedness  extended,  refinanced,  renewed,
replaced,  defeased or refunded (plus all accrued  interest on the  Indebtedness
and the amount of all expenses and premiums  incurred in connection  therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later than
the final maturity date of, and has a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended,  refinanced,  renewed,  replaced,  defeased  or  refunded;  (3) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is  subordinated  in right of payment to the notes,  such Permitted  Refinancing
Indebtedness  has a final  maturity date later than the final  maturity date of,
and is  subordinated  in right of  payment  to,  the  notes on terms at least as
favorable  to the  Holders  of  notes as those  contained  in the  documentation
governing  the  Indebtedness  being  extended,  refinanced,  renewed,  replaced,
defeased or refunded; and (4) such Indebtedness is incurred either by the Issuer
or by the  Subsidiary  who is the obligor on the  Indebtedness  being  extended,
refinanced, renewed, replaced, defeased or refunded.

         "PERSON" means any individual, corporation, partnership, joint venture,
association,  joint-stock company, trust, unincorporated  organization,  limited
liability company or government or other entity.

         "PLEDGE  AGREEMENT"  means the Pledge Agreement dated as of the date of
this Indenture and  substantially  in the form attached as Exhibit E hereto,  as
such agreement may be amended, modified or supplemented from time to time.

          "PRIVATE  PLACEMENT  LEGEND"  means the  legend  set forth in  Section
2.06(g)(i)  to be placed on all Notes issued under this  Indenture  except where
otherwise permitted by the provisions of this Indenture.

         "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

                                       11
<PAGE>

         "QUALIFIED  SECURITIZATION PROGRAM" means any financing transaction (a)
provided by one or more  persons,  none of which is an  Affiliate of the Issuer,
(b) in favor of an accounts receivable financing subsidiary,  (c) secured by the
grant by the accounts receivable  financing subsidiary of a security interest in
(or a sale  of)  only  accounts  receivable  originated  by the  Issuer  and its
Restricted Subsidiaries in connection with the sale or lease of inventory or the
rendering  of  services in the  ordinary  course of  business  and the  proceeds
thereof and (d) for which no recourse to the Issuer, its Restricted Subsidiaries
or the accounts receivable  financing subsidiary may be made other than (i) with
respect to the Issuer or any of its Restricted  Subsidiaries  that sell accounts
receivable to the accounts  receivable  financing  subsidiary in connection with
the  transaction,   and  the  accounts  receivable  financing  subsidiary,   (A)
repurchases of accounts  receivable  that do not qualify for financing under the
terms of the  transaction,  (B) the amount of any  dilutions  in respect of such
accounts receivable and (C) customary indemnities for financing  transactions of
such type and (ii)  solely with  respect to the  accounts  receivable  financing
subsidiary,  such  accounts  receivable  and  the  proceeds  thereof;  provided,
however,  that,  in any  case,  no  recourse  to the  Issuer  or its  Restricted
Subsidiaries or the accounts receivable  financing subsidiary shall be permitted
to be made for any  credit-related  default or loss with  respect to any account
receivable.

          "REGISTRATION   RIGHTS   AGREEMENT"  means  the  Registration   Rights
Agreement,  dated as of December 13, 2001, by and among the Issuer and the other
parties named on the signature pages thereof,  as such agreement may be amended,
modified or  supplemented  from time to time and, with respect to any Additional
Notes, one or more  registration  rights  agreements  between the Issuer and the
other  parties  thereto,  as  such  agreement(s)  may be  amended,  modified  or
supplemented  from time to time,  relating to rights  given by the Issuer to the
purchasers  of  Additional  Notes to register  such  Additional  Notes under the
Securities Act.

         "REGULATION S" means Regulation S promulgated under the Securities Act.

         "REGULATION  S GLOBAL NOTE" means a Regulation S Temporary  Global Note
or Regulation S Permanent Global Note, as appropriate.

         "REGULATION S PERMANENT  GLOBAL NOTE" means a permanent  global Note in
the form of Exhibit A1 hereto  bearing  the Global  Note  Legend and the Private
Placement  Legend and deposited  with or on behalf of and registered in the name
of  the  Depositary  or its  nominee,  issued  in a  denomination  equal  to the
outstanding  principal  amount of the  Regulation  S Temporary  Global Note upon
expiration of the Restricted Period.

         "REGULATION S TEMPORARY  GLOBAL NOTE" means a temporary  global Note in
the form of Exhibit A2 hereto  deposited  with or on behalf of and registered in
the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule 903
of Regulation S.

         "RELATED  PARTY"  means,  with  respect  to Samuel J.  Heyman:  (1) any
immediate  family  member  of  Mr.  Heyman;  or  (2)  any  trust,   corporation,
partnership or other entity, the beneficiaries,  stockholders,  partners, owners
or Persons  beneficially  holding an 80% or more  controlling  interest of which
consist of Mr. Heyman and immediate family members of Mr. Heyman.

         "RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
officer within the Corporate  Trust  Department of the Trustee (or any successor
group of the Trustee) 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  to whom  such  matter  is  referred  because  of his  knowledge  of and
familiarity with the particular subject.

                                       12
<PAGE>

         "RESTRICTED  DEFINITIVE  NOTE"  means a  Definitive  Note  bearing  the
Private Placement Legend.

         "RESTRICTED  GLOBAL  NOTE"  means a Global  Note  bearing  the  Private
Placement Legend.

         "RESTRICTED  INVESTMENT"  means an  Investment  other than a  Permitted
Investment.

         "RESTRICTED PERIOD" means the 40-day distribution  compliance period as
defined in Regulation S.

         "RESTRICTED  SUBSIDIARY"  of a  Person  means  any  Subsidiary  of  the
referent Person that is not an Unrestricted Subsidiary.

         "RESTRUCTURING"  means the internal  restructuring of ISP, completed in
June 2001, that separated ISP's investment  assets from its specialty  chemicals
business.

         "RULE 144" means Rule 144 promulgated under the Securities Act.

         "RULE 144A" means Rule 144A promulgated under the Securities Act.

         "RULE 903" means Rule 903 promulgated under the Securities Act.

         "RULE 904" means Rule 904 promulgated the Securities Act.

         "SEC" means the Securities and Exchange Commission.

         "SECURED PARTY" shall have the meaning given to such term in the Pledge
Agreement.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SHELF REGISTRATION  STATEMENT" means the Shelf Registration  Statement
as defined in the Registration Rights Agreement.

         "SIGNIFICANT  SUBSIDIARY" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated  pursuant to the Securities  Act, as such Regulation is in effect on
the date of this Indenture.

         "STATED MATURITY" means, with respect to any installment of interest or
principal  on any  series  of  Indebtedness,  the date on which the  payment  of
interest or principal  was  scheduled  to be paid in the original  documentation
governing such Indebtedness,  and will not include any contingent obligations to
repay,  redeem or repurchase  any such  interest or principal  prior to the date
originally scheduled for the payment thereof.

         "SUBSIDIARY"  means,  with  respect to any  specified  Person:  (1) any
corporation,  association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock  entitled  (without  regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees of the corporation, association or other business entity is at the time
owned or controlled,  directly or  indirectly,  by that Person or one or more of
the other  Subsidiaries of that Person (or a combination  thereof);  and (2) any
partnership  (a) the sole  general  partner or the managing  general  partner of
which is such  Person or a  Subsidiary  of such  Person or (b) the only  general
partners of which are that Person or one or more Subsidiaries of that Person (or
any combination thereof).

                                       13
<PAGE>

         "TAX SHARING  AGREEMENTS"  means the Tax Sharing  Agreement  made as of
January 1, 2001 by and among the  Issuer,  ISP and ISP Chemco  Inc.  and the Tax
Sharing Agreement made as of January 1, 2001 by and between the Issuer and ISP.

         "THRESHOLD AMOUNT" means, with respect to any fiscal year of the Issuer
commencing  with the fiscal year in which the Notes are  issued,  the sum of (A)
$15.0 million plus (B) with respect to each fiscal year commencing with the year
ending December 31, 2002, any Threshold Amount  attributable to any prior fiscal
year that has not been applied to reduce the amount of Asset Sale  Proceeds that
constitute Excess Proceeds pursuant to Section 4.10; provided,  however, that at
such time as the Threshold Amount has been applied to reduce the amount of Asset
Sale Proceeds that constitute  Excess  Proceeds by $75.0 million,  the Threshold
Amount shall thereafter be zero.

         "TIA"  means  the  Trust  Indenture  Act  of  1939  (15  U.S.C. ss. ss.
77aaa-77bbbb)  as in effect on the date ON which  this  Indenture  is  qualified
under the TIA.

         "TRUSTEE"  means  the  party  named  as such  above  until a  successor
replaces it in accordance  with the applicable  provisions of this Indenture and
thereafter means the successor serving hereunder.

         "UNRESTRICTED  GLOBAL NOTE" means a permanent global Note substantially
in the form of Exhibit A1 attached  hereto that bears the Global Note Legend and
that has the  "Schedule of  Exchanges of Interests in the Global Note"  attached
thereto,  and that is deposited  with or on behalf of and registered in the name
of the  Depositary,  representing a series of Notes that do not bear the Private
Placement Legend.

         "UNRESTRICTED  DEFINITIVE NOTE" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.

         "UNRESTRICTED   SUBSIDIARY"   means  (A)  ISP   Investco  LLC  and  its
Subsidiaries;  (B) all of the Issuer's Subsidiaries that have been designated as
of the Closing Date as "unrestricted subsidiaries" under the 2011 Note Indenture
and (C) any other  Subsidiary  of the Issuer that is  designated by the Issuer's
Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution,
but only to the extent that such Subsidiary:  (1) has no Indebtedness other than
Non-Recourse Debt; (2) is not party to any agreement,  contract,  arrangement or
understanding with the Issuer or any Restricted  Subsidiary of the Issuer unless
the terms of any such agreement,  contract,  arrangement or understanding are no
less favorable to the Issuer or such Restricted Subsidiary than those that might
be obtained at the time from Persons who are not  Affiliates of the Issuer;  (3)
is a Person with respect to which  neither the Issuer nor any of its  Restricted
Subsidiaries  has  any  direct  or  indirect  obligation  (a) to  subscribe  for
additional  Equity  Interests  or (b) to  maintain  or  preserve  such  Person's
financial  condition or to cause such Person to achieve any specified  levels of
operating  results;  (4) has not guaranteed or otherwise  directly or indirectly
provided  credit  support  for  any  Indebtedness  of the  Issuer  or any of its
Restricted  Subsidiaries;  and (5) has at least  one  director  on its  Board of
Directors  that  is not a  director  of the  Issuer's  or any of its  Restricted
Subsidiaries.

         Any  designation  of a  Subsidiary  of the  Issuer  as an  Unrestricted
Subsidiary  will be  evidenced  to the  Trustee  by  filing  with the  Trustee a
certified copy of the Board Resolution  giving effect to such designation and an
Officers'  Certificate  certifying  that  such  designation  complied  with  the
preceding  conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted  Subsidiary would fail to meet the preceding requirements as an
Unrestricted  Subsidiary,  it  will  thereafter  cease  to  be  an  Unrestricted
Subsidiary  for  purposes  of  this  Indenture  and  any  Indebtedness  of  such
Subsidiary  will be deemed to be  incurred  by a  Restricted  Subsidiary  of the
Issuer as of such date and, if such Indebtedness is not permitted to be incurred
as of such date under Section 4.09 hereof, the Issuer will be in default of such
covenant.  The  Issuer's  Board  of  Directors  may at any  time  designate  any
Unrestricted Subsidiary  to be a

                                       14
<PAGE>

Restricted  Subsidiary;  provided that such  designation will be deemed to be an
incurrence  of  Indebtedness  by a  Restricted  Subsidiary  of the Issuer of any
outstanding  Indebtedness of such  Unrestricted  Subsidiary and such designation
will only be permitted if (1) such  Indebtedness is permitted under Section 4.09
hereof,  calculated on a pro forma basis as if such  designation had occurred at
the beginning of the four-quarter  reference period; and (2) no Default or Event
of Default would be in existence following such designation.

         "U.S.  PERSON" means a U.S.  Person as defined in Rule 902(o) under the
Securities Act.

         "VOTING  STOCK" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

         "WEIGHTED  AVERAGE  LIFE  TO  MATURITY"  means,  when  applied  to  any
Indebtedness at any date, the number of years obtained by dividing:  (1) the sum
of the products  obtained by  multiplying  (a) the amount of each then remaining
installment,  sinking  fund,  serial  maturity  or other  required  payments  of
principal,  including payment at final maturity, in respect of the Indebtedness,
by (b) the number of years  (calculated  to the nearest  one-twelfth)  that will
elapse  between  such  date  and the  making  of such  payment;  by (2) the then
outstanding principal amount of such Indebtedness.

         "WHOLLY OWNED  RESTRICTED  SUBSIDIARY "of any specified  Person means a
Restricted  Subsidiary  of such Person all of the  outstanding  Capital Stock or
other  ownership  interests of which (other than directors'  qualifying  shares)
will at the  time  be  owned  by such  Person  or by one or  more  Wholly  Owned
Restricted  Subsidiaries of such Person and one or more Wholly Owned  Restricted
Subsidiaries of such Person.

SECTION 1.02.  OTHER DEFINITIONS.

                                                                     Defined in
        Term                                                           Section
        ----                                                           -------
        "AFFILIATE TRANSACTION"..................................       4.11
        "ASSET SALE OFFER".......................................       3.09
        "AUTHENTICATION ORDER"...................................       2.02
        "CHANGE OF CONTROL OFFER"................................       4.15
        "CHANGE OF CONTROL PAYMENT"..............................       4.15
        "CHANGE OF CONTROL PAYMENT DATE".........................       4.15
        "COVENANT DEFEASANCE"....................................       8.03
        "DTC"....................................................       2.03
        "EVENT OF DEFAULT".......................................       6.01
        "EXCESS PROCEEDS"........................................       4.10
        "INCUR"..................................................       4.09
        "LEGAL DEFEASANCE".......................................       8.02
        "OFFER AMOUNT"...........................................       3.09
        "OFFER PERIOD"...........................................       3.09
        "PAYING AGENT"...........................................       2.03
        "PAYMENT DEFAULT.........................................       6.01
        "PERMITTED DEBT".........................................       4.09
        "PURCHASE DATE"..........................................       3.09
        "REGISTRAR"..............................................       2.03
        "RESTRICTED PAYMENTS"....................................       4.07

                                       15
<PAGE>

SECTION 1.03  INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

         Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.

         The  following  TIA terms  used in this  Indenture  have the  following
meanings:

         "INDENTURE SECURITIES" means the Notes;

         "INDENTURE SECURITY HOLDER" means a Holder of a Note;

         "INDENTURE TO BE QUALIFIED" means this Indenture;

         "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and

         "OBLIGOR" on the Notes means the Issuer and any successor  obligor upon
the Notes.

         All other  terms used in this  Indenture  that are  defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.

SECTION 1.04.  RULES OF CONSTRUCTION.

         Unless the context otherwise requires:

         (a) a term has the meaning assigned to it;

         (b) an accounting term not otherwise  defined has the meaning  assigned
to it in accordance with GAAP;

         (c) "or" is not exclusive;

         (d) words in the singular include the plural, and in the plural include
the singular;

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

         (f)  references to sections of or rules under the  Securities Act shall
be deemed to include  substitute,  replacement  of  successor  sections or rules
adopted by the SEC from time to time.

                                   ARTICLE 2.
                                   THE NOTES

SECTION 2.01.  FORM AND DATING.

         (a) GENERAL. The Notes and the Trustee's  certificate of authentication
shall be substantially in the form of Exhibits A-1 or A-2 hereto.  The Notes may
have notations,  legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication.  The Notes shall
be in denominations of $1,000 and integral multiples thereof.

         The terms and provisions  contained in the Notes shall constitute,  and
are  hereby  expressly  made,  a part of this  Indenture  and the Issuer and the
Trustee,  by their execution and delivery of this Indenture,  expressly agree to
such terms and provisions and to be bound  thereby.  However,  to the extent any

                                       16
<PAGE>

provision of any Note conflicts with the express  provisions of this  Indenture,
the provisions of this Indenture shall govern and be controlling.

         (b) GLOBAL NOTES. Notes issued in global form shall be substantially in
the form of Exhibits A1 or A2 attached hereto  (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto).  Notes issued in definitive form shall be substantially in the form of
Exhibit A1  attached  hereto (but  without  the Global  Note Legend  thereon and
without the  "Schedule of  Exchanges  of Interests in the Global Note"  attached
thereto).  Each Global Note shall  represent  such of the  outstanding  Notes as
shall be specified  therein and each shall  provide that it shall  represent the
aggregate  principal  amount of  outstanding  Notes  from time to time  endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby  may from time to time be  reduced  or  increased,  as  appropriate,  to
reflect  exchanges and redemptions.  Any endorsement of a Global Note to reflect
the amount of any  increase  or decrease in the  aggregate  principal  amount of
outstanding  Notes  represented  thereby  shall  be made by the  Trustee  or the
Custodian,  at the  direction of the Trustee,  in accordance  with  instructions
given by the Holder thereof as required by Section 2.06 hereof.

         (c)  TEMPORARY  GLOBAL  NOTES.  Notes  offered  and sold in reliance on
Regulation S shall be issued initially in the form of the Regulation S Temporary
Global Note,  which shall be deposited on behalf of the  purchasers of the Notes
represented  thereby  with the  Trustee as  custodian  for the  Depositary,  and
registered in the name of the  Depositary or the nominee of the  Depositary  for
the accounts of designated agents holding on behalf of Euroclear or Clearstream,
duly  executed by the Issuer and  authenticated  by the  Trustee as  hereinafter
provided.  The  Restricted  Period shall be  terminated  upon the receipt by the
Trustee of (i) a written  certificate from the Depositary,  together with copies
of  certificates  from  Euroclear  and  Clearstream  certifying  that  they have
received  certification of non-United States beneficial ownership of 100% of the
aggregate  principal amount of the Regulation S Temporary Global Note (except to
the extent of any  beneficial  owners  thereof who acquired an interest  therein
during the Restricted  Period  pursuant to another  exemption from  registration
under the  Securities  Act and who will take delivery of a beneficial  ownership
interest in a 144A Global Note or an IAI Global Note bearing a Private Placement
Legend,  all as contemplated by Section  2.06(b)(hereof),  and (ii) an Officers'
Certificate from the Issuer. Following the termination of the Restricted Period,
beneficial  interests  in the  Regulation  S  Temporary  Global  Note  shall  be
exchanged  for  beneficial  interests  in  Regulation  S Permanent  Global Notes
pursuant to the Applicable Procedures. Simultaneously with the authentication of
Regulation S Permanent  Global Notes,  the Trustee shall cancel the Regulation S
Temporary  Global  Note.  The  aggregate  principal  amount of the  Regulation S
Temporary  Global Note and the Regulation S Permanent Global Notes may from time
to time be  increased or  decreased  by  adjustments  made on the records of the
Trustee and the  Depositary  or its nominee,  as the case may be, in  connection
with transfers of interest as hereinafter provided.

         (d) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE.  The provisions of
the  "Operating  Procedures of the Euroclear  System" and "Terms and  Conditions
Governing  Use  of  Euroclear"   and  the  "General   Terms  and  Conditions  of
Clearstream"  and  "Customer  Handbook" of  Clearstream  shall be  applicable to
transfers of beneficial  interests in the Regulation S Temporary Global Note and
the Regulation S Permanent  Global Notes that are held by  Participants  through
Euroclear or Clearstream.

SECTION 2.02.  EXECUTION AND AUTHENTICATION.

         One Officer of the Issuer shall sign the Notes for the Issuer by manual
or facsimile signature.

         If an Officer whose  signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.

                                       17
<PAGE>

         A Note shall not be valid until  authenticated  by the manual signature
of the Trustee.  The signature  shall be  conclusive  evidence that the Note has
been authenticated under this Indenture.

         The Trustee  shall,  upon a written  order of the Issuer  signed by one
Officer  of the  Issuer  (an  "AUTHENTICATION  ORDER"),  authenticate  Notes for
original issue.

         The Trustee  may  appoint an  authenticating  agent  acceptable  to the
Issuer to authenticate  Notes. An  authenticating  agent may authenticate  Notes
whenever  the  Trustee  may  do  so.  Each   reference  in  this   Indenture  to
authentication  by  the  Trustee  includes  authentication  by  such  agent.  An
authenticating  agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Issuer.

SECTION 2.03.     REGISTRAR AND PAYING AGENT.

         The  Issuer  shall  maintain  an office or  agency  where  Notes may be
presented  for  registration  of transfer or for exchange  ("REGISTRAR")  and an
office or agency where Notes may be presented for payment ("PAYING AGENT").  The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Issuer may  appoint  one or more  co-registrars  and one or more  additional
paying  agents.  The term  "Registrar"  includes any  co-registrar  and the term
"Paying Agent" includes any additional  paying agent.  The Issuer may change any
Paying Agent or Registrar without notice to any Holder.  The Issuer shall notify
the  Trustee in writing of the name and address of any Agent not a party to this
Indenture.  If the  Issuer  fails to  appoint  or  maintain  another  entity  as
Registrar or Paying Agent,  the Trustee shall act as such.  The Issuer or any of
its Subsidiaries may act as Paying Agent or Registrar.

         The Issuer  initially  appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.

         The Issuer  initially  appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.

SECTION 2.04.  PAYING AGENT TO HOLD MONEY IN TRUST.

         The Issuer  shall  require  each Paying Agent other than the Trustee to
agree in  writing  that the Paying  Agent will hold in trust for the  benefit of
Holders or the  Trustee  all money held by the Paying  Agent for the  payment of
principal,  premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Issuer in making any such payment.
While any such default continues,  the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Issuer at any time may require a Paying
Agent to pay all  money  held by it to the  Trustee.  Upon  payment  over to the
Trustee,  the  Paying  Agent (if other than the  Issuer or a  Subsidiary  of the
Issuer)  shall  have no  further  liability  for the  money.  If the Issuer or a
Subsidiary of the Issuer acts as Paying Agent,  it shall segregate and hold in a
separate  trust  fund for the  benefit  of the  Holders  all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to such
Issuer, the Trustee shall serve as Paying Agent for the Notes.

SECTION 2.05. HOLDER LISTS.

         The  Trustee  shall  preserve  in as  current  a form as is  reasonably
practicable  the most recent list  available to it of the names and addresses of
all Holders and shall  otherwise  comply with TIA ss. 312(a).  If thE Trustee is
not the  Registrar,  the  Issuer  shall  furnish to the  Trustee at least  seven
Business  Days,  or such  shorter  time as the Trustee  will allow,  before each
interest  payment  date and at such other  times as the  Trustee  may request in
writing,  a list in such form and as of such date as the Trustee may  reasonably

                                       18
<PAGE>

require of the names and  addresses of the Holders of Notes and the Issuer shall
otherwise comply with TIA ss. 312(a).

SECTION 2.06. TRANSFER AND EXCHANGE.

         (a)  TRANSFER AND  EXCHANGE OF GLOBAL  NOTES.  A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the  Depositary,
by a nominee of the  Depositary to the  Depositary or to another  nominee of the
Depositary,  or by the Depositary or any such nominee to a successor  Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Issuer for Definitive Notes if (i) the Issuer delivers to the Trustee notice
from the  Depositary  that it is  unwilling  or  unable  to  continue  to act as
Depositary  or that it is no  longer a  clearing  agency  registered  under  the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Issuer within 120 days after the date of such notice from the Depositary or (ii)
the Issuer in their sole  discretion  determines that the Global Notes (in whole
but not in part) should be exchanged for Definitive  Notes and deliver a written
notice  to such  effect  to the  Trustee;  PROVIDED  that in no event  shall the
Regulation S Temporary  Global Note be  exchanged  by the Issuer for  Definitive
Notes prior to (x) the expiration of the  Restricted  Period and (y) the receipt
by the Registrar of any certificates  required pursuant to Rule 903(b)(3)(ii)(B)
under the Securities Act. Upon the occurrence of either of the preceding  events
in (i) or (ii)  above,  Definitive  Notes  shall be issued in such  names as the
Depositary  shall  instruct the  Trustee.  Global Notes also may be exchanged or
replaced,  in whole or in part,  as provided in Sections  2.07 and 2.10  hereof.
Every Note  authenticated and delivered in exchange for, or in lieu of, a Global
Note or any portion  thereof,  pursuant to this  Section 2.06 or Section 2.07 or
2.10 hereof,  shall be authenticated and delivered in the form of, and shall be,
a Global Note. A Global Note may not be exchanged for another Note other than as
provided in this Section 2.06(a), however, beneficial interests in a Global Note
may be  transferred  and  exchanged as provided in Section  2.06(b),  (c) or (f)
hereof.

         (b) TRANSFER AND EXCHANGE OF BENEFICIAL  INTERESTS IN THE GLOBAL NOTES.
The transfer and exchange of  beneficial  interests in the Global Notes shall be
effected  through the  Depositary,  in  accordance  with the  provisions of this
Indenture and the Applicable Procedures.  Beneficial interests in the Restricted
Global Notes shall be subject to  restrictions  on transfer  comparable to those
set forth  herein to the extent  required by the  Securities  Act.  Transfers of
beneficial  interests in the Global  Notes also shall  require  compliance  with
either subparagraph (i) or (ii) below, as applicable,  as well as one or more of
the other following subparagraphs, as applicable:

              (i)  TRANSFER OF  BENEFICIAL  INTERESTS  IN THE SAME GLOBAL  NOTE.
         Beneficial  interests in any Restricted  Global Note may be transferred
         to  Persons  who take  delivery  thereof  in the  form of a  beneficial
         interest  in the same  Restricted  Global Note in  accordance  with the
         transfer  restrictions  set  forth  in the  Private  Placement  Legend;
         PROVIDED,  HOWEVER,  that  prior to the  expiration  of the  Restricted
         Period, transfers of beneficial interests in the Regulation S Temporary
         Global  Note may not be made to a U.S.  Person  or for the  account  or
         benefit of a U.S. Person (other than an Initial Purchaser).  Beneficial
         interests in any Unrestricted Global Note may be transferred to Persons
         who take  delivery  thereof in the form of a beneficial  interest in an
         Unrestricted  Global Note. No written orders or  instructions  shall be
         required  to be  delivered  to the  Registrar  to effect the  transfers
         described in this Section 2.06(b)(i).

              (ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL  INTERESTS IN
         GLOBAL  NOTES.  In  connection  with all  transfers  and  exchanges  of
         beneficial  interests that are not subject to Section 2.06(b)(i) above,
         the  transferor  of  such  beneficial  interest  must  deliver  to  the
         Registrar  either  (A) (1) a written  order  from a  Participant  or an
         Indirect  Participant  given to the  Depositary in accordance  with the
         Applicable Procedures directing the Depositary to credit or cause to be
         credited a  beneficial  interest  in another  Global  Note in an amount
         equal to the beneficial interest

                                       19
<PAGE>

          to  be  transferred  or  exchanged  and  (2)  instructions   given  in
          accordance  with  the  Applicable  Procedures  containing  information
          regarding the Participant account to be credited with such increase or
          (B) (1) a written order from a Participant or an Indirect  Participant
          given to the Depositary in accordance  with the Applicable  Procedures
          directing the Depositary to cause to be issued a Definitive Note in an
          amount equal to the beneficial interest to be transferred or exchanged
          and  (2)  instructions  given  by  the  Depositary  to  the  Registrar
          containing  information  regarding  the  Person  in  whose  name  such
          Definitive Note shall be registered to effect the transfer or exchange
          referred to in (1) above;  PROVIDED that in no event shall  Definitive
          Notes be issued upon the transfer or exchange of beneficial  interests
          in the Regulation S Temporary  Global Note prior to (x) the expiration
          of the  Restricted  Period and (y) the receipt by the Registrar of any
          certificates  required  pursuant to Rule 903 under the Securities Act.
          Upon  consummation  of an Exchange  Offer by the Issuer in  accordance
          with  Section  2.06(f)  hereof,   the  requirements  of  this  Section
          2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the
          Registrar of the  instructions  contained in the Letter of Transmittal
          delivered by the Holder of such beneficial interests in the Restricted
          Global  Notes.  Upon  satisfaction  of  all of  the  requirements  for
          transfer or exchange of beneficial interests in Global Notes contained
          in this  Indenture  and the Notes or  otherwise  applicable  under the
          Securities  Act, the Trustee shall adjust the principal  amount of the
          relevant Global Note(s) pursuant to Section 2.06(h) hereof.

              (iii) TRANSFER OF BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE
         TO  ANOTHER  RESTRICTED  GLOBAL  NOTE.  A  beneficial  interest  in any
         Restricted  Global  Note  may be  transferred  to a  Person  who  takes
         delivery  thereof  in the  form of a  beneficial  interest  in  another
         Restricted  Global Note if the transfer  complies with the requirements
         of Section 2.06(b)(ii) above and the Registrar receives the following:

                    (A) if the  transferee  will take  delivery in the form of a
              beneficial  interest in the 144A Global Note,  then the transferor
              must  deliver  a  certificate  in the form of  Exhibit  B  hereto,
              including the certifications in item (1) thereof;

                    (B) if the  transferee  will take  delivery in the form of a
              beneficial  interest in the Regulation S Temporary  Global Note or
              the Regulation S Global Note,  then the transferor  must deliver a
              certificate  in the  form  of  Exhibit  B  hereto,  including  the
              certifications in item (2) thereof; and

                    (C) if the  transferee  will take  delivery in the form of a
              beneficial  interest in the IAI Global Note,  then the  transferor
              must  deliver  a  certificate  in the form of  Exhibit  B  hereto,
              including  the  certifications  and  certificates  and  Opinion of
              Counsel required by item (3) thereof, if applicable.

              (iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A RESTRICTED
         GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED GLOBAL NOTE. A
         beneficial  interest in any Restricted  Global Note may be exchanged by
         any holder thereof for a beneficial  interest in an Unrestricted Global
         Note or transferred to a Person who takes delivery  thereof in the form
         of a beneficial interest in an Unrestricted Global Note if the exchange
         or transfer complies with the requirements of Section 2.06(b)(ii) above
         and:

                    (A) such  exchange or  transfer is effected  pursuant to the
              Exchange  Offer  in  accordance  with  the   Registration   Rights
              Agreement  and  the  holder  of  the  beneficial  interest  to  be
              transferred, in the case of an exchange, or the transferee, in the
              case  of  a  transfer,  certifies  in  the  applicable  Letter  of
              Transmittal that it is not (1) a broker-dealer,

                                       20
<PAGE>

              (2) a Person  participating  in the  distribution  of the Exchange
              Notes or (3) a Person who is an affiliate (as defined in Rule 144)
              of the Issuer;

                    (B)  such  transfer  is  effected   pursuant  to  the  Shelf
              Registration  Statement in accordance with the Registration Rights
              Agreement;

                    (C) such transfer is effected by a Broker-Dealer pursuant to
              the Exchange Offer  Registration  Statement in accordance with the
              Registration Rights Agreement; or

                    (D) the Registrar receives the following:

                        (1) if the  holder  of  such  beneficial  interest  in a
                    Restricted  Global Note proposes to exchange such beneficial
                    interest for a beneficial interest in an Unrestricted Global
                    Note, a certificate  from such holder in the form of Exhibit
                    C  hereto,  including  the  certifications  in  item  (1)(a)
                    thereof; or

                        (2) if the  holder  of  such  beneficial  interest  in a
                    Restricted  Global Note proposes to transfer such beneficial
                    interest to a Person who shall take delivery  thereof in the
                    form of a  beneficial  interest  in an  Unrestricted  Global
                    Note, a certificate  from such holder in the form of Exhibit
                    B hereto, including the certifications in item (4) thereof;

              and, in each such case set forth in this  subparagraph (D), if the
              Registrar so requests or if the Applicable  Procedures so require,
              an  Opinion  of  Counsel  in  form  reasonably  acceptable  to the
              Registrar  to the effect  that such  exchange  or  transfer  is in
              compliance  with the Securities Act and that the  restrictions  on
              transfer  contained herein and in the Private Placement Legend are
              no  longer  required  in order  to  maintain  compliance  with the
              Securities Act.

         If any such transfer is effected  pursuant to  subparagraph  (B) or (D)
above at a time when an  Unrestricted  Global Note has not yet been issued,  the
Issuer shall issue and,  upon receipt of an  Authentication  Order in accordance
with  Section  2.02  hereof,   the  Trustee  shall   authenticate  one  or  more
Unrestricted  Global  Notes  in an  aggregate  principal  amount  equal  to  the
aggregate  principal  amount of  beneficial  interests  transferred  pursuant to
subparagraph (B) or (D) above.

         Beneficial interests in an Unrestricted Global Note cannot be exchanged
for,  or  transferred  to Persons  who take  delivery  thereof in the form of, a
beneficial interest in a Restricted Global Note.

         (c) Transfer or Exchange of Beneficial Interests for Definitive Notes.

             (i)  BENEFICIAL  INTERESTS IN RESTRICTED GLOBAL NOTES TO RESTRICTED
         DEFINITIVE  NOTES.  If  any  holder  of  a  beneficial  interest  in  a
         Restricted  Global Note proposes to exchange such  beneficial  interest
         for a  Restricted  Definitive  Note  or  to  transfer  such  beneficial
         interest  to a  Person  who  takes  delivery  thereof  in the form of a
         Restricted  Definitive Note, then, upon receipt by the Registrar of the
         following documentation:

                    (A)  if  the  holder  of  such  beneficial   interest  in  a
              Restricted  Global  Note  proposes  to  exchange  such  beneficial
              interest for a Restricted Definitive Note, a certificate from such
              holder  in  the  form  of   Exhibit  C   hereto,   including   the
              certifications in item (2)(a) thereof;

                                       21
<PAGE>

                    (B) if such  beneficial  interest is being  transferred to a
              QIB in  accordance  with Rule 144A  under the  Securities  Act,  a
              certificate to the effect set forth in Exhibit B hereto, including
              the certifications in item (1) thereof;

                    (C) if such  beneficial  interest is being  transferred to a
              Non-U.S. Person in an offshore transaction in accordance with Rule
              903 or Rule 904 under the  Securities  Act, a  certificate  to the
              effect set forth in Exhibit B hereto, including the certifications
              in item (2) thereof;

                    (D)  if  such  beneficial   interest  is  being  transferred
              pursuant to an exemption from the registration requirements of the
              Securities  Act in accordance  with Rule 144 under the  Securities
              Act,  a  certificate  to the effect set forth in Exhibit B hereto,
              including the certifications in item (3)(a) thereof;

                    (E) if such beneficial  interest is being  transferred to an
              Institutional Accredited Investor in reliance on an exemption from
              the  registration  requirements  of the  Securities Act other than
              those listed in subparagraphs (B) through (D) above, a certificate
              to the  effect  set  forth in  Exhibit  B  hereto,  including  the
              certifications,  certificates  and Opinion of Counsel  required by
              item (3) thereof, if applicable;

                    (F) if such beneficial  interest is being transferred to the
              Issuer or any of its Subsidiaries, a certificate to the effect set
              forth in Exhibit B hereto,  including the  certifications  in item
              (3)(b) thereof; or

                    (G)  if  such  beneficial   interest  is  being  transferred
              pursuant  to  an  effective   registration   statement  under  the
              Securities Act, a certificate to the effect set forth in Exhibit B
              hereto, including the certifications in item (3)(c) thereof,

         the  Trustee  shall  cause  the  aggregate   principal  amount  of  the
         applicable  Global Note to be reduced  accordingly  pursuant to Section
         2.06(h)  hereof,  and the Issuer  shall  execute and the Trustee  shall
         authenticate and deliver to the Person designated in the instructions a
         Definitive Note in the  appropriate  principal  amount.  Any Definitive
         Note  issued in exchange  for a  beneficial  interest  in a  Restricted
         Global Note  pursuant to this Section  2.06(c)  shall be  registered in
         such name or names and in such authorized denomination or denominations
         as the holder of such beneficial  interest shall instruct the Registrar
         through  instructions  from  the  Depositary  and  the  Participant  or
         Indirect Participant. The Trustee shall mail or deliver such Definitive
         Notes to the Persons in whose names such Notes are so  registered.  Any
         Definitive  Note  issued in  exchange  for a  beneficial  interest in a
         Restricted  Global Note pursuant to this Section  2.06(c)(i) shall bear
         the Private  Placement  Legend and shall be subject to all restrictions
         on transfer contained therein.

              (ii) BENEFICIAL INTERESTS IN REGULATION S TEMPORARY GLOBAL NOTE TO
         DEFINITIVE  NOTES.   Notwithstanding  Sections  2.06(c)(i)(A)  and  (C)
         hereof, a beneficial interest in the Regulation S Temporary Global Note
         may not be exchanged for a Definitive  Note or  transferred to a Person
         who takes  delivery  thereof in the form of a Definitive  Note prior to
         (x) the expiration of the Restricted  Period and (y) the receipt by the
         Registrar   of   any   certificates    required    pursuant   to   Rule
         903(b)(3)(ii)(B)  under  the  Securities  Act,  except in the case of a
         transfer pursuant to an exemption from the registration requirements of
         the Securities Act other than Rule 903 or Rule 904.

                                       22
<PAGE>

              (iii)   BENEFICIAL   INTERESTS  IN  RESTRICTED   GLOBAL  NOTES  TO
         UNRESTRICTED  DEFINITIVE NOTES. A holder of a beneficial  interest in a
         Restricted  Global Note may exchange  such  beneficial  interest for an
         Unrestricted  Definitive Note or may transfer such beneficial  interest
         to a Person who takes delivery  thereof in the form of an  Unrestricted
         Definitive Note only if:

                    (A) such  exchange or  transfer is effected  pursuant to the
              Exchange  Offer  in  accordance  with  the   Registration   Rights
              Agreement and the holder of such beneficial interest,  in the case
              of an  exchange,  or the  transferee,  in the case of a  transfer,
              certifies in the applicable  Letter of Transmittal  that it is not
              (1)  a   broker-dealer,   (2)  a  Person   participating   in  the
              distribution  of the  Exchange  Notes  or (3) a  Person  who is an
              affiliate (as defined in Rule 144) of the Issuer;

                    (B)  such  transfer  is  effected   pursuant  to  the  Shelf
              Registration  Statement in accordance with the Registration Rights
              Agreement;

                    (C) such transfer is effected by a Broker-Dealer pursuant to
              the Exchange Offer  Registration  Statement in accordance with the
              Registration Rights Agreement; or

                    (D) the Registrar receives the following:

                        (1) if the  holder  of  such  beneficial  interest  in a
                    Restricted  Global Note proposes to exchange such beneficial
                    interest  for a  Definitive  Note  that  does  not  bear the
                    Private  Placement Legend, a certificate from such holder in
                    the form of Exhibit C hereto,  including the  certifications
                    in item (1)(b) thereof; or

                        (2) if the  holder  of  such  beneficial  interest  in a
                    Restricted  Global Note proposes to transfer such beneficial
                    interest to a Person who shall take delivery  thereof in the
                    form of a  Definitive  Note that  does not bear the  Private
                    Placement Legend, a certificate from such holder in the form
                    of Exhibit B hereto,  including the  certifications  in item
                    (4) thereof;

              and, in each such case set forth in this  subparagraph (D), if the
              Registrar so requests or if the Applicable  Procedures so require,
              an  Opinion  of  Counsel  in  form  reasonably  acceptable  to the
              Registrar  to the effect  that such  exchange  or  transfer  is in
              compliance  with the Securities Act and that the  restrictions  on
              transfer  contained herein and in the Private Placement Legend are
              no  longer  required  in order  to  maintain  compliance  with the
              Securities Act.

              (iv)  BENEFICIAL   INTERESTS  IN  UNRESTRICTED   GLOBAL  NOTES  TO
         UNRESTRICTED  DEFINITIVE NOTES. If any holder of a beneficial  interest
         in an  Unrestricted  Global Note proposes to exchange  such  beneficial
         interest for a Definitive Note or to transfer such beneficial  interest
         to a Person  who takes  delivery  thereof  in the form of a  Definitive
         Note,  then,  upon  satisfaction of the conditions set forth in Section
         2.06(b)(ii)  hereof,  the Trustee shall cause the  aggregate  principal
         amount of the applicable Global Note to be reduced accordingly pursuant
         to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee
         shall  authenticate and mail or deliver to the Person designated in the
         instructions a Definitive Note in the appropriate principal amount. Any
         Definitive Note issued in exchange for a beneficial  interest  pursuant
         to this Section  2.06(c)(iv)  shall be registered in such name or names
         and in such authorized  denomination or  denominations as the holder of
         such   beneficial   interest  shall  instruct  the  Registrar   through
         instructions  from  the  Depositary  and the  Participant  or  Indirect
         Participant. The Trustee shall mail or deliver such Definitive Notes to
         the Persons in whose names such Notes are so registered. Any Definitive

                                       23
<PAGE>

         Note  issued in exchange  for a  beneficial  interest  pursuant to this
         Section 2.06(c)(iv) shall not bear the Private Placement Legend.

         (d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL INTERESTS.

              (i)  RESTRICTED   DEFINITIVE  NOTES  TO  BENEFICIAL  INTERESTS  IN
         RESTRICTED GLOBAL NOTES. If any Holder of a Restricted  Definitive Note
         proposes  to  exchange  such  Note  for  a  beneficial  interest  in  a
         Restricted Global Note or to transfer such Restricted  Definitive Notes
         to a Person  who takes  delivery  thereof  in the form of a  beneficial
         interest  in a  Restricted  Global  Note,  then,  upon  receipt  by the
         Registrar of the following documentation:

                    (A)  if  the  Holder  of  such  Restricted  Definitive  Note
              proposes  to  exchange  such Note for a  beneficial  interest in a
              Restricted Global Note, a certificate from such Holder in the form
              of Exhibit C hereto,  including the  certifications in item (2)(b)
              thereof;

                    (B) if such Restricted  Definitive Note is being transferred
              to a QIB in accordance  with Rule 144A under the Securities Act, a
              certificate to the effect set forth in Exhibit B hereto, including
              the certifications in item (1) thereof;

                    (C) if such Restricted  Definitive Note is being transferred
              to a Non-U.S. Person in an offshore transaction in accordance with
              Rule 903 or Rule 904 under the  Securities  Act, a certificate  to
              the  effect  set  forth  in  Exhibit  B  hereto,   including   the
              certifications in item (2) thereof;

                    (D) if such Restricted  Definitive Note is being transferred
              pursuant to an exemption from the registration requirements of the
              Securities  Act in accordance  with Rule 144 under the  Securities
              Act,  a  certificate  to the effect set forth in Exhibit B hereto,
              including the certifications in item (3)(a) thereof;

                    (E) if such Restricted  Definitive Note is being transferred
              to  an  Institutional   Accredited  Investor  in  reliance  on  an
              exemption from the registration requirements of the Securities Act
              other than those listed in subparagraphs  (B) through (D) above, a
              certificate to the effect set forth in Exhibit B hereto, including
              the  certifications,  certificates and Opinion of Counsel required
              by item (3) thereof, if applicable;

                    (F) if such Restricted  Definitive Note is being transferred
              to the Issuer or any of its  Subsidiaries,  a  certificate  to the
              effect set forth in Exhibit B hereto, including the certifications
              in item (3)(b) thereof; or

                    (G) if such Restricted  Definitive Note is being transferred
              pursuant  to  an  effective   registration   statement  under  the
              Securities Act, a certificate to the effect set forth in Exhibit B
              hereto, including the certifications in item (3)(c) thereof,

         the Trustee shall cancel the Restricted  Definitive  Note,  increase or
         cause to be increased the aggregate principal amount of, in the case of
         clause (A) above, the appropriate  Restricted  Global Note, in the case
         of clause (B) above,  the 144A Global  Note,  in the case of clause (C)
         above,  the Regulation S Global Note,  and in all other cases,  the IAI
         Global Note.

              (ii)  RESTRICTED  DEFINITIVE  NOTES  TO  BENEFICIAL  INTERESTS  IN
         UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may
         exchange such Note for a beneficial  interest in an

                                       24
<PAGE>

         Unrestricted Global Note or transfer such Restricted Definitive Note to
         a  Person  who  takes  delivery  thereof  in the  form of a  beneficial
         interest in an Unrestricted Global Note only if:

                    (A) such  exchange or  transfer is effected  pursuant to the
              Exchange  Offer  in  accordance  with  the   Registration   Rights
              Agreement  and the  Holder,  in the  case of an  exchange,  or the
              transferee, in the case of a transfer, certifies in the applicable
              Letter of Transmittal  that it is not (1) a  broker-dealer,  (2) a
              Person  participating in the distribution of the Exchange Notes or
              (3) a Person who is an  affiliate  (as defined in Rule 144) of the
              Issuer;

                    (B)  such  transfer  is  effected   pursuant  to  the  Shelf
              Registration  Statement in accordance with the Registration Rights
              Agreement;

                    (C) such transfer is effected by a Broker-Dealer pursuant to
              the Exchange Offer  Registration  Statement in accordance with the
              Registration Rights Agreement; or

                    (D) the Registrar receives the following:

                        (1) if the Holder of such  Definitive  Notes proposes to
                    exchange  such  Notes  for  a  beneficial  interest  in  the
                    Unrestricted  Global Note, a certificate from such Holder in
                    the form of Exhibit C hereto,  including the  certifications
                    in item (1)(c) thereof; or

                        (2) if the Holder of such  Definitive  Notes proposes to
                    transfer  such  Notes to a Person  who shall  take  delivery
                    thereof  in  the  form  of  a  beneficial  interest  in  the
                    Unrestricted  Global Note, a certificate from such Holder in
                    the form of Exhibit B hereto,  including the  certifications
                    in item (4) thereof;

              and, in each such case set forth in this  subparagraph (D), if the
              Registrar so requests or if the Applicable  Procedures so require,
              an  Opinion  of  Counsel  in  form  reasonably  acceptable  to the
              Registrar  to the effect  that such  exchange  or  transfer  is in
              compliance  with the Securities Act and that the  restrictions  on
              transfer  contained herein and in the Private Placement Legend are
              no  longer  required  in order  to  maintain  compliance  with the
              Securities Act.

                  Upon   satisfaction   of   the   conditions   of  any  of  the
         subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the
         Definitive  Notes and increase or cause to be increased  the  aggregate
         principal amount of the Unrestricted Global Note.

              (iii)  UNRESTRICTED  DEFINITIVE  NOTES TO BENEFICIAL  INTERESTS IN
         UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted  Definitive Note
         may  exchange  such Note for a beneficial  interest in an  Unrestricted
         Global Note or  transfer  such  Definitive  Notes to a Person who takes
         delivery   thereof  in  the  form  of  a  beneficial   interest  in  an
         Unrestricted  Global  Note at any time.  Upon  receipt of a request for
         such an exchange or transfer,  the Trustee shall cancel the  applicable
         Unrestricted  Definitive Note and increase or cause to be increased the
         aggregate principal amount of one of the Unrestricted Global Notes.

              If any such  exchange  or  transfer  from a  Definitive  Note to a
         beneficial  interest is effected  pursuant  to  subparagraphs  (ii)(B),
         (ii)(D) or (iii) above at a time when an  Unrestricted  Global Note has
         not yet been  issued,  the Issuer  shall issue and,  upon receipt of an
         Authentication  Order in  accordance  with  Section  2.02  hereof,  the
         Trustee shall authenticate one or more Unrestricted

                                       25
<PAGE>

         Global Notes in an aggregate  principal  amount equal to the  principal
         amount of Definitive Notes so transferred.

         (e) TRANSFER AND EXCHANGE OF  DEFINITIVE  NOTES FOR  DEFINITIVE  NOTES.
Upon request by a Holder of Definitive  Notes and such Holder's  compliance with
the  provisions  of this  Section  2.06(e),  the  Registrar  shall  register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange,  the requesting  Holder shall present or surrender to the Registrar
the Definitive  Notes duly endorsed or  accompanied by a written  instruction of
transfer in form  satisfactory  to the Registrar duly executed by such Holder or
by its attorney,  duly authorized in writing. In addition, the requesting Holder
shall  provide any  additional  certifications,  documents and  information,  as
applicable,  required  pursuant  to the  following  provisions  of this  Section
2.06(e).

              (i) RESTRICTED  DEFINITIVE NOTES TO RESTRICTED  DEFINITIVE  NOTES.
         Any Restricted  Definitive Note may be transferred to and registered in
         the  name  of  Persons  who  take  delivery  thereof  in the  form of a
         Restricted Definitive Note if the Registrar receives the following:

                    (A) if the transfer will be made pursuant to Rule 144A under
              the Securities Act, then the transferor must deliver a certificate
              in the form of Exhibit B hereto,  including the  certifications in
              item (1) thereof;

                    (B) if the  transfer  will be made  pursuant  to Rule 903 or
              Rule 904, then the  transferor  must deliver a certificate  in the
              form of Exhibit B hereto, including the certifications in item (2)
              thereof; and

                    (C) if the  transfer  will be  made  pursuant  to any  other
              exemption  from the  registration  requirements  of the Securities
              Act, then the transferor must deliver a certificate in the form of
              Exhibit B hereto,  including the certifications,  certificates and
              Opinion of Counsel required by item (3) thereof, if applicable.

              (ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE NOTES.
         Any Restricted  Definitive  Note may be exchanged by the Holder thereof
         for an  Unrestricted  Definitive  Note or  transferred  to a Person  or
         Persons  who  take  delivery  thereof  in the  form of an  Unrestricted
         Definitive Note if:

                    (A) such  exchange or  transfer is effected  pursuant to the
              Exchange  Offer  in  accordance  with  the   Registration   Rights
              Agreement  and the  Holder,  in the  case of an  exchange,  or the
              transferee, in the case of a transfer, certifies in the applicable
              Letter of Transmittal  that it is not (1) a  broker-dealer,  (2) a
              Person  participating in the distribution of the Exchange Notes or
              (3) a Person who is an  affiliate  (as defined in Rule 144) of the
              Issuer;

                    (B) any such  transfer  is  effected  pursuant  to the Shelf
              Registration  Statement in accordance with the Registration Rights
              Agreement;

                    (C)  any  such  transfer  is  effected  by  a  Broker-Dealer
              pursuant  to  the  Exchange   Offer   Registration   Statement  in
              accordance with the Registration Rights Agreement; or

                    (D) the Registrar receives the following:

                                       26
<PAGE>

                        (1) if the Holder of such  Restricted  Definitive  Notes
                    proposes  to  exchange   such  Notes  for  an   Unrestricted
                    Definitive  Note, a certificate from such Holder in the form
                    of Exhibit C hereto,  including the  certifications  in item
                    (1)(d) thereof; or

                        (2) if the Holder of such  Restricted  Definitive  Notes
                    proposes to  transfer  such Notes to a Person who shall take
                    delivery  thereof in the form of an Unrestricted  Definitive
                    Note, a certificate  from such Holder in the form of Exhibit
                    B hereto, including the certifications in item (4) thereof;

                  and, in each such case set forth in this  subparagraph (D), if
                  the  Registrar  so  requests,  an  Opinion  of Counsel in form
                  reasonably  acceptable  to the Issuer to the effect  that such
                  exchange or transfer is in compliance  with the Securities Act
                  and that the restrictions on transfer  contained herein and in
                  the Private  Placement  Legend are no longer required in order
                  to maintain compliance with the Securities Act.

              (iii)  UNRESTRICTED  DEFINITIVE  NOTES TO UNRESTRICTED  DEFINITIVE
         NOTES.  A Holder of  Unrestricted  Definitive  Notes may transfer  such
         Notes  to a  Person  who  takes  delivery  thereof  in the  form  of an
         Unrestricted  Definitive  Note.  Upon  receipt of a request to register
         such  a  transfer,   the  Registrar  shall  register  the  Unrestricted
         Definitive Notes pursuant to the instructions from the Holder thereof.

         (f)  EXCHANGE  OFFER.  Upon the  occurrence  of the  Exchange  Offer in
accordance with the Registration  Rights Agreement,  the Issuer shall issue and,
upon receipt of an  Authentication  Order in accordance  with Section 2.02,  the
Trustee  shall  authenticate  (i) one or more  Unrestricted  Global  Notes in an
aggregate  principal  amount  equal to the  principal  amount of the  beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify  in the  applicable  Letters  of  Transmittal  that  (x)  they  are  not
Broker-Dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not  affiliates  (as  defined in Rule 144) of the Issuer,
and accepted for exchange in the Exchange Offer and (ii) Unrestricted Definitive
Notes in an  aggregate  principal  amount equal to the  principal  amount of the
Restricted  Definitive  Notes  accepted  for  exchange  in the  Exchange  Offer.
Concurrently  with the  issuance  of such  Notes,  the  Trustee  shall cause the
aggregate  principal  amount of the  applicable  Restricted  Global  Notes to be
reduced  accordingly,  and  the  Issuer  shall  execute  and the  Trustee  shall
authenticate  and mail or deliver to the  Persons  designated  by the Holders of
Definitive  Notes so accepted  Unrestricted  Definitive Notes in the appropriate
principal amount.

         (g)  LEGENDS.  The  following  legends  shall appear on the face of all
Global  Notes  and  Definitive   Notes  issued  under  this   Indenture   unless
specifically stated otherwise in the applicable provisions of this Indenture.

              (i) PRIVATE PLACEMENT LEGEND.

                    (A) Except as  permitted  by  subparagraph  (B) below,  each
              Global  Note and each  Definitive  Note (and all  Notes  issued in
              exchange  therefor or substitution  thereof) shall bear the legend
              in substantially the following form:

"THE SECURITY (OR ITS PREDECESSOR)  EVIDENCED HEREBY WAS ORIGINALLY  ISSUED IN A
TRANSACTION  EXEMPT  FROM  REGISTRATION  UNDER  SECTION 5 OF THE  UNITED  STATES
SECURITIES  ACT OF 1933,  AS AMENDED (THE  "SECURITIES  ACT"),  AND THE SECURITY
EVIDENCED  HEREBY  MAY NOT BE  OFFERED,  SOLD OR  OTHERWISE  TRANSFERRED  IN THE
ABSENCE  OF  SUCH  REGISTRATION  OR  AN  APPLICABLE

                                       27
<PAGE>

EXEMPTION  THEREFROM.  EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION  FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.  THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH
SECURITY  MAY BE RESOLD,  PLEDGED OR OTHERWISE  TRANSFERRED  ONLY (1) (a) IN THE
UNITED  STATES TO A PERSON WHO THE SELLER  REASONABLY  BELIEVES  IS A  QUALIFIED
INSTITUTIONAL  BUYER (AS  DEFINED  IN RULE 144A UNDER THE  SECURITIES  ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(c) IN A TRANSACTION  MEETING THE  REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT,  (d) TO AN  INSTITUTIONAL  "ACCREDITED  INVESTOR"  (AS  DEFINED IN RULE 501
(a)(1),  (2), (3) OR (7) OF THE  SECURITIES  ACT (AN  "INSTITUTIONAL  ACCREDITED
INVESTOR"))  THAT,  PRIOR TO SUCH  TRANSFER,  FURNISHES  THE  REGISTRAR A SIGNED
LETTER CONTAINING CERTAIN  REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN
BE  OBTAINED  FROM THE  REGISTRAR)  AND,  IF SUCH  TRANSFER  IS IN RESPECT OF AN
AGGREGATE  PRINCIPAL  AMOUNT OF NOTES LESS THAN $250,000,  AN OPINION OF COUNSEL
ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT  OR  (e)  IN  ACCORDANCE  WITH  ANOTHER   EXEMPTION  FROM  THE  REGISTRATION
REQUIREMENTS  OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
ISSUER  SO  REQUESTS),  (2)  TO  THE  ISSUER  OR (3)  PURSUANT  TO AN  EFFECTIVE
REGISTRATION  STATEMENT  AND, IN EACH CASE,  IN ACCORDANCE  WITH ANY  APPLICABLE
SECURITIES  LAWS OF ANY  STATE OF THE  UNITED  STATES  OR ANY  OTHER  APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY  PURCHASER  FROM IT OF THE  SECURITY  EVIDENCED  HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."

                    (B)  Notwithstanding  the  foregoing,  any  Global  Note  or
              Definitive   Note  issued  pursuant  to   subparagraphs   (b)(iv),
              (c)(iii),  (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to
              this Section  2.06 (and all Notes  issued in exchange  therefor or
              substitution thereof) shall not bear the Private Placement Legend.

              (ii) GLOBAL NOTE  LEGEND.  Each Global Note shall bear a legend in
         substantially the following form:

"THIS  GLOBAL  NOTE IS HELD  BY THE  DEPOSITARY  (AS  DEFINED  IN THE  INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF,  AND IS NOT  TRANSFERABLE  TO ANY PERSON UNDER ANY  CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE  MAY MAKE SUCH  NOTATIONS  HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OR IN  ACCORDANCE  WITH SECTION 9.05 OF THE  INDENTURE,
(II) THIS  GLOBAL  NOTE MAY BE  EXCHANGED  IN WHOLE BUT NOT IN PART  PURSUANT TO
SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR  DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE ISSUER.

UNLESS  AND UNTIL IT IS  EXCHANGED  IN WHOLE OR IN PART FOR NOTES IN  DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED  EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY

                                       28
<PAGE>

THE  DEPOSITARY  OR ANY SUCH NOMINEE TO A SUCCESSOR  DEPOSITARY  OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE  OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET,  NEW YORK, NEW
YORK) ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT,  AND ANY CERTIFICATE  ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER  ENTITY AS MAY BE REQUESTED
BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC),  ANY  TRANSFER,  PLEDGE OR OTHER USE
HEREOF FOR VALUE OR  OTHERWISE  BY OR TO ANY PERSON IS WRONGFUL  INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."

              (iii) REGULATION S TEMPORARY GLOBAL NOTE LEGEND.  The Regulation S
         Temporary  Global  Note  shall  bear  a  legend  in  substantially  the
         following form:

"THE RIGHTS  ATTACHING  TO THIS  REGULATION  S TEMPORARY  GLOBAL  NOTE,  AND THE
CONDITIONS AND PROCEDURES  GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED  IN THE  INDENTURE  (AS  DEFINED  HEREIN).  NEITHER THE HOLDER NOR THE
BENEFICIAL  OWNERS OF THIS REGULATION S TEMPORARY  GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."

         (h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as all
beneficial  interests  in a  particular  Global  Note  have been  exchanged  for
Definitive Notes or a particular  Global Note has been redeemed,  repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof.  At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or  transferred  to a Person who will take delivery  thereof in
the form of a  beneficial  interest  in another  Global  Note or for  Definitive
Notes,  the principal  amount of Notes  represented by such Global Note shall be
reduced  accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the  Depositary  at the  direction  of the Trustee to reflect such
reduction;  and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial  interest
in another  Global Note,  such other Global Note shall be increased  accordingly
and an  endorsement  shall be made on such  Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

         (i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.

              (i) To permit registrations of transfers and exchanges, the Issuer
         shall  execute  and,  upon  receipt  of  an  Authentication   Order  in
         accordance  with Section 2.02,  the Trustee shall  authenticate  Global
         Notes  and  Definitive   Notes  upon  the  Issuer's  order  or  at  the
         Registrar's request.

              (ii) No service  charge  shall be made to a Holder of a beneficial
         interest in a Global Note or to a Holder of a  Definitive  Note for any
         registration  of  transfer  or  exchange,  but the Issuer  may  require
         payment  of a sum  sufficient  to cover  any  transfer  tax or  similar
         governmental  charge  payable in connection  therewith  (other than any
         such  transfer  taxes  or  similar  governmental  charge  payable  upon
         exchange or transfer  pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15
         and 9.05 hereof).

              (iii)  All  Global  Notes and  Definitive  Notes  issued  upon any
         registration  of transfer or  exchange  of Global  Notes or  Definitive
         Notes shall be the valid obligations of the Issuer,

                                       29
<PAGE>

         evidencing  the same debt, and entitled to the same benefits under this
         Indenture,  as the Global Notes or Definitive  Notes  surrendered  upon
         such registration of transfer or exchange.

              (iv) Neither the Registrar nor the Issuer shall be required (A) to
         issue,  to register  the  transfer of or to exchange any Notes during a
         period  beginning  at the opening of business 15 days before the day of
         any  selection of Notes for  redemption  under  Section 3.02 hereof and
         ending  at the  close  of  business  on the  day of  selection,  (B) to
         register  the  transfer  of or to  exchange  any Note so  selected  for
         redemption in whole or in part,  except the  unredeemed  portion of any
         Note being  redeemed in part or (C) to register  the  transfer of or to
         exchange a Note between a record date and the next succeeding  Interest
         Payment Date.

              (v) Prior to due presentment for the registration of a transfer of
         any Note, the Trustee,  any Agent and the Issuer may deem and treat the
         Person in whose name any Note is  registered  as the absolute  owner of
         such Note for the  purpose of  receiving  payment of  principal  of and
         interest  on such  Notes  and for all other  purposes,  and none of the
         Trustee,  any Agent or the Issuer  shall be  affected  by notice to the
         contrary.

              (vi) The Trustee shall  authenticate  Global Notes and  Definitive
         Notes in accordance with the provisions of Section 2.02 hereof.

              (vii) All  certifications,  certificates  and  Opinions of Counsel
         required to be submitted to the Registrar pursuant to this Section 2.06
         to effect a  registration  of transfer or exchange  may be submitted by
         facsimile.

              (viii) The Trustee is hereby  authorized to enter into a letter of
         representation  with the  Depository in the form provided by the Issuer
         and to act in accordance with such letter.

SECTION 2.07.  REPLACEMENT NOTES.

         If any mutilated Note is surrendered to the Trustee or the Issuer,  and
the Trustee receives  evidence to its  satisfaction of the destruction,  loss or
theft of any Note,  the Issuer shall issue and the  Trustee,  upon receipt of an
Authentication  Order,  shall  authenticate a replacement  Note if the Trustee's
requirements  are met. If required  by the Trustee or the Issuer,  an  indemnity
bond must be supplied by the Holder that is  sufficient  in the  judgment of the
Trustee  and the Issuer to protect the Issuer,  the  Trustee,  any Agent and any
authenticating  agent  from any loss  that any of them may  suffer  if a Note is
replaced. The Issuer may charge for its expenses in replacing a Note.

         Every  replacement  Note is an additional  obligation of the Issuer and
shall  be  entitled  to  all of the  benefits  of  this  Indenture  equally  and
proportionately with all other Notes duly issued hereunder.

SECTION 2.08.  OUTSTANDING NOTES.

         The Notes  outstanding at any time are all the Notes  authenticated  by
the  Trustee  except  for  those  canceled  by  it,  those  delivered  to it for
cancellation,  those reductions in the interest in a Global Note effected by the
Trustee in accordance  with the provisions  hereof,  and those described in this
Section as not  outstanding.  Except as set forth in Section 2.09 hereof, a Note
does not cease to be  outstanding  because  the  Issuer or an  Affiliate  of the
Issuer holds the Note; however,  Notes held by the Issuer or a Subsidiary of the
Issuer shall not be deemed to be  outstanding  for  purposes of Section  3.07(b)
hereof.

         If a Note is replaced  pursuant to Section 2.07 hereof, it ceases to be
outstanding  unless  the  Trustee  receives  proof  satisfactory  to it that the
replaced Note is held by a bona fide purchaser.

                                       30
<PAGE>

         If the principal  amount of any Note is  considered  paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

         If the Paying Agent (other than the Issuer,  a Subsidiary of the Issuer
or an Affiliate of any thereof)  holds,  on a redemption  date or maturity date,
money  sufficient to pay Notes payable on that date, then on and after that date
such Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.

SECTION 2.09.  TREASURY NOTES.

         In determining  whether the Holders of the required principal amount of
Notes have  concurred in any  direction,  waiver or consent,  Notes owned by the
Issuer, or by any Person directly or indirectly  controlling or controlled by or
under direct or indirect common control with the Issuer,  shall be considered as
though not outstanding,  except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction,  waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.

SECTION 2.10.  TEMPORARY NOTES.

         Until  certificates  representing  Notes are ready  for  delivery,  the
Issuer may prepare and the  Trustee,  upon receipt of an  Authentication  Order,
shall  authenticate  temporary Notes.  Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Issuer considers
appropriate  for temporary  Notes and as shall be  reasonably  acceptable to the
Trustee.  Without  unreasonable  delay, the Issuer shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.

         Holders of temporary  Notes shall be entitled to all of the benefits of
this Indenture.

SECTION 2.11.  CANCELLATION.

         The  Issuer  at  any  time  may  deliver   Notes  to  the  Trustee  for
cancellation.  The  Registrar  and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes  surrendered for  registration of
transfer,  exchange,  payment,  replacement  or  cancellation  and shall destroy
canceled  Notes  (subject to the record  retention  requirement  of the Exchange
Act).  Certification of the destruction of all canceled Notes shall be delivered
to the Issuer.  The Issuer may not issue new Notes to replace  Notes that it has
paid or that have been delivered to the Trustee for cancellation.

SECTION 2.12.  DEFAULTED INTEREST.

         If the Issuer  defaults in a payment of interest on the Notes, it shall
pay the  defaulted  interest in any lawful  manner plus,  to the extent  lawful,
interest payable on the defaulted interest,  to the Persons who are Holders on a
subsequent  special  record date, in each case at the rate provided in the Notes
and in Section  4.01  hereof.  The Issuer shall notify the Trustee in writing of
the amount of defaulted  interest  proposed to be paid on each Note and the date
of the  proposed  payment.  The Issuer  shall fix or cause to be fixed each such
special record date and payment date;  PROVIDED that no such special record date
shall be less than 10 days prior to the related  payment date for such defaulted
interest.  At least 15 days before the special record date, the Issuer (or, upon
the written request of the Issuer, the Trustee in the name and at the expense of
the Issuer) shall mail or cause to be mailed to Holders a notice that states the
special record date, the related payment date and the amount of such interest to
be paid.

                                       31
<PAGE>

SECTION 2.13.   CUSIP NUMBERS.

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

SECTION 2.14.   RECORD DATE.

         The record date for purposes of determining  the identity of Holders of
Notes entitled to vote or consent to any action by vote or consent authorized or
permitted  under this  Indenture  shall be determined as provided for in TIA ss.
316(c).

                                   ARTICLE 3.
                            REDEMPTION AND PREPAYMENT

SECTION 3.01.  NOTICES TO TRUSTEE.

         If  the  Issuer  elects  to  redeem  Notes  pursuant  to  the  optional
redemption  provisions of Section 3.07 hereof,  it shall furnish to the Trustee,
at least  30 days  but not  more  than 60 days  before  a  redemption  date,  an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur,  (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.

SECTION 3.02.  SELECTION OF NOTES TO BE REDEEMED.

         If less than all of the Notes are to be  redeemed  or  purchased  in an
offer to purchase at any time, the Trustee shall select the Notes to be redeemed
or purchased among the Holders of the Notes in compliance with the  requirements
of the principal national  securities  exchange,  if any, on which the Notes are
listed or, if the Notes are not so  listed,  on a PRO RATA  basis,  by lot or in
accordance with any other method the Trustee considers fair and appropriate.  In
the event of partial  redemption  by lot,  the  particular  Notes to be redeemed
shall be selected,  unless otherwise  provided herein, not less than 30 nor more
than 60 days prior to the  redemption  date by the Trustee from the  outstanding
Notes not previously called for redemption.

         The Trustee  shall  promptly  notify the Issuer in writing of the Notes
selected  for  redemption  and,  in the case of any Note  selected  for  partial
redemption,  the principal amount thereof to be redeemed.  Notes and portions of
Notes  selected  shall be in  amounts  of $1,000 or whole  multiples  of $1,000;
except  that if all of the  Notes of a Holder  are to be  redeemed,  the  entire
outstanding  amount of Notes  held by such  Holder,  even if not a  multiple  of
$1,000,  shall be  redeemed.  Except  as  provided  in the  preceding  sentence,
provisions  of this  Indenture  that apply to Notes called for  redemption  also
apply to portions of Notes called for redemption.

SECTION 3.03.  NOTICE OF REDEMPTION.

         Subject to the provisions of Section 3.09 hereof,  at least 30 days but
not more than 60 days before a redemption  date,  the Issuer shall mail or cause
to be mailed,  by first class mail, a notice of  redemption to each Holder whose
Notes are to be redeemed at its registered address.

                                       32
<PAGE>

         The notice shall identify the Notes to be redeemed and shall state:

         (a) the redemption date;

         (b) the redemption price;

         (c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be  redeemed  and that,  after the  redemption  date upon
surrender  of such Note,  a new Note or Notes in  principal  amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;

         (d) the name and address of the Paying Agent;

         (e) that Notes called for redemption  must be surrendered to the Paying
Agent to collect the redemption price;

         (f) that, unless the Issuer defaults in making such redemption payment,
interest and Liquidated  Damages,  if any, on Notes called for redemption ceases
to accrue on and after the redemption date;

         (g) the  paragraph  of the  Notes  and/or  Section  of  this  Indenture
pursuant to which the Notes called for redemption are being redeemed; and

         (h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.

         At  the  Issuer's  request,  the  Trustee  shall  give  the  notice  of
redemption in the Issuer's name and at its expense; PROVIDED,  HOWEVER, that the
Issuer  shall  have  delivered  to the  Trustee,  at least 45 days  prior to the
redemption date, an Officers' Certificate  requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.

SECTION 3.04.  EFFECT OF NOTICE OF REDEMPTION.

         Once notice of  redemption  is mailed in  accordance  with Section 3.03
hereof,  Notes called for redemption  become  irrevocably due and payable on the
redemption  date at the  redemption  price.  A notice of  redemption  may not be
conditional.

SECTION 3.05.     DEPOSIT OF REDEMPTION PRICE.

         One Business Day prior to the redemption date, the Issuer shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest and Liquidated Damages, if any, on all Notes to be
redeemed on that date. The Trustee or the Paying Agent shall promptly  return to
the  Issuer any money  deposited  with the  Trustee  or the Paying  Agent by the
Issuer in excess of the amounts  necessary to pay the  redemption  price of, and
accrued interest and Liquidated Damages, if any, on, all Notes to be redeemed.

         If the Issuer complies with the provisions of the preceding  paragraph,
on and after the redemption date, interest and Liquidated Damages, if any, shall
cease to accrue on the Notes or the portions of Notes called for redemption.  If
a Note is redeemed  on or after an  interest  record date but on or prior to the
related  interest  payment  date,  then any  accrued  and  unpaid  interest  and
Liquidated  Damages, if any, shall be paid to the Person in whose name such Note
was  registered at the close of business on such record date. If any Note called
for redemption shall not be so paid upon surrender for redemption because of the

                                       33
<PAGE>

failure of the Issuer to comply with the preceding paragraph,  interest shall be
paid on the unpaid  principal,  from the redemption date until such principal is
paid,  and to the  extent  lawful  on any  interest  not  paid  on  such  unpaid
principal,  in each case at the rate  provided in the Notes and in Section  4.01
hereof.

SECTION 3.06.  NOTES REDEEMED IN PART.

         Upon  surrender  of a Note that is redeemed in part,  the Issuer  shall
issue  and,  upon  receipt  of  an  Authentication   Order,  the  Trustee  shall
authenticate  for the  Holder at the  expense  of the Issuer a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.

SECTION 3.07.  OPTIONAL REDEMPTION.

         (a) Except as set forth in clause (b) of this Section 3.07,  the Issuer
shall not have the  option to redeem the Notes  pursuant  to this  Section  3.07
prior to December 15, 2005.  Thereafter,  the Issuer may redeem all or a part of
the notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices  (expressed  as  percentages  of  principal  amount) set forth below plus
accrued  and  unpaid  interest  and  Liquidated  Damages,  if any,  on the notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on December 15 of the years indicated below:

        YEAR                                                       PERCENTAGE
        ----                                                       ----------
        2005..................................................      105.313%
        2006..................................................      103.542%
        2007..................................................      101.771%
        2008 and thereafter...................................      100.000%

         (b)  Notwithstanding the provisions of clause (a) of this Section 3.07,
at any time  prior to  December  15,  2004,  the  Issuer  may on any one or more
occasions redeem up to 35% of the aggregate principal amount of notes originally
issued under this  Indenture at a redemption  price of 110.625% of the principal
amount,  plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption  date,  with the net cash  proceeds of one or more Equity  Offerings;
PROVIDED  that:  (1) at least  65% of the  aggregate  principal  amount of notes
originally issued under this Indenture remains outstanding immediately after the
occurrence of such redemption (excluding notes held by the Issuer and Affiliates
of the Issuer);  and (2) notice of the redemption is given within 30 days of the
date of the closing of such Equity Offering.

         (c) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Section 3.01 through 3.06 hereof.

SECTION 3.08.  MANDATORY REDEMPTION.

         The  Issuer  shall not be  required  to make  mandatory  redemption  or
sinking fund payments with respect to the Notes.

SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.

         In the event that, pursuant to Section 4.10 hereof, the Issuer shall be
required to  commence an offer to all Holders to purchase  Notes (an "ASSET SALE
OFFER"), it shall follow the procedures specified below.

         The Asset Sale Offer shall remain open for a period of 20 Business Days
following  its  commencement  and no longer,  except to the extent that a longer
period is required by applicable  law (the

                                       34
<PAGE>

"OFFER  PERIOD").  No later than five Business Days after the termination of the
Offer Period (the  "PURCHASE  DATE"),  the Issuer shall  purchase the  principal
amount of Notes  required to be  purchased  pursuant to Section 4.10 hereof (the
"OFFER  AMOUNT") or, if less than the Offer Amount has been tendered,  all Notes
tendered in response to the Asset Sale Offer. Payment for any Notes so purchased
shall be made in the same manner as interest payments are made.

         If the Purchase  Date is on or after an interest  record date and on or
before the related  interest payment date, any accrued and unpaid interest shall
be paid to the  Person  in  whose  name a Note is  registered  at the  close  of
business on such record date,  and no  additional  interest  shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.

         Upon the commencement of an Asset Sale Offer, the Issuer shall send, by
first class mail, a notice to the Trustee and each of the  Holders,  with a copy
to the  Trustee.  The  notice  shall  contain  all  instructions  and  materials
necessary  to enable  such  Holders to tender  Notes  pursuant to the Asset Sale
Offer.  The Asset Sale Offer shall be made to all  Holders.  The  notice,  which
shall govern the terms of the Asset Sale Offer, shall state:

         (a) that the Asset Sale Offer is being made  pursuant  to this  Section
3.09 and  Section  4.10 hereof and the length of time the Asset Sale Offer shall
remain open;

         (b) the Offer Amount, the purchase price and the Purchase Date;

         (c) that any Note not tendered or accepted for payment  shall  continue
to accrue interest;

         (d) that,  unless the Issuer defaults in making such payment,  any Note
accepted  for  payment  pursuant  to the Asset Sale Offer  shall cease to accrue
interest and Liquidated Damages, if any, after the Purchase Date;

         (e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may elect to have Notes  purchased  in integral  multiples  of $1,000
only;

         (f) that  Holders  electing  to have a Note  purchased  pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect  Purchase" on the reverse of the Note  completed,  or
transfer by book-entry  transfer,  to the Issuer, a depositary,  if appointed by
the Issuer,  or a Paying  Agent at the address  specified in the notice at least
three days before the Purchase Date;

         (g) that Holders  shall be entitled to withdraw  their  election if the
Issuer,  the depositary or the Paying Agent, as the case may be,  receives,  not
later  than  the  expiration  of  the  Offer  Period,   a  telegram,   facsimile
transmission  or letter  setting  forth the name of the  Holder,  the  principal
amount of the Note the Holder  delivered for purchase and a statement  that such
Holder is withdrawing his election to have such Note purchased;

         (h) that, if the aggregate  principal  amount of Notes  surrendered  by
Holders  exceeds  the Offer  Amount,  the  Issuer  shall  select the Notes to be
purchased  on a  PRO  RATA  basis  (with  such  adjustments  as  may  be  deemed
appropriate  by the Issuer so that only  Notes in  denominations  of $1,000,  or
integral multiples thereof, shall be purchased); and

         (i) that  Holders  whose  Notes  were  purchased  only in part shall be
issued new Notes equal in  principal  amount to the  unpurchased  portion of the
Notes surrendered (or transferred by book-entry transfer).

                                       35
<PAGE>

         On or before the Purchase Date, the Issuer shall, to the extent lawful,
accept  for  payment,  on a PRO RATA basis to the  extent  necessary,  the Offer
Amount of Notes or portions thereof  tendered  pursuant to the Asset Sale Offer,
or if less than the Offer  Amount has been  tendered,  all Notes  tendered,  and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions  thereof were accepted for payment by the Issuer in accordance with the
terms of this Section 3.09. The Issuer,  the Depositary or the Paying Agent,  as
the case may be, shall  promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each  tendering  Holder an amount equal to
the  purchase  price of the Notes  tendered by such  Holder and  accepted by the
Issuer for purchase,  and the Issuer shall  promptly  issue a new Note,  and the
Trustee,  upon written  request from the Issuer shall  authenticate  and mail or
deliver  such  new  Note to such  Holder,  in a  principal  amount  equal to any
unpurchased  portion of the Note surrendered.  Any Note not so accepted shall be
promptly  mailed or  delivered by the Issuer to the Holder  thereof.  The Issuer
shall  publicly  announce  the  results of the Asset Sale Offer on the  Purchase
Date.

         Other than as specifically  provided in this Section 3.09, any purchase
pursuant  to this  Section  3.09 shall be made  pursuant  to the  provisions  of
Sections 3.01 through 3.06 hereof.

                                   ARTICLE 4.
                                   COVENANTS

SECTION 4.01. PAYMENT OF NOTES.

         The Issuer shall pay or cause to be paid the principal of, premium,  if
any, interest and Liquidated  Damages,  if any, on the Notes on the dates and in
the manner  provided in the Notes.  Principal,  premium,  if any,  interest  and
Liquidated  Damages,  if any,  shall be  considered  paid on the date due if the
Paying Agent,  if other than the Issuer or any of its  Subsidiaries  holds as of
10:00  a.m.  Eastern  Time on the due date  money  deposited  by the  Issuer  in
immediately  available  funds  and  designated  for  and  sufficient  to pay all
principal,  premium,  if any,  and  interest  then due. The Issuer shall pay all
Liquidated  Damages,  if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.

         The Issuer shall pay interest (including  post-petition interest in any
proceeding  under any Bankruptcy Law) on overdue  principal at the rate equal to
1% per annum in excess of the then applicable  interest rate on the Notes to the
extent lawful; it shall pay interest  (including  post-petition  interest in any
proceeding  under any Bankruptcy  Law) on overdue  installments  of interest and
Liquidated  Damages  (without regard to any applicable grace period) at the same
rate to the extent lawful.

SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.

         The Issuer shall  maintain an office or agency  (which may be an office
of the Trustee or an affiliate of the Trustee,  Registrar or co-registrar) where
Notes may be surrendered for  registration of transfer or for exchange and where
notices  and  demands  to or upon the  Issuer in  respect  of the Notes and this
Indenture  may be served.  The Issuer  shall 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 Issuer  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.

         The  Issuer  may also from  time to time  designate  one or more  other
offices or agencies where the Notes may be presented or  surrendered  for any or
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
Issuer of its obligation to maintain an office or agency for such purposes.  The
Issuer shall give

                                       36
<PAGE>

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.

         The Issuer hereby  designates the Corporate Trust Office of the Trustee
as one such office or agency of the Issuer in accordance with Section 2.03.

SECTION 4.03. REPORTS.

         (a)  Whether  or not  required  by the SEC,  so long as any  Notes  are
outstanding,  the Issuer shall furnish to the Holders of Notes,  within the time
periods  specified in the SEC's rules and  regulations:  (1) all  quarterly  and
annual financial  information that would be required to be contained in a filing
with the SEC on Forms 10-Q and 10-K if the  Issuer  were  required  to file such
forms, including a "Management's  Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual  information  only, a
report on the annual financial statements by the Issuer's certified  independent
accountants; and (2) all current reports that would be required to be filed with
the SEC on Form 8-K if the  Issuer  were  required  to file  such  reports.  The
quarterly and annual financial  information  required by the preceding  sentence
shall  include a  reasonably  detailed  presentation,  either on the face of the
financial statements or in the footnotes thereto, and in Management's Discussion
and Analysis of Financial Condition and Results of Operations,  of the financial
condition and results of  operations  of the Issuer and the Issuer's  Restricted
Subsidiaries  separate from the financial condition and results of operations of
the Issuer's Unrestricted Subsidiaries.  In addition, following the consummation
of the Exchange Offer contemplated by the Registration Rights Agreement, whether
or  not  required  by the  SEC,  the  Issuer  shall  file  a copy  of all of the
information  and  reports  referred to in clauses (1) and (2) above with the SEC
for public availability within the time periods specified in the SEC's rules and
regulations  (unless  the SEC will  not  accept  such a  filing)  and make  such
information  available to securities  analysts and  prospective  investors  upon
request.  In  addition,  the Issuer has  agreed  that,  for so long as any Notes
remain  outstanding,  the Issuer shall  furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

         (b) For so long as the Issuer is a  subsidiary  of ISP, if permitted by
applicable  law, the foregoing  requirements  shall be deemed to be satisfied if
ISP delivers the reports and other information required thereby.

SECTION 4.04. COMPLIANCE CERTIFICATE.

         (a) The Issuer shall  deliver to the Trustee,  within 90 days after the
end of each fiscal year, an Officers'  Certificate  stating that a review of the
activities of the Issuer and its  Subsidiaries  during the preceding fiscal year
has been made  under the  supervision  of the  signing  Officers  with a view to
determining whether the Issuer has kept,  observed,  performed and fulfilled its
obligations under this Indenture,  and further stating,  as to each such Officer
signing such  certificate,  that to the best of his or her  knowledge the Issuer
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the  performance or observance of any of
the terms,  provisions  and  conditions of this  Indenture  (or, if a Default or
Event of Default shall have occurred,  describing all such Defaults or Events of
Default  of which he or she may have  knowledge  and what  action  the Issuer is
taking or proposes to take with respect  thereto) and that to the best of his or
her  knowledge no event has occurred and remains in existence by reason of which
payments on account of the  principal  of or  interest,  if any, on the Notes is
prohibited  or if such event has occurred,  a description  of the event and what
action the Issuer is taking or proposes to take with respect thereto.

                                       37
<PAGE>

         (b) So long as not contrary to the then current  recommendations of the
American  Institute  of Certified  Public  Accountants,  the year-end  financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Issuer's independent public accountants (who shall be a
firm  of  established  national  reputation)  that  in  making  the  examination
necessary for  certification of such financial  statements,  nothing has come to
their attention that would lead them to believe that the Issuer has violated any
provisions  of  Article 4 or  Article 5 hereof  or,  if any such  violation  has
occurred,  specifying  the  nature  and period of  existence  thereof,  it being
understood that such  accountants  shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.

         (c) The  Issuer  shall,  so long as any of the Notes  are  outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers'  Certificate  specifying such Default or Event
of Default and what action the Issuer is taking or proposes to take with respect
thereto.

SECTION 4.05. TAXES.

         The Issuer shall pay, and shall cause each of its  Subsidiaries to pay,
prior to delinquency,  all material taxes, assessments,  and governmental levies
except such as are  contested in good faith and by  appropriate  proceedings  or
where the failure to effect such payment is not adverse in any material  respect
to the Holders of the Notes.

SECTION 4.06. STAY, EXTENSION AND USURY LAWS.

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

SECTION 4.07. RESTRICTED PAYMENTS.

         The  Issuer  shall  not,  and shall not  permit  any of its  Restricted
Subsidiaries to, directly or indirectly: (1) declare or pay any dividend or make
any other  payment or  distribution  on account  of any of the  Issuer's  Equity
Interests or any of its Restricted  Subsidiaries'  Equity Interests  (including,
without  limitation,  any payment in connection with any merger or consolidation
involving the Issuer or any of its Restricted  Subsidiaries) or to the direct or
indirect  holders of any of the Issuer's Equity Interests or any of the Issuer's
Restricted  Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions  payable in the Issuer's Equity Interests (other than
Disqualified  Stock) or dividends or distributions  payable to the Issuer or one
of its Restricted  Subsidiaries);  (2) purchase,  redeem or otherwise acquire or
retire for value (including,  without limitation,  in connection with any merger
or  consolidation  involving the Issuer) any of the Issuer's Equity Interests or
any Equity  Interests of the Issuer's  direct or indirect  parent;  (3) make any
payment on or with respect to, or purchase, redeem, defease or otherwise acquire
or retire for value any Indebtedness that is subordinated to the Notes, except a
payment of interest or principal at the Stated Maturity thereof; or (4) make any
Restricted  Investment  (all such  payments and other actions set forth in these
clauses  (1) through (4) above  being  collectively  referred to as  "Restricted
Payments"),  unless,  at the time of and after giving effect to such  Restricted
Payment:  (a) no  Default  or  Event  of  Default  shall  have  occurred  and be
continuing or would occur as a consequence thereof; and (b) the Issuer would, at
the time of such Restricted Payment and after giving pro forma effect thereto as
if
                                       38
<PAGE>

such  Restricted  Payment  had  been  made at the  beginning  of the  applicable
four-quarter  period,  have been permitted to incur at least $1.00 of additional
Indebtedness  pursuant to the Fixed Charge  Coverage Ratio test set forth in the
first paragraph of Section 4.09; and (c) such Restricted Payment,  together with
the aggregate amount of all other Restricted Payments made by the Issuer and its
Restricted  Subsidiaries after the Closing Date (excluding  Restricted  Payments
permitted  by clauses (2),  (3),  (4),  (5), (6) and (7) of the next  succeeding
paragraph), is less than the sum, without duplication, of:

         (i) 50% of the Issuer's  Consolidated  Net Income for the period (taken
as one accounting  period)  beginning January 1, 2002 to the end of the Issuer's
most recently ended fiscal quarter for which internal  financial  statements are
available at the time of such Restricted  Payment (or, if such  Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus

         (ii) 100% of the  aggregate  proceeds  received by the Issuer since the
Closing Date as a  contribution  to common  equity  capital or from the issue or
sale of the Issuer's Equity  Interests (other than  Disqualified  Stock) or from
the issue or sale of the Issuer's convertible or exchangeable Disqualified Stock
or the Issuer's convertible or exchangeable debt securities that have, in either
case,  been  converted into or exchanged for such Equity  Interests  (other than
Equity Interests (or  Disqualified  Stock or debt securities) sold to one of the
Issuer's Subsidiaries), plus

         (iii) to the extent that any Restricted  Investment that was made after
the Closing  Date is sold for cash or otherwise  liquidated  or repaid for cash,
the cash return of capital with respect to such Restricted  Investment (less the
cost of disposition, if any); plus

         (iv)  $50.0 million.

         So  long  as no  Default  or  Event  of  Default  has  occurred  and is
continuing  or  would be  caused  thereby,  the  preceding  provisions  will not
prohibit:  (1) the  payment  of any  dividend  within 60 days  after the date of
declaration of the dividend,  if at the date of declaration the dividend payment
would have complied with the provisions of this  Indenture;  (2) the redemption,
repurchase,  retirement,  defeasance or other acquisition of any of the Issuer's
subordinated  Indebtedness or of any of its Equity Interests, or any dividend or
other  distribution in respect thereof,  in exchange for Equity Interests (other
than Disqualified Stock) of, or in an amount equal to the net cash proceeds of a
sale (other than to one of the Issuer's Restricted Subsidiaries) of the Issuer's
Equity Interests (other than  Disqualified  Stock) or a capital  contribution to
the equity of the Issuer in the 30-day period prior  thereto;  provided that the
amount of any such net cash proceeds that are utilized for any such  redemption,
repurchase,  retirement,  defeasance or other  acquisition will be excluded from
clause (4)(c)(ii) of the preceding  paragraph;  (3) the defeasance,  redemption,
repurchase or other acquisition or retirement of subordinated  Indebtedness with
the net cash proceeds from an incurrence of Permitted Refinancing  Indebtedness;
(4) the payment of any dividend by any of the Issuer's  Restricted  Subsidiaries
to the holders of its Equity  Interests on a pro rata basis; (5) the repurchase,
redemption or other  acquisition  or retirement for value of any of the Issuer's
Equity  Interests  or any Equity  Interests  of any of the  Issuer's  Restricted
Subsidiaries  or any direct or indirect parent company of the Issuer held by any
member of the Issuer's management pursuant to any management equity subscription
agreement,  stock  option  agreement  or similar  agreement;  provided  that the
aggregate  price paid for all such  repurchased,  redeemed,  acquired or retired
Equity Interests shall not exceed $3.0 million in any twelve-month  period;  (6)
any Restricted Payment for the purpose of defeasing, redeeming,  repurchasing or
otherwise  acquiring  or retiring the 2003 Notes and any  Restricted  Payment as
contemplated  to be made to ISP with the proceeds of the issuance of the Initial
Notes; and (7) payments  required by the Tax Sharing  Agreements as in effect on
the Closing Date,  and  amendments  thereto that do not adversely  affect in any
material  respect  the  Issuer,  the  Issuer's  Restricted  Subsidiaries  or the
Holders.

                                       39
<PAGE>

         The amount of all  Restricted  Payments  (other  than cash) will be the
fair  market  value on the date of the  Restricted  Payment of the  asset(s)  or
securities proposed to be transferred or issued by the Issuer or such Restricted
Subsidiary,  as the case may be,  pursuant to the Restricted  Payment.  The fair
market value of any assets or securities  that are required to be valued by this
Section 4.07 will be determined by the Board of Directors whose  resolution with
respect  thereto  will be  delivered  to the  Trustee.  The Board of  Directors'
determination  must  be  based  upon  an  opinion  or  appraisal  issued  by  an
accounting,  appraisal or  investment  banking firm of national  standing if the
fair market value exceeds $10.0 million.

SECTION 4.08.  DIVIDEND  AND  OTHER PAYMENT  RESTRICTIONS  AFFECTING  RESTRICTED
SUBSIDIARIES.

         The  Issuer  shall  not,  and shall not  permit  any of its  Restricted
Subsidiaries  to,  directly or  indirectly,  create or permit to exist or become
effective  any  consensual  encumbrance  or  restriction  on the  ability of any
Restricted Subsidiary to:

              (1) pay dividends or make any other  distributions  on its Capital
         Stock to the Issuer or any of the Issuer's Restricted Subsidiaries,  or
         with respect to any other interest or participation in, or measured by,
         its profits,  or pay any indebtedness  owed to the Issuer or any of its
         Restricted Subsidiaries;

              (2) make loans or advances to the Issuer or any of its  Restricted
         Subsidiaries; or

              (3) transfer any of its  properties or assets to the Issuer or any
         of its Restricted Subsidiaries.

         However,  the preceding  restrictions will not apply to encumbrances or
restrictions existing under or by reason of:

                    (i)  agreements  governing  Existing  Indebtedness  and  the
         Credit  Agreement,  in each case as in effect on the Closing Date;  and
         any  amendments,  modifications,   restatements,  renewals,  increases,
         supplements,   refundings,   replacements   or  refinancings  of  those
         agreements; provided that the amendments, modifications,  restatements,
         renewals,   increases,   supplements,    refundings,   replacement   or
         refinancings are no more restrictive, taken as a whole, with respect to
         such dividend and other payment  restrictions  than those  contained in
         those agreements on the Closing Date;

                    (ii) this Indenture, the Notes and the Exchange Notes;

                    (iii) applicable law;

                    (iv) any instrument governing  Indebtedness or Capital Stock
         of  a  Person   acquired  by  the  Issuer  or  any  of  its  Restricted
         Subsidiaries  as in effect at the time of such  acquisition  (except to
         the  extent  such   Indebtedness  or  Capital  Stock  was  incurred  in
         connection  with  or  in  contemplation  of  such  acquisition),  which
         encumbrance or  restriction  is not applicable to any other Person,  or
         the  properties  or assets of any other Person;  provided  that, in the
         case of Indebtedness,  such  Indebtedness was permitted by the terms of
         this Indenture to be incurred;

                    (v) customary  non-assignment  provisions in leases  entered
         into in the  ordinary  course  of  business  and  consistent  with past
         practices;

                                       40
<PAGE>

                    (vi) purchase money obligations for property acquired in the
         ordinary  course of business that impose  restrictions on that property
         of the nature described in clause (3) of the preceding paragraph;

                    (vii) any agreement for the sale or other  disposition  of a
         Restricted  Subsidiary that restricts  distributions by that Restricted
         Subsidiary pending its sale or other disposition;

                    (viii) Permitted Refinancing Indebtedness; provided that the
         restrictions  contained  in the  agreements  governing  such  Permitted
         Refinancing  Indebtedness  are no more  restrictive,  taken as a whole,
         than those contained in the agreements governing the Indebtedness being
         refinanced;

                    (ix) Liens otherwise  permitted to be incurred under Section
         4.12 hereof that limit the right of the Issuer to dispose of the assets
         subject to such Liens;

                    (x)   provisions   with  respect  to  the   disposition   or
         distribution of assets or property in joint venture agreements,  assets
         sale  agreements,  stock sale  agreements and other similar  agreements
         entered into in the ordinary course of business;

                    (xi)  restrictions  on cash or other  deposits  or net worth
         imposed by  customers  under  contracts  entered  into in the  ordinary
         course of business;

                    (xii)  any  agreement  governing   Indebtedness  of  Foreign
         Subsidiaries permitted under Section 4.09 hereof; and

                    (xiii) any agreement governing  Indebtedness  incurred after
         the Closing Date permitted under Section 4.09 hereof; provided that the
         restrictions  contained  therein are, in the good faith judgment of the
         Board of Directors, not materially less favorable, taken as a whole, to
         the Holders  than those  contained  in  agreements  governing  Existing
         Indebtedness.

SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.

         The  Issuer  shall  not,  and shall not  permit  any of its  Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise  become directly or indirectly  liable,  contingently or otherwise,
with respect to  (collectively,  "incur") any Indebtedness  (including  Acquired
Debt),  and shall not permit  any of its  Restricted  Subsidiaries  to issue any
shares of  preferred  stock,  unless  the Fixed  Charge  Coverage  Ratio for the
Issuer's  most  recently  ended four full  fiscal  quarters  for which  internal
financial statements are available  immediately preceding the date on which such
additional Indebtedness is incurred or such preferred stock is issued would have
been at least 1.75 to 1, determined on a pro forma basis  (including a pro forma
application of the net proceeds  therefrom),  as if the additional  Indebtedness
had been incurred or the preferred stock had been issued, as the case may be, at
the beginning of such four-quarter period.

         The  first  paragraph  of this  Section  4.09  shall not  prohibit  the
incurrence  of any  of  the  following  Indebtedness  (collectively,  "Permitted
Debt"):

         (1) the incurrence of Indebtedness (a) under the Credit Agreement (with
letters of credit being  deemed to have a principal  amount equal to the maximum
potential  liability  thereunder) or (b) pursuant to a Qualified  Securitization
Program;  provided  that  the  aggregate  amount  of all  Indebtedness  incurred
pursuant to this clause (1),  including all Permitted  Refinancing  Indebtedness
incurred  to  refund,  refinance  or  replace  any other  Indebtedness  incurred
pursuant  to this  clause (1),  does not exceed at any one time  outstanding  an
amount equal to $550.0 million,  less the aggregate amount applied by the Issuer

                                       41
<PAGE>

and its Restricted Subsidiaries to repay Indebtedness under the Credit Agreement
or a Qualified Securitization Program pursuant to Section 4.10 hereof;

         (2) the incurrence of Existing Indebtedness;

         (3) the  incurrence  of  Indebtedness  represented  by the  Notes to be
issued on the  Closing  Date and the  Exchange  Notes to be  issued  in  respect
thereof pursuant to the Registration Rights Agreement;

         (4)  the  incurrence  of  Indebtedness  represented  by  Capital  Lease
Obligations,  mortgage  financings or purchase money obligations,  in each case,
incurred for the purpose of financing  all or any part of the purchase  price or
cost of construction or improvement of property,  plant or equipment used in the
Issuer's  business  or  the  business  of  its  Restricted  Subsidiaries,  in an
aggregate  amount  at  any  one  time   outstanding,   including  all  Permitted
Refinancing   Indebtedness   incurred  to  refund,   refinance  or  replace  any
Indebtedness  incurred pursuant to this clause (4), not to exceed the greater of
(a) $35.0  million and (b) 10.0% of the Issuer's  Net Tangible  Assets as of the
date on which any such Indebtedness is incurred;

         (5) the incurrence of Permitted  Refinancing  Indebtedness  in exchange
for,  or the net  proceeds  of which are used to  refund,  refinance  or replace
Indebtedness  (other than intercompany  Indebtedness) that was permitted by this
Indenture to be incurred  under the first  paragraph of this covenant or clauses
(1), (2), (3), (4), (5), (11), (12) or (14) of this paragraph;

         (6) the  incurrence  of  Indebtedness  among the  Issuer and any of its
Restricted Subsidiaries, or among any of its Restricted Subsidiaries;  provided,
however,   that:  (a)  if  the  Issuer  is  an  obligor  with  respect  to  such
Indebtedness,  such Indebtedness is expressly  subordinated to the prior payment
in full in  cash of all  Obligations  with  respect  to the  Notes,  and (b) any
subsequent  issuance or transfer of Equity  Interests  that  results in any such
Indebtedness  being  held  by a  Person  other  than  the  Issuer  or one of its
Restricted Subsidiaries, and any sale or other transfer of any such Indebtedness
to a Person that is not either the Issuer or one of its Restricted Subsidiaries,
shall, in each case, be deemed to constitute an incurrence of such  Indebtedness
by the Issuer or such  Restricted  Subsidiary,  as the case may be, that was not
permitted by this clause (6);

         (7) the  incurrence  of Hedging  Obligations  that are incurred for the
purpose of fixing or hedging  interest  rate risk with  respect to any  floating
rate  Indebtedness  that is  permitted  by the  terms  of this  Indenture  to be
outstanding;

         (8) the guarantee by the Issuer or any of its  Restricted  Subsidiaries
of Indebtedness  that was permitted to be incurred by another  provision of this
Section 4.09;

         (9) the accrual of interest,  the accretion or amortization of original
issue  discount,  the  payment of interest  on any  Indebtedness  in the form of
additional  Indebtedness  with the same terms,  and the payment of  dividends on
Disqualified  Stock  in the  form of  additional  shares  of the  same  class of
Disqualified Stock;

         (10)  the   incurrence  by  the  Issuer's   Foreign   Subsidiaries   of
Indebtedness in an aggregate  amount at any time outstanding not to exceed $35.0
million;

         (11) the incurrence by Persons that become  Restricted  Subsidiaries of
Acquired Debt in an aggregate  principal  amount at the date of such  incurrence
not to  exceed  $50.0  million;  provided  that  (a) such  Acquired  Debt is not
incurred in connection with, or in contemplation of, such Person merging with or
into the Issuer or any of its other  Restricted  Subsidiaries  and (b) liability
for such  Acquired  Debt  shall  not  extend  to the  Issuer or any of its other
Restricted Subsidiaries, or any of their assets;

                                       42
<PAGE>

         (12) incurrence by the Issuer in respect of industrial revenue bonds or
other similar tax advantageous financings in an aggregate amount at any one time
outstanding  not to exceed  $50.0  million;  provided  that no more  than  $25.0
million of such  Indebtedness  shall relate to assets or properties owned by the
Issuer or any of its Restricted Subsidiaries on the Closing Date;

         (13) the incurrence of Indebtedness  arising from agreements  providing
for  indemnification,   adjustment  of  purchase  price,  earn  out  or  similar
obligations,   in  each  case,  incurred  or  assumed  in  connection  with  the
disposition  of any  business,  asset or  Subsidiary,  other than  guarantees of
Indebtedness   incurred  by  any  Person  acquiring  such  business,   asset  or
Subsidiary;  provided, however, that the maximum amount of all such Indebtedness
shall at no time exceed the gross  proceeds  actually  received by the Issuer or
its Restricted Subsidiaries in connection with such disposition;

         (14) the  incurrence  of  Indebtedness  permitted to be incurred by the
Issuer's  Subsidiaries in the 2011 Note Indenture as such agreement is in effect
on the Closing Date at a time when the fixed  charge  coverage  ratio  specified
therein had been met or exceeded; and

         (15)  the  incurrence  of  additional   Indebtedness  in  an  aggregate
principal  amount (or accreted value, as applicable) at any time outstanding not
to exceed $50.0 million.

         For purposes of determining  compliance  with this Section 4.09, in the
event that an item of proposed  Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (15) above,
or is entitled to be incurred  pursuant to the first  paragraph  of this Section
4.09, the Issuer will be permitted to classify such item of  Indebtedness on the
date of its incurrence in any manner that complies with this Section 4.09.

SECTION 4.10. ASSET SALES.

         The  Issuer  shall  not,  and shall not  permit  any of its  Restricted
Subsidiaries  to,  consummate  an  Asset  Sale  unless:  (i) the  Issuer  or the
Restricted Subsidiary, as the case may be, receives consideration at the time of
the Asset Sale at least equal to the fair  market  value of the assets or Equity
Interests issued or sold or otherwise disposed of; (ii) the fair market value is
determined  by the Issuer's  Board of Directors and evidenced by a resolution of
the Board of Directors  set forth in an Officers'  Certificate  delivered to the
Trustee; and (iii) at least 75% of the consideration  received in the Asset Sale
by the Issuer or such Restricted Subsidiary is in the form of cash. For purposes
of this  provision,  each of the  following  will be deemed to be cash:  (a) any
liabilities,  as shown on the  Issuer's  or such  Restricted  Subsidiary's  most
recent balance sheet,  of the Issuer or any  Restricted  Subsidiary  (other than
contingent  liabilities and liabilities that are by their terms  subordinated to
the  Notes)  that are  assumed by the  transferee  of any such  assets;  (b) any
securities,  notes or  other  obligations  received  by the  Issuer  or any such
Restricted Subsidiary from such transferee that are  contemporaneously,  subject
to ordinary settlement  periods,  converted or convertible by the Issuer or such
Restricted  Subsidiary  into cash,  to the extent of the cash  received  or that
would be received in that conversion;  and (c) long-term assets that are used or
useful in a Permitted Business.

         Within 18 months  after the receipt of any Net  Proceeds  from an Asset
Sale, the Issuer may apply those Net Proceeds,  at the Issuer's  option:  (1) to
repay  the  Issuer's  Indebtedness  and  Indebtedness  or any of its  Restricted
Subsidiaries  of any of its  Restricted  Subsidiaries  and, if the  Indebtedness
repaid is revolving credit Indebtedness,  to correspondingly  reduce commitments
with respect thereto;  PROVIDED,  HOWEVER, that if and to the extent that one of
the  Issuer's  Restricted  Subsidiaries  makes an offer to purchase or otherwise
redeem  outstanding   Indebtedness  pursuant  to  an  agreement  governing  such
Indebtedness that requires that such offer be made with such Net Proceeds,  then
such Restricted Subsidiary will be deemed for purposes of this provision to have
purchased or otherwise  redeemed such

                                       43
<PAGE>

outstanding  Indebtedness,  whether or not such offer is accepted by the holders
of such Indebtedness;  (2) to acquire all or substantially all of the assets of,
or a  majority  of the  Voting  Stock of, a  Permitted  Business;  (3) to make a
capital expenditure in a Permitted  Business;  or (4) to acquire other long-term
assets that are used or useful in a Permitted Business.

         Pending  the final  application  of any Net  Proceeds,  the  Issuer may
temporarily  reduce  revolving  credit  borrowings  or otherwise  invest the Net
Proceeds in any manner that is not prohibited by this Indenture.

         Any Net  Proceeds  from Asset Sales that are not applied or invested as
provided in the preceding paragraphs will constitute "Asset Sale Proceeds." When
the aggregate  amount of Asset Sale Proceeds exceeds the Threshold  Amount,  the
Issuer shall make an Asset Sale Offer to all Holders of Notes and all holders of
other  Indebtedness  that is pari  passu  with the Notes  containing  provisions
similar to those set forth in this  Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets to purchase the maximum principal
amount of Notes and such other pari passu Indebtedness that may be purchased out
of the excess of such Asset Sale Proceeds over the Threshold Amount (such excess
being referred to herein as the "EXCESS PROCEEDS");  PROVIDED, HOWEVER, that (i)
the  Issuer  shall  not be  obligated  to make an Asset  Sale  Offer  until  the
aggregate  amount of Excess Proceeds  exceeds $5.0 million and (ii) Net Proceeds
received by a Restricted Subsidiary that is subject to a contractual restriction
on its ability to dividend such Net Proceeds to the Issuer shall not  constitute
Excess  Proceeds  for so long as such  restriction  would either  prohibit  such
dividend  or reduce the amount of other  dividends  payable to the  Issuer.  The
offer  price in any Asset Sale Offer will be equal to 100% of  principal  amount
plus accrued and unpaid interest and Liquidated  Damages, if any, to the date of
purchase,  and will be payable  in cash.  If any Excess  Proceeds  remain  after
consummation  of an Asset Sale Offer,  we may use those Excess  Proceeds for any
purpose not otherwise  prohibited by the Indenture.  If the aggregate  principal
amount of Notes and other PARI PASSU Indebtedness  tendered into such Asset Sale
Offer exceeds the amount of Excess  Proceeds,  the Trustee will select the Notes
and such other PARI PASSU Indebtedness to be purchased on a pro rata basis. Upon
completion of each Asset Sale Offer, the aggregate amount of Asset Sale Proceeds
will be  reduced by the amount of Excess  Proceeds  relating  to such Asset Sale
Offer.

SECTION 4.11. TRANSACTIONS WITH AFFILIATES.

         The  Issuer  shall  not,  and shall not  permit  any of its  Restricted
Subsidiaries  to,  make any payment to, or sell,  lease,  transfer or  otherwise
dispose  of any of its  respective  properties  or assets  to, or  purchase  any
property  or  assets  from,  or  enter  into or make or amend  any  transaction,
contract, agreement,  understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each, an "Affiliate  Transaction"),  unless:  (1) the
Affiliate  Transaction  is on terms that are no less  favorable to the Issuer or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable  transaction by us or such  Restricted  Subsidiary  with an unrelated
Person;  and (2) the Issuer  delivers to the  Trustee:  (a) with  respect to any
Affiliate  Transaction  or series of related  Affiliate  Transactions  involving
aggregate consideration in excess of $10.0 million, a resolution of the Board of
Directors set forth in an Officers'  Certificate  certifying that such Affiliate
Transaction complies with this covenant and that such Affiliate  Transaction has
been approved by a majority of the members of the Board of Directors who have no
personal stake in the transaction and who are not Affiliates of any party (other
than  the  Issuer  and  its   Restricted   Subsidiaries)   to  the   transaction
("disinterested  members");  provided that if there are no disinterested members
of the Board of Directors, the Issuer shall deliver to the Trustee an opinion as
to the fairness to the Holders of such  Affiliate  Transaction  from a financial
point of view issued by an accounting,  appraisal or investment  banking firm of
national standing;  and (b) with respect to any Affiliate  Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess of
$30.0  million,  an opinion as to the fairness to the Holders of such  Affiliate
Transaction from a
                                       44
<PAGE>

financial point of view issued by an accounting, appraisal or investment banking
firm of national standing.

         The  following  items shall not be deemed to be Affiliate  Transactions
and,  therefore,  shall not be subject to the provisions of the prior paragraph:
(1) any  transaction  with the  Issuer's  employees  or  employees of any of its
Restricted  Subsidiaries,  including entering into compensation  plans,  entered
into in the ordinary  course of business and  consistent  with the Issuer's past
practice or the past practice of such Restricted  Subsidiary;  (2)  transactions
between or among the Issuer and its Restricted  Subsidiaries;  (3)  transactions
with a Person that is an Affiliate of the Issuer solely  because the Issuer owns
an Equity  Interest  in, or control,  such  Person;  (4)  payment of  reasonable
compensation   (including   stock   and   option   compensation)   and   expense
reimbursements  to  members  of the  Board of  Directors  who are not  otherwise
Affiliates of the Issuer; (5) sales of Equity Interests (other than Disqualified
Stock) to  Affiliates  of the  Issuer;  (6) sales of  inventory  to BMCA and its
Subsidiaries in the ordinary course of business;  (7)  transactions  pursuant to
the  Management  Agreement  as in effect on the  Closing  Date,  and  amendments
thereto that do not  adversely  affect in any material  respect the Issuer,  its
Restricted  Subsidiaries  or the  Holders;  (8) any  sale,  conveyance  or other
transfer of accounts receivable and other related assets customarily transferred
in an accounts receivable  securitization program in a Qualified  Securitization
Program;  and (9)  Restricted  Payments that are permitted by the  provisions of
this Indenture described above under Section 4.07 hereof.

SECTION 4.12. LIENS.

         The Issuer shall not, directly or indirectly,  create, incur, assume or
suffer to exist any Lien of any kind securing its Indebtedness, its Attributable
Debt or its trade payables on any asset now owned or hereafter acquired,  except
Permitted  Liens,  unless the Notes are  secured by a Lien on such  assets on an
equal and ratable basis.

SECTION 4.13. BUSINESS ACTIVITIES.

         The Issuer  shall not, and shall not permit any  Restricted  Subsidiary
to,  engage in any  business  other than  Permitted  Businesses,  except to such
extent  as would not be  material  to the  Issuer  and the  Issuer's  Restricted
Subsidiaries taken as a whole.

SECTION 4.14. CORPORATE EXISTENCE.

         Subject  to Article 5 hereof,  the Issuer  shall do or cause to be done
all  things  necessary  to  preserve  and keep in full  force and effect (i) its
corporate existence,  and the corporate,  partnership or other existence of each
of its Subsidiaries,  in accordance with the respective organizational documents
(as the same  may be  amended  from  time to  time)  of the  Issuer  or any such
Subsidiary and (ii) the rights (charter and statutory),  licenses and franchises
of the Issuer and its Subsidiaries; PROVIDED, HOWEVER, that the Issuer shall not
be required to preserve any such right, license or franchise,  or the corporate,
partnership  or other  existence  of any of its  Subsidiaries,  if the  Board of
Directors shall determine that the  preservation  thereof is no longer desirable
in the conduct of the  business of the Issuer and its  Subsidiaries,  taken as a
whole,  and the Issuer may convert or cause its  Subsidiaries to convert (either
by statute,  merger or similar means) from a corporation to a limited  liability
company,  or vice versa,  in each case if the loss or conversion  thereof is not
adverse in any material respect to the Holders of the Notes.

SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.

         (a) Upon the  occurrence of a Change of Control,  the Issuer shall make
an offer (a "CHANGE OF CONTROL  OFFER") to each Holder to repurchase  all or any
part (equal to $1,000 or an integral  multiple

                                       45
<PAGE>

thereof)  of each  Holder's  Notes  (other  than  Notes  previously  called  for
redemption) at a purchase price equal to 101% of the aggregate  principal amount
thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any,
on the Notes  repurchased,  to the date of  purchase  ( the  "CHANGE  OF CONTROL
PAYMENT"). Within 30 days following any Change of Control, the Issuer shall mail
a notice to each Holder  stating:  (1) that the Change of Control Offer is being
made pursuant to this Section 4.15 and that all Notes  tendered will be accepted
for payment;  (2) the purchase  price and the purchase  date,  which shall be no
earlier  than 30 days and no later  than 60  business  days  from the date  such
notice is mailed (the "CHANGE OF CONTROL PAYMENT  DATE");  (3) that any Note not
tendered will continue to accrue interest;  (4) that, unless the Issuer defaults
in the payment of the Change of Control Payment,  all Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest after the
Change of Control  Payment  Date;  (5) that  Holders  electing to have any Notes
purchased  pursuant to a Change of Control  Offer will be required to  surrender
the Notes,  with the form entitled  "Option of Holder to Elect  Purchase" on the
reverse of the Notes completed,  to the Paying Agent at the address specified in
the notice prior to the close of business on the third  Business  Day  preceding
the Change of  Control  Payment  Date;  (6) that  Holders  will be  entitled  to
withdraw their election if the Paying Agent  receives,  not later than the close
of business on the second  Business Day preceding the Change of Control  Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder,  the principal  amount of Notes  delivered  for  purchase,  and a
statement  that  such  Holder  is  withdrawing  his  election  to have the Notes
purchased;  and (7) that Holders  whose Notes are being  purchased  only in part
will be issued new Notes equal in principal amount to the unpurchased portion of
the Notes  surrendered,  which  unpurchased  portion  must be equal to $1,000 in
principal amount or an integral multiple  thereof.  The Issuer shall comply with
the  requirements of Rule 14e-1 under the Exchange Act and any other  securities
laws and  regulations  thereunder  to the extent such laws and  regulations  are
applicable in  connection  with the  repurchase  of Notes in  connection  with a
Change of Control.

         (b) On the Change of Control  Payment Date,  the Issuer  shall,  to the
extent  lawful,  (1) accept for payment all Notes or portions  thereof  properly
tendered  pursuant to the Change of Control  Offer,  (2) deposit with the Paying
Agent an amount  equal to the Change of Control  Payment in respect of all Notes
or portions thereof  properly  tendered and (3) deliver or cause to be delivered
to  the  Trustee  the  Notes  properly   accepted  together  with  an  Officers'
Certificate  stating the aggregate principal amount of Notes or portions thereof
being  purchased  by the Issuer.  The Paying Agent shall  promptly  mail to each
Holder of Notes properly  tendered the Change of Control Payment for such Notes,
and the Trustee shall promptly authenticate and mail (or cause to be transferred
by book  entry)  to each  Holder a new Note  equal in  principal  amount  to any
unpurchased  portion of the Notes  surrendered,  if any;  PROVIDED that each new
Note will be in a principal amount of $1,000 or an integral multiple of $1,000.

         (c) Prior to complying with any of the provisions of this Section 4.15,
but in any event within 90 days following a Change of Control,  the Issuer shall
either repay all outstanding  Senior Debt or obtain the requisite  consents,  if
any,  under all  agreements  governing  outstanding  Senior  Debt to permit  the
repurchase  of Notes  required by this Section 4.15.  The Issuer shall  publicly
announce the result of the Change of Control Offer on or as soon as  practicable
after the Change of Control Payment Date.

         (d) Notwithstanding  anything to the contrary in this Section 4.15, the
Issuer shall not be required to make a Change of Control  Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times  and  otherwise  in  compliance  with the  requirements  set forth in this
Section 4.15 and Section 3.09 hereof and all other  provisions of this Indenture
applicable  to a Change of Control  Offer made by the Issuer and  purchases  all
Notes validly tendered and not withdrawn under such Change of Control Offer.

                                       46
<PAGE>

SECTION 4.16. PAYMENTS FOR CONSENT.

         The  Issuer  shall  not,  and shall not  permit  any of its  Restricted
Subsidiaries  to,  directly  or  indirectly,   pay  or  cause  to  be  paid  any
consideration  to or  for  the  benefit  of any  Holder  of  Notes  for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such  consideration  is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.

SECTION 4.17. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.

         The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted  Subsidiary  if that  designation  would not cause a Default.  If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value at the time of the designation of all outstanding  Investments
owned by the Issuer and its Restricted  Subsidiaries in the Subsidiary  properly
designated  shall  be  deemed  to be an  Investment  made as of the  time of the
designation and will reduce the amount  available for Restricted  Payments under
the first paragraph of Section 4.07 or Permitted  Investments,  as determined by
the Issuer.  That designation shall only be permitted if the Investment would be
permitted  at that time and if the  Restricted  Subsidiary  otherwise  meets the
definition of an Unrestricted Subsidiary. The Board of Directors may redesignate
any Unrestricted  Subsidiary to be a Restricted  Subsidiary if the redesignation
would not cause a Default.

SECTION 4.18. CHANGES IN COVENANTS WHEN NOTES RATED INVESTMENT GRADE.

         Following  the first date upon  which,  but only for so long as (1) the
Notes are rated Baa3 or better by Moody's Investors  Services,  Inc. and BBB- or
better by Standard & Poor's Ratings Services (or, in either case, if such Person
ceases to rate the Notes for reasons  outside of the control of the Issuer,  the
equivalent investment grade credit rating from any other "nationally  recognized
statistical rating organization" (within the meaning of Rule 15c3-1 (c) (2) (vi)
(F) under the Exchange Act) selected by the Issuer as a replacement agency); (2)
neither Moody's Investors Services,  Inc. nor Standard & Poor's Ratings Services
has  attached  any  "negative  outlook" to such rating of the Notes;  and (3) no
Default or Event of Default has occurred and is continuing, the covenants listed
under Sections 4.07,  4.08,  4.09,  4.10, 4.11, 4.13 and 4.17 shall no longer be
applicable to the Notes, all Unrestricted  Subsidiaries  shall become Restricted
Subsidiaries,  and any then-existing  Indebtedness of Unrestricted  Subsidiaries
shall constitute Existing Indebtedness.

SECTION 4.19. ESCROW ACCOUNT.

         On the  Closing  Date,  the  Issuer  shall  place a portion  of the net
proceeds of the offering of the Initial Notes into the Escrow Account and pledge
such  account  to the  Trustee as  security  for the  benefit of the  Holders in
accordance  with the  Escrow  Agreement.  Pursuant  to the  terms of the  Escrow
Account,  the  assets  in the  Escrow  Account  shall  only be used to redeem or
otherwise retire the outstanding 2003 Notes. Pending such use, the assets in the
Escrow Account may only be invested in The Wilmington U.S. Government Portfolio/
Service  Class  Shares  or,  if  such  fund  is no  longer  in  existence,  Cash
Equivalents  and  Government  Securities,  and the Issuer shall grant a security
interest in the Escrow  Account to the  Trustee for the benefit of the  Holders.
Following  retirement  of the 2003  Notes,  any  remaining  assets in the Escrow
Account shall be released to the Issuer.

                                       47
<PAGE>

                                   ARTICLE 5.
                                   SUCCESSORS

SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.

         The Issuer shall not, directly or indirectly:  (1) consolidate or merge
with  or  into  another  Person  (whether  or not the  Issuer  is the  surviving
corporation);  or (2) sell, assign, transfer, convey or otherwise dispose of all
or  substantially  all  of the  properties  or  assets  of the  Issuer  and  its
Subsidiaries,  taken as a whole, in one or more related transactions, to another
Person; unless: (1) either: (a) the Issuer is the surviving corporation;  or (b)
the Person  formed by or surviving  any such  consolidation  or merger (if other
than the  Issuer) or to which such sale,  assignment,  transfer,  conveyance  or
other disposition has been made is a corporation organized or existing under the
laws of the United  States,  any state of the United  States or the  District of
Columbia; (2) the Person formed by or surviving any such consolidation or merger
(if other  than the  Issuer)  or the  Person  to which  such  sale,  assignment,
transfer,  conveyance  or other  disposition  has been made (if  other  than the
Issuer) assumes all the Issuer's Obligations under the Notes, this Indenture and
the Registration Rights Agreement pursuant to agreements reasonably satisfactory
to the Trustee;  (3) immediately  after such  transaction no Default or Event of
Default exists; and (4) the Issuer or the Person formed by or surviving any such
consolidation  or merger  (if other  than the  Issuer),  or to which  such sale,
assignment,  transfer,  conveyance or other disposition has been made: (a) shall
have  Consolidated  Net  Worth  immediately  after the  transaction  equal to or
greater than the  Issuer's  Consolidated  Net Worth  immediately  preceding  the
transaction;  and (b) shall,  on the date of such  transaction  after giving pro
forma effect thereto and any related  financing  transactions as if the same had
occurred at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of  additional  Indebtedness  pursuant to the Fixed  Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof.  In
addition,   the  Issuer  shall  not,  directly  or  indirectly,   lease  all  or
substantially  all  of  its  properties  or  assets,  in  one  or  more  related
transactions,  to any other Person. This Section 5.01 shall not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
the  Issuer  and its  Restricted  Subsidiaries  and  shall  not apply to a sale,
assignment,  transfer,  conveyance or other disposition of all or any portion of
the assets of Unrestricted Subsidiaries.

SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.

         Upon any  consolidation or merger, or any sale,  assignment,  transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Issuer in accordance with Section 5.01 hereof, the successor  corporation
formed by such  consolidation or into or with which the such predecessor  Issuer
is merged or to which such sale,  assignment,  transfer,  lease,  conveyance  or
other disposition is made shall succeed to, and be substituted for (so that from
and after the date of such  consolidation,  merger,  sale, lease,  conveyance or
other disposition, the provisions of this Indenture referring to the "Issuer" or
an "Issuer"  shall refer  instead to the successor  corporation  and not to such
predecessor  Issuer), and may exercise every right and power of the Issuer under
this Indenture  with the same effect as if such successor  Person had been named
as the Issuer herein;  PROVIDED,  HOWEVER, that the predecessor Issuer shall not
be relieved  from the  obligation  to pay the  principal  of and interest on the
Notes except in the case of a sale,  assignment,  transfer,  conveyance or other
disposition  of  all  of  the   predecessor   Issuer's  assets  that  meets  the
requirements of Section 5.01 hereof.

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                                   ARTICLE 6.
                              DEFAULTS AND REMEDIES

SECTION 6.01. EVENTS OF DEFAULT.

         An "Event of Default" occurs if:

         (a) the Issuer defaults for 30 days in the payment when due of interest
on or Liquidated Damages with respect to the Notes;

         (b) the Issuer  defaults in the payment when due of the principal of or
premium, if any, on the Notes;

         (c) the Issuer  fails to comply  with the  provisions  described  under
Sections  4.10,  4.15 or 5.01 hereof unless such  provisions are not at the time
applicable as set forth under Section 4.18 hereof;

         (d) the Issuer  fails to comply  with the  provisions  described  under
Sections  4.07  or 4.09  hereof,  unless  such  provisions  are not at the  time
applicable  as set forth under Section 4.18 hereof,  and such failure  continues
for 30 days;

         (e) the  Issuer  fails for 60 days  after  notice to the  Issuer by the
Trustee or the  Holders  of at least 25% in  aggregate  principal  amount of the
Notes (including  Additional Notes, if any) then outstanding  voting as a single
class to comply with any of the other agreements in this Indenture or the Pledge
Agreement (except as provided in (k) below);

         (f) a default occurs under any mortgage,  indenture or instrument under
which  there may be issued or by which  there may be  secured or  evidenced  any
Indebtedness  for  money  borrowed  by the  Issuer  or  any  of  its  Restricted
Subsidiaries  (or the payment of which is guaranteed by the Issuer or any of its
Restricted  Subsidiaries)  whether such Indebtedness or guarantee now exists, or
is created after the date of this Indenture, if that default:

              (i) is caused by a failure  to pay  principal  of or  interest  or
         premium,  if any,  on such  Indebtedness  (after  giving  effect to any
         applicable  grace period  provided in such  Indebtedness on the date of
         such default) (a "Payment Default"); or

              (ii) results in the acceleration of such Indebtedness prior to its
         express maturity,

and, in each case, the principal amount of any such Indebtedness,  together with
the principal amount of any other such Indebtedness under which there has been a
Payment  Default or the  maturity of which has been so  accelerated,  aggregates
$15.0 million or more;

         (g) failure by the Issuer or any of its Restricted  Subsidiaries to pay
final judgments aggregating in excess of $15.0 million,  which judgments are not
paid, discharged or stayed within 60 days;

         (h) the  Issuer  shall  fail to place the  amount  contemplated  in the
Escrow  Agreement into the Escrow Account on the Closing Date; or ISP shall fail
to retire the 2003 Notes on or prior to maturity;

         (i) the Issuer or any of its Restricted Subsidiaries:

             (1) commences a voluntary case;

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<PAGE>

              (2) consents to the entry of an order for relief  against it in an
              involuntary case;

              (3) consents to the appointment of a custodian of it or for all or
              substantially all of its property;

              (4) makes a general  assignment  for the benefit of its creditors;
              or

              (5) generally is not paying its debts as they become due; or

         (j) a court of competent  jurisdiction  enters an order or decree under
any Bankruptcy Law that:

              (1) is for  relief  against  the  Issuer or any of its  Restricted
              Subsidiaries in an involuntary case;

              (2)  appoints a custodian  of the Issuer or any of its  Restricted
              Subsidiaries  or for all or  substantially  all of the property of
              the Issuer or any of its Restricted Subsidiaries; or

              (3) orders the  liquidation of the Issuer or any of its Restricted
              Subsidiaries;

         and  the  order  or  decree  remains  unstayed  and  in  effect  for 60
consecutive days;

         (k) (i) the  repudiation  by the  Issuer of its  obligations  under the
Pledge  Agreement  or (ii) the  validity,  priority  or  perfection  of the lien
created by the  Pledge  Agreement  fails to be in full force in effect  (whether
through the unenforceability of the Pledge Agreement or otherwise).

SECTION 6.02. ACCELERATION.

         If any Event of Default  (other than an Event of Default  specified  in
clause  (i) or (j) of Section  6.01  hereof  with  respect  to the  Issuer,  any
Restricted  Subsidiary  that  is  a  Significant  Subsidiary  or  any  group  of
Restricted  Subsidiaries  that, taken as a whole, would constitute a Significant
Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the then  outstanding  Notes may declare all the Notes to
be due and  payable  immediately.  Upon any such  declaration,  the Notes  shall
become due and payable immediately.  Notwithstanding the foregoing,  if an Event
of Default  specified  in clause (i) or (j) of Section  6.01 hereof  occurs with
respect  to  the  Issuer,  any  Restricted  Subsidiary  that  is  a  Significant
Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would
constitute a  Significant  Subsidiary,  all  outstanding  Notes shall be due and
payable  immediately without further action or notice. The Holders of a majority
in aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration  and its
consequences  if the  rescission  would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal,  interest
or premium  that has become due solely  because of the  acceleration)  have been
cured or waived.

         If an Event of Default  occurs on or after  December 15, 2005 by reason
of any willful action (or inaction)  taken (or not taken) by or on behalf of the
Issuer with the  intention  of avoiding  payment of the premium  that the Issuer
would  have had to pay if the  Issuer  then had  elected  to  redeem  the  Notes
pursuant to Section  3.07  hereof,  then,  upon  acceleration  of the Notes,  an
equivalent premium shall also become and be immediately due and payable,  to the
extent  permitted  by law,  anything  in this  Indenture  or in the Notes to the
contrary  notwithstanding.  If an Event of Default  occurs prior to December 15,
2005 by reason of any willful action (or inaction) taken (or not taken) by or on
behalf  of the  Issuer  with  the  intention  of  avoiding  the  prohibition  on
redemption  of the Notes  prior to such date,  then,  upon  acceleration  of the

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<PAGE>

Notes,  an  additional  premium  shall also  become and be  immediately  due and
payable in an amount,  for each of the years  beginning  on  December  15 of the
years set forth below,  as set forth below  (expressed  as a  percentage  of the
principal amount of the Notes on the date of payment that would otherwise be due
but for the provisions of this sentence):

        YEAR                                                      PERCENTAGE
        ----                                                      ----------
        2002....................................................    10.626%
        2003....................................................     8.855%
        2004....................................................     7.084%

SECTION 6.03. OTHER REMEDIES.

         If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal,  premium,  if any, and
interest  on the Notes or to enforce the  performance  of any  provision  of the
Notes or this Indenture.

         The Trustee may maintain a  proceeding  even if it does not possess any
of the  Notes  or does not  produce  any of them in the  proceeding.  A delay or
omission  by the  Trustee  or any  Holder of a Note in  exercising  any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

SECTION 6.04. WAIVER OF PAST DEFAULTS.

         Holders of not less than a majority in  aggregate  principal  amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the  Notes  waive an  existing  Default  or Event of  Default  and its
consequences  hereunder,  except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes  (including  in connection  with an offer to purchase)  (PROVIDED,
HOWEVER,  that the Holders of a majority in  aggregate  principal  amount of the
then  outstanding  Notes  may  rescind  an  acceleration  and its  consequences,
including any related  payment  default that  resulted from such  acceleration).
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 6.05. CONTROL BY MAJORITY.

         Holders of a majority in principal amount of the then outstanding Notes
may  direct  the  time,  method  and  place of  conducting  any  proceeding  for
exercising any remedy  available to the Trustee or exercising any trust or power
conferred on it.  However,  the Trustee may refuse to follow any direction  that
conflicts with law or this  Indenture that the Trustee  determines may be unduly
prejudicial  to the  rights of other  Holders of Notes or that may  involve  the
Trustee in personal liability.

SECTION 6.06. LIMITATION ON SUITS.

         A Holder of a Note may pursue a remedy with  respect to this  Indenture
or the Notes only if:

         (a) the  Holder  of a Note  gives to the  Trustee  written  notice of a
continuing Event of Default;

         (b) the  Holders  of at  least  25% in  principal  amount  of the  then
outstanding Notes make a written request to the Trustee to pursue the remedy;

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<PAGE>

         (c) such Holder of a Note or Holders of Notes offer and, if  requested,
provide to the Trustee  indemnity  satisfactory to the Trustee against any loss,
liability or expense;

         (d) the Trustee  does not comply with the request  within 60 days after
receipt of the  request  and the offer  and,  if  requested,  the  provision  of
indemnity; and

         (e) during  such 60-day  period the Holders of a majority in  principal
amount  of the  then  outstanding  Notes do not give  the  Trustee  a  direction
inconsistent with the request.

         A Holder of a Note may not use this  Indenture to prejudice  the rights
of another  Holder of a Note or to obtain a preference  or priority over another
Holder of a Note.

SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.

         Notwithstanding any other provision of this Indenture, the right of any
Holder  of a Note to  receive  payment  of  principal,  premium  and  Liquidated
Damages,  if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the  enforcement of any such payment on or after such  respective
dates, shall not be impaired or affected without the consent of such Holder.

SECTION 6.08. COLLECTION SUIT BY TRUSTEE.

         If an Event of Default  specified in Section  6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee  of an  express  trust  against  the  Issuer for the whole  amount of
principal of, premium and  Liquidated  Damages,  if any, and interest  remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and 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.

SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.

         The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee  (including  any  claim  for  the  reasonable  compensation,   expenses,
disbursements  and  advances of the  Trustee,  its agents and  counsel)  and the
Holders of the Notes allowed in any judicial  proceedings relative to the Issuer
(or any other obligor upon the Notes),  their creditors or their  properties and
shall be entitled and empowered to participate as a member, voting or otherwise,
of any official committee of creditors  appointed in such matter and to collect,
receive and distribute any money or other property payable or deliverable on any
such  claims  and any  custodian  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  to it  for  the  reasonable
compensation,  expenses,  disbursements and advances of the Trustee,  its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To
the extent that the payment of any such  compensation,  expenses,  disbursements
and advances of the Trustee,  its agents and counsel,  and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such  proceeding,
shall be denied for any  reason,  payment of the same shall be secured by a Lien
on,  and  shall be paid out of,  any and all  distributions,  dividends,  money,
securities and other  properties  that the Holders may be entitled to receive in
such proceeding  whether in liquidation or under any plan of  reorganization  or
arrangement or otherwise.  Nothing herein contained shall be deemed to authorize
the  Trustee  to  authorize  or  consent  to or accept or adopt on behalf of any
Holder  any  plan of  reorganization,  arrangement,  adjustment  or

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<PAGE>

composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 6.10. PRIORITIES.

         If the Trustee  collects any money  pursuant to this Article,  it shall
pay out the money in the following order:

              FIRST:  to the Trustee,  its agents and  attorneys for amounts due
         under  Section  7.07  hereof,  including  payment of all  compensation,
         expense and liabilities incurred, and all advances made, by the Trustee
         and the costs and expenses of collection;

              SECOND:  to  Holders  of Notes for  amounts  due and unpaid on the
         Notes for  principal,  premium  and  Liquidated  Damages,  if any,  and
         interest,   ratably,  without  preference  or  priority  of  any  kind,
         according  to the amounts  due and payable on the Notes for  principal,
         premium and Liquidated Damages, if any and interest, respectively; and

              THIRD:  to the  Issuer  or to such  party as a court of  competent
         jurisdiction shall direct.

         The Trustee  may fix a record date and payment  date for any payment to
Holders of Notes pursuant to this Section 6.10.

SECTION 6.11. UNDERTAKING FOR COSTS.

         In any suit for the  enforcement  of any  right or  remedy  under  this
Indenture  or in any suit against the Trustee for any action taken or omitted by
it as a Trustee,  a court in its  discretion may require the filing by any party
litigant  in the suit of an  undertaking  to pay the costs of the suit,  and the
court in its  discretion  may  assess  reasonable  costs,  including  reasonable
attorneys'  fees,  against any party litigant in the suit,  having due regard to
the merits and good faith of the claims or defenses made by the party  litigant.
This Section  does not apply to a suit by the  Trustee,  a suit by a Holder of a
Note  pursuant to Section 6.07 hereof,  or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.

                                   ARTICLE 7.
                                    TRUSTEE

SECTION 7.01. DUTIES OF TRUSTEE.

         (a) If 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 its exercise, as a prudent Person would
exercise  or use under the  circumstances  in the conduct of such  Person's  own
affairs.

         (b) Except during the continuance of an Event of Default:

              (i) the duties of the Trustee  shall be  determined  solely by the
         express  provisions of this Indenture and the Trustee need perform only
         those duties that are  specifically  set forth in this Indenture and no
         others, and no implied covenants or obligations shall be read into this
         Indenture against the Trustee; and

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<PAGE>

              (ii) 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. However, the Trustee shall examine the certificates and
         opinions to determine  whether or not they conform to the  requirements
         of this Indenture (but need not confirm or investigate  the accuracy of
         mathematical  calculations  or other facts stated  therein or otherwise
         verify the contents thereof).

         (c)  The  Trustee  may not be  relieved  from  liabilities  for its own
negligent  action,  its  own  negligent  failure  to  act,  or its  own  willful
misconduct, except that:

              (i) this  paragraph  does not limit the effect of paragraph (b) of
         this Section;

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

              (iii) the Trustee  shall not be liable with  respect to any action
         it takes or omits to take in good faith in accordance  with a direction
         received by it pursuant to Section 6.05 hereof.

         (d) Whether or not therein  expressly so provided,  every  provision of
this  Indenture  that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.

         (e) No provision of this Indenture  shall require the Trustee to expend
or risk its own  funds or incur any  liability.  The  Trustee  shall be under no
obligation to exercise any of its rights and powers under this  Indenture at the
request of any  Holders,  unless such Holder  shall have  offered to the Trustee
security  and  indemnity  satisfactory  to it  against  any loss,  liability  or
expense,  including  reasonable  attorneys' fees that might be incurred by it in
compliance with such request or direction.

         (f) The Trustee shall not be liable for interest on any money  received
by it except as the Trustee may agree in writing with the Issuer.  Money held in
trust by the  Trustee  need not be  segregated  from other  funds  except to the
extent required by law.

SECTION 7.02. RIGHTS OF TRUSTEE.

         (a) The Trustee may conclusively  rely upon any document believed by it
to be genuine and to have been signed or  presented  by the proper  Person.  The
Trustee need not investigate any fact or matter stated in the document.

         (b) Before the Trustee acts or refrains from acting,  it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable  for any action it takes or omits to take in good  faith in  reliance  on
such Officers'  Certificate or Opinion of Counsel.  The Trustee may consult with
counsel and the written  advice of such counsel or any Opinion of Counsel  shall
be full and complete  authorization  and protection from liability in respect of
any action  taken,  suffered  or omitted  by it  hereunder  in good faith and in
reliance thereon.

         (c) The Trustee may act through its  attorneys and agents and shall not
be responsible  for the misconduct or negligence of any agent appointed with due
care.

         (d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it  believes  to be  authorized  or within the rights or
powers conferred upon it by this Indenture.

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<PAGE>

         (e) Unless  otherwise  specifically  provided  in this  Indenture,  any
demand,  request,  direction  or notice from the Issuer shall be  sufficient  if
signed by an Officer of the Issuer.

         (f) 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  unless  such  Holders  shall have  offered  to the  Trustee
reasonable  security  or  indemnity  against  the  costs,   expenses  (including
reasonable  attorneys'  fees) and  liabilities  that might be  incurred by it in
compliance with such request or direction.

SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.

         The  Trustee in its  individual  or any other  capacity  may become the
owner or  pledgee  of Notes  and may  otherwise  deal  with  the  Issuer  or any
Affiliate  of the  Issuer  with the  same  rights  it would  have if it were not
Trustee.  However,  in the  event  that the  Trustee  acquires  any  conflicting
interest it must  eliminate such conflict  within 90 days,  apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

SECTION 7.04. TRUSTEE'S DISCLAIMER.

         The Trustee shall not be responsible for and makes no representation as
to the  validity  or adequacy of this  Indenture  or the Notes,  it shall not be
accountable  for the Issuer's  use of the  proceeds  from the Notes or any money
paid to the Issuer or upon the Issuer's  direction  under any  provision of this
Indenture,  it shall not be responsible  for the use or application of any money
received  by any  Paying  Agent  other  than the  Trustee,  and it shall  not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection  with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.

SECTION 7.05. NOTICE OF DEFAULTS.

         If a Default or Event of Default  occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default  within 90 days after it occurs.  Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note,  the Trustee may  withhold  the notice if and so long as a
committee of its Responsible  Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.

SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.

         Within 60 days after each May 15  beginning  with the May 15  following
the date of this  Indenture,  and for so long as Notes remain  outstanding,  the
Trustee  shall mail to the Holders of the Notes a brief  report dated as of such
reporting  date that complies with TIA ss. 313(a) (but if no event  described in
TIA ss. 313(a) has occurred  within  the twelve  months  preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2).  The Trustee  shall also  transmit by mail all reports as required by
TIA ss. 313(c).

         A copy of each  report at the time of its  mailing  to the  Holders  of
Notes  shall be  mailed to the  Issuer  and  filed  with the SEC and each  stock
exchange on which the Notes are listed in accordance  with TIA ss.  313(d).  The
Issuer shall promptly  notify the Trustee when the Notes are listed on any stock
exchange.

                                       55
<PAGE>

SECTION 7.07. COMPENSATION AND INDEMNITY.

         The  Issuer  shall  pay to the  Trustee  from  time to time  reasonable
compensation  for its acceptance of this Indenture and services  hereunder.  The
Trustee's  compensation  shall not be  limited by any law on  compensation  of a
trustee of an express  trust.  The Issuer shall  reimburse the Trustee  promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.

         The Issuer  shall  indemnify  the  Trustee  against any and all losses,
liabilities or expenses  incurred by it arising out of or in connection with the
acceptance or administration  of its duties under this Indenture,  including the
costs and expenses of enforcing  this  Indenture  against the Issuer  (including
this Section 7.07) and defending  itself against any claim (whether  asserted by
the Issuer or any Holder or any other  Person) or liability in  connection  with
the exercise or performance of any of its powers or duties hereunder,  except to
the extent any such  loss,  liability  or  expense  may be  attributable  to its
negligence  or bad faith.  The Trustee  shall notify the Issuer  promptly of any
claim for which it may seek  indemnity.  Failure by the Trustee to so notify the
Issuer  shall not relieve the Issuer of its  obligations  hereunder.  The Issuer
shall  defend the claim and the Trustee  shall  cooperate  in the  defense.  The
Trustee may have separate  counsel and the Issuer shall pay the reasonable  fees
and expenses of such counsel.  The Issuer need not pay for any  settlement  made
without its consent, which consent shall not be unreasonably  withheld,  delayed
or conditioned.

         The obligations of the Issuer under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.

         To secure the Issuer's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property  held or collected
by the  Trustee,  except  that held in trust to pay  principal  and  interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.

         When the Trustee incurs expenses or renders  services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs,  the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel)  are  intended  to  constitute  expenses  of  administration  under any
Bankruptcy Law.

         The Trustee shall comply with the  provisions  of TIA ss.  313(b)(2) to
the extent applicable.

SECTION 7.08. REPLACEMENT OF TRUSTEE.

         A resignation or removal of the Trustee and  appointment of a successor
Trustee shall become effective only upon the successor  Trustee's  acceptance of
appointment as provided in this Section.

         The  Trustee may resign in writing at any time and be  discharged  from
the trust hereby  created by so notifying the Issuer.  The Holders of a majority
in principal amount of the then  outstanding  Notes may remove the Trustee by so
notifying  the  Trustee  and the  Issuer in  writing.  The Issuer may remove the
Trustee if:

         (a) the Trustee fails to comply with Section 7.10 hereof;

         (b) the Trustee is adjudged a bankrupt or an  insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;

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<PAGE>

         (c) a custodian  or public  officer  takes charge of the Trustee or its
property; or

         (d) the Trustee becomes incapable of acting.

         If the  Trustee  resigns or is  removed  or if a vacancy  exists in the
office of Trustee for any reason,  the Issuer shall promptly appoint a successor
Trustee.  Within one year after the successor Trustee takes office,  the Holders
of a majority in principal  amount of the then  outstanding  Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuer.

         If a successor  Trustee  does not take office  within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, or the
Holders of at least 10% in principal  amount of the then  outstanding  Notes may
petition any court of competent  jurisdiction for the appointment of a successor
Trustee.

         If the  Trustee,  after  written  request  by any Holder who has been a
Holder for at least six months,  fails to comply with Section 7.10,  such Holder
may petition any court of competent  jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

         A  successor  Trustee  shall  deliver  a  written   acceptance  of  its
appointment  to  the  retiring  Trustee  and  to  the  Issuer.   Thereupon,  the
resignation or removal of the retiring Trustee shall become  effective,  and the
successor  Trustee  shall have all the rights,  powers and duties of the Trustee
under  this  Indenture.  The  successor  Trustee  shall  mail  a  notice  of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor  Trustee;  PROVIDED all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuer's  obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.

SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.

         If the Trustee consolidates,  merges or converts into, or transfers all
or  substantially  all of its corporate trust business to, another  corporation,
the  successor  corporation  without  any  further  act  shall be the  successor
Trustee.

SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.

         There shall at all times be a Trustee  hereunder  that is a corporation
organized and doing  business  under the laws of the United States of America or
of any state  thereof that is authorized  under such laws to exercise  corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined  capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.

         This   Indenture   shall  always  have  a  Trustee  who  satisfies  the
requirements  of TIA ss.  310(a)(1),  (2) and (5). The Trustee is subject to TIA
ss. 310(b).

SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.

         The  Trustee is  subject  to TIA ss.  311(a),  excluding  any  creditor
relationship  listed in TIA ss.  311(b).  A  Trustee  who has  resigned  or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.

                                       57
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                                   ARTICLE 8.
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.

         The Issuer may, at the option of its Board of Directors  evidenced by a
resolution  set forth in an Officers'  Certificate,  at any time,  elect to have
either  Section  8.02 or 8.03  hereof be applied to all  outstanding  Notes upon
compliance with the conditions set forth below in this Article 8.

SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.

         Upon the  Issuer's  exercise  under  Section  8.01 hereof of the option
applicable to this Section 8.02, the Issuer shall,  subject to the  satisfaction
of the  conditions  set forth in  Section  8.04  hereof,  be deemed to have been
discharged  from its obligations  with respect to all  outstanding  Notes on the
date  the  conditions  set  forth  below  are  satisfied  (hereinafter,   "LEGAL
DEFEASANCE").  For this purpose, Legal Defeasance means that the Issuer shall be
deemed to have paid and  discharged the entire  Indebtedness  represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the  purposes of Section  8.05 hereof and the other  Sections of this  Indenture
referred  to in (a)  and  (b)  below,  and  to  have  satisfied  all  its  other
obligations  under such Notes and this Indenture (and the Trustee,  on demand of
and at the expense of the Issuer, shall execute proper instruments acknowledging
the  same),  except for the  following  provisions  which  shall  survive  until
otherwise  terminated  or  discharged  hereunder:  (a) the  rights of Holders of
outstanding  Notes to receive  solely from the trust fund  described  in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium,  if any, interest and Liquidated  Damages, if any, on
such Notes when such payments are due, (b) the Issuer's obligations with respect
to such Notes under Article 2 and Section 4.02 hereof,  (c) the rights,  powers,
trusts,  duties  and  immunities  of the  Trustee  hereunder  and  the  Issuer's
obligations  in  connection  therewith  and  (d)  this  Article  8.  Subject  to
compliance  with this  Article  Eight,  the Issuer may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.

SECTION 8.03. COVENANT DEFEASANCE.

         Upon the  Issuer's  exercise  under  Section  8.01 hereof of the option
applicable to this Section 8.03, the Issuer shall,  subject to the  satisfaction
of the  conditions  set forth in  Section  8.04  hereof,  be  released  from its
obligations  under the covenants  contained in Sections 4.07,  4.08, 4.09, 4.10,
4.11,  4.12,  4.13,  4.15,  4.16,  4.17, 4.18 and 4.19 hereof and clause (iv) of
Section 5.01 hereof with respect to the outstanding  Notes on and after the date
the conditions set forth in Section 8.04 are satisfied  (hereinafter,  "COVENANT
DEFEASANCE"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the  consequences of any thereof) in connection  with such covenants,  but shall
continue to be deemed  "outstanding" for all other purposes  hereunder (it being
understood  that  such  Notes  shall not be deemed  outstanding  for  accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding  Notes,  the  Issuer  may  omit to  comply  with and  shall  have no
liability in respect of any term,  condition or limitation set forth in any such
covenant,  whether directly or indirectly,  by reason of any reference elsewhere
herein to any such  covenant or by reason of any  reference in any such covenant
to any other  provision  herein or in any other  document  and such  omission to
comply shall not  constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Issuer's exercise under
Section  8.01  hereof of the option  applicable  to this  Section  8.03  hereof,
subject to the  satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(c) through 6.01(g) hereof shall not constitute Events of Default.

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SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.

         The  following  shall be the  conditions to the  application  of either
Section 8.02 or 8.03 hereof to the outstanding Notes:

         In order to exercise either Legal Defeasance or Covenant Defeasance:

         (a) the Issuer must irrevocably deposit with the Trustee, in trust, for
the  benefit  of the  Holders,  cash  in  United  States  dollars,  non-callable
Government  Securities,  or a  combination  thereof,  in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants,  to pay the principal of, premium and Liquidated  Damages,  if any,
and interest on the outstanding  Notes on the stated date for payment thereof or
on the  applicable  redemption  date,  as the case may be, and the  Issuer  must
specify  whether the Notes are being  defeased  to  maturity or to a  particular
redemption date;

         (b) in the case of an election  under  Section 8.02 hereof,  the Issuer
shall have  delivered to the Trustee an Opinion of Counsel in the United  States
reasonably acceptable to the Trustee confirming that (A) the Issuer has received
from, or there has been published by, the Internal  Revenue  Service a ruling or
(B) since the date of this Indenture,  there has been a change in the applicable
federal  income tax law, in either case to the effect  that,  and based  thereon
such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes
will not  recognize  income,  gain or loss for federal  income tax purposes as a
result of such Legal Defeasance and will be subject to federal income tax on the
same  amounts,  in the same  manner and at the same times as would have been the
case if such Legal  Defeasance had not occurred;

         (c) in the case of an election  under  Section 8.03 hereof,  the Issuer
shall have  delivered to the Trustee an Opinion of Counsel in the United  States
reasonably  acceptable  to  the  Trustee  confirming  that  the  Holders  of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant  Defeasance and will be subject to federal
income  tax on the same  amounts,  in the same  manner  and at the same times as
would have been the case if such Covenant Defeasance had not occurred;

         (d)  no  Default  or  Event  of  Default  shall  have  occurred  and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of  Indebtedness  all or a portion of the proceeds
of  which  will be  used to  defease  the  Notes  pursuant  to  this  Article  8
concurrently with such incurrence);

         (e) such Legal Defeasance or Covenant  Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument  (other  than  this  Indenture)  to which  the  Issuer  or any of its
Subsidiaries  is a party or by which the  Issuer or any of its  Subsidiaries  is
bound;

         (f) the  Issuer  shall  have  delivered  to the  Trustee  an  Officers'
Certificate  stating that the deposit was not made by the Issuer with the intent
of  preferring  the Holders  over any other  creditors of the Issuer or with the
intent of defeating,  hindering,  delaying or defrauding any other  creditors of
the Issuer; and

         (g) the  Issuer  shall  have  delivered  to the  Trustee  an  Officers'
Certificate  and an  Opinion  of  Counsel,  each  stating  that  all  conditions
precedent  provided  for or relating  to the Legal  Defeasance  or the  Covenant
Defeasance have been complied with.

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SECTION 8.05. DEPOSITED  MONEY  AND  GOVERNMENT SECURITIES TO  BE HELD IN TRUST;
              OTHER MISCELLANEOUS PROVISIONS.

         Subject to Section 8.06 hereof,  all money and non-callable  Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying  trustee,  collectively  for  purposes  of  this  Section  8.05,  the
"Trustee")  pursuant to Section 8.04 hereof in respect of the outstanding  Notes
shall be held in trust  and  applied  by the  Trustee,  in  accordance  with the
provisions of such Notes and this Indenture,  to the payment, either directly or
through any Paying Agent  (including  the Issuer  acting as Paying Agent) as the
Trustee  may  determine,  to the  Holders  of such  Notes of all sums due and to
become due thereon in respect of principal,  premium, if any, and interest,  but
such money need not be segregated from other funds except to the extent required
by law.

         The Issuer shall pay and indemnify the Trustee  against any tax, fee or
other charge imposed on or assessed against the cash or non-callable  Government
Securities  deposited  pursuant  to Section  8.04  hereof or the  principal  and
interest  received  in respect  thereof  other  than any such tax,  fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

         Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall  deliver  or pay to the Issuer  from time to time upon the  request of the
Issuer any money or non-callable Government Securities held by it as provided in
Section 8.04 hereof  which,  in the opinion of a nationally  recognized  firm of
independent  public  accountants  expressed in a written  certification  thereof
delivered  to the Trustee  (which may be the  opinion  delivered  under  Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

SECTION 8.06. REPAYMENT TO ISSUER.

         Any money  deposited with the Trustee or any Paying Agent, or then held
by the Issuer, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such principal,
and premium, if any, or interest has become due and payable shall be paid to the
Issuer on its request or (if then held by the Issuer) shall be  discharged  from
such trust; and the Holder of such Note shall thereafter look only to the Issuer
for payment thereof,  and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuer 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
Issuer  cause to be  published  once,  in the New York Times and The Wall Street
Journal (national  edition),  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  notification or publication,  any unclaimed  balance of such money
then remaining will be repaid to the Issuer.

SECTION 8.07. REINSTATEMENT.

         If the  Trustee or Paying  Agent is unable to apply any  United  States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental  authority enjoining,  restraining or otherwise prohibiting such
application,  then the Issuer's  obligations  under this Indenture and the Notes
shall be revived and  reinstated  as though no deposit had occurred  pursuant to
Section  8.02 or 8.03 hereof  until such time as the Trustee or Paying  Agent is
permitted  to apply  all such  money in  accordance  with  Section  8.02 or 8.03
hereof,  as the case may be;  PROVIDED,  HOWEVER,  that, if the Issuer makes any
payment of principal of, premium,  if any, or interest on any Note following the
reinstatement of its  obligations,  the Issuer shall be subrogated to the rights
of the Holders of such Notes to receive  such payment from the money held by the
Trustee or Paying Agent.

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                                   ARTICLE 9.
                        AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.

         Notwithstanding  Section  9.02 of this  Indenture,  the  Issuer and the
Trustee  may  amend or  supplement  this  Indenture,  the  Notes  or the  Pledge
Agreement without the consent of any Holder of a Note:

         (a) to cure any ambiguity, defect or inconsistency;

         (b) to provide for  uncertificated  Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof (including the
related  definitions) in a manner that does not materially  adversely affect any
Holder;

         (c) to provide for the  assumption of the Issuer's  Obligations  to the
Holders of Notes by a successor to the Issuer pursuant to Article 5 hereof;

         (d) to make any change  that would  provide  any  additional  rights or
benefits to the Holders of Notes  (including  the provision of any Liens for the
benefit of  Holders as  contemplated  by Section  4.12  hereof) or that does not
adversely affect the legal rights under this Indenture of any such Holder;

         (e) to  comply  with  requirements  of the SEC in  order to  effect  or
maintain the qualification of this Indenture under the TIA; or

         (f) to provide for the issuance of Additional  Notes in accordance with
the limitations set forth in this Indenture.

         Upon the request of the Issuer accompanied by a resolution of its Board
of Directors  authorizing  the  execution  of any such  amended or  supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02  hereof,  the Trustee  shall join with the Issuer in the  execution  of any
amended  or  supplemental   indenture  or  amendment  to  the  Pledge  Agreement
authorized  or permitted by the terms of this  Indenture and to make any further
appropriate  agreements and stipulations that may be therein contained,  but the
Trustee  shall not be  obligated  to enter  into such  amended  or  supplemental
indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.

SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.

         Except as  provided  below in this  Section  9.02,  the  Issuer and the
Trustee may amend or supplement this Indenture (including Section 3.09, 4.10 and
4.15 hereof), the Notes and the Pledge Agreement with the consent of the Holders
of at least a majority in principal  amount of the Notes  (including  Additional
Notes, if any) then  outstanding  voting as a single class  (including  consents
obtained in  connection  with a tender offer or exchange  offer for, or purchase
of, the Notes),  and,  subject to Sections  6.04 and 6.07  hereof,  any existing
Default  or Event of  Default  (other  than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except a
payment  default  resulting  from an  acceleration  that has been  rescinded) or
compliance  with any  provision  of this  Indenture,  the  Notes  or the  Pledge
Agreement  may be waived  with the  consent  of the  Holders  of a  majority  in
principal amount of the then outstanding  Notes (including  Additional Notes, if
any) voting as a single class (including  consents obtained in connection with a
tender  offer or exchange  offer for, or purchase  of, the Notes).  Section 2.08
hereof  shall  determine  which Notes are  considered  to be  "outstanding"  for
purposes of this Section 9.02.

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<PAGE>

         Upon the request of the Issuer accompanied by a resolution of its Board
of Directors  authorizing  the  execution  of any such  amended or  supplemental
indenture  or amendment  to the Pledge  Agreement,  and upon the filing with the
Trustee of evidence satisfactory to the Trustee of the consent of the Holders of
Notes as aforesaid,  and upon receipt by the Trustee of the documents  described
in Section 7.02 hereof,  the Trustee shall join with the Issuer in the execution
of such amended or supplemental  indenture or amendment to the Pledge  Agreement
unless  such  amended  or  supplemental  indenture  or  amendment  to the Pledge
Agreement directly affects the Trustee's own rights,  duties or immunities under
this  Indenture or otherwise,  in which case the Trustee may in its  discretion,
but shall not be obligated to, enter into such amended or supplemental indenture
or amendment to the Pledge Agreement.

         It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the  particular  form of any proposed  amendment or
waiver,  but it shall be  sufficient  if such  consent  approves  the  substance
thereof.

         After an  amendment,  supplement  or waiver under this Section  becomes
effective,  the Issuer  shall mail to the  Holders of Notes  affected  thereby a
notice briefly  describing the amendment,  supplement or waiver.  Any failure of
the Issuer to mail such notice, or any defect therein,  shall not,  however,  in
any way  impair or affect  the  validity  of any such  amended  or  supplemental
indenture, amendment to the Pledge Agreement or waiver. Subject to Sections 6.04
and 6.07 hereof, the Holders of a majority in aggregate  principal amount of the
Notes (including  Additional Notes, if any) then outstanding  voting as a single
class may waive  compliance  in a  particular  instance  by the Issuer  with any
provision of this  Indenture,  the Notes or  amendment to the Pledge  Agreement.
However,  without the consent of each Holder  affected,  an  amendment or waiver
under  this  Section  9.02  may  not  (with  respect  to  any  Notes  held  by a
non-consenting Holder):

         (a) reduce the principal  amount of Notes whose Holders must consent to
an amendment, supplement or waiver;

         (b) reduce the principal of or change the fixed maturity of any Note or
alter the  provisions  with  respect to the  redemption  of the Notes  except as
provided above with respect to Sections 4.10 and 4.15 hereof;

         (c) reduce the rate of or change the time for  payment of  interest  on
any Note;

         (d) waive a Default or Event of Default in the payment of principal of,
or interest or premium,  or Liquidated  Damages,  if any, on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes,  including  Additional
Notes,  if any,  and a waiver of the payment  default  that  resulted  from such
acceleration);

         (e) make any Note payable in money other than that stated in the Notes;

         (f) make any change in the  provisions  of this  Indenture  relating to
waivers of past  Defaults or the rights of Holders of Notes to receive  payments
of principal  of, or interest or premium or Liquidated  Damages,  if any, on the
Notes;

         (g) waive a  redemption  payment with respect to any Note (other than a
payment required by Sections 4.10 or 4.15 hereof); or

         (h) make any change in Sections 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions.

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SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.

         Every  amendment or supplement to this  Indenture or the Notes shall be
set forth in a amended or  supplemental  indenture that complies with the TIA as
then in effect.

SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.

         Until an amendment,  supplement or waiver becomes effective,  a consent
to it by a Holder of a Note is a continuing  consent by the Holder of a Note and
every  subsequent  Holder of a Note or portion of a Note that evidences the same
debt as the  consenting  Holder's  Note,  even if notation of the consent is not
made on any Note.  However,  any such Holder of a Note or subsequent Holder of a
Note may  revoke  the  consent as to its Note if the  Trustee  receives  written
notice of revocation before the date the waiver, supplement or amendment becomes
effective.  An amendment,  supplement or waiver becomes  effective in accordance
with its terms and thereafter binds every Holder.

SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.

         The  Trustee  may place an  appropriate  notation  about an  amendment,
supplement  or  waiver  on any Note  thereafter  authenticated.  The  Issuer  in
exchange  for all Notes may issue and the  Trustee  shall,  upon  receipt  of an
Authentication  Order,  authenticate  new  Notes  that  reflect  the  amendment,
supplement or waiver.

         Failure to make the appropriate  notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.

SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.

         The  Trustee  shall  sign any  amended  or  supplemental  indenture  or
amendment to the Pledge Agreement  authorized  pursuant to this Article 9 if the
amendment  or  supplement  does  not  adversely   affect  the  rights,   duties,
liabilities  or immunities of the Trustee.  The Issuer may not sign an amendment
or supplemental  indenture or amendment to the Pledge  Agreement until the Board
of Directors approves it. In executing any amended or supplemental  indenture or
amendment to the Pledge Agreement,  the Trustee shall be entitled to receive and
(subject to Section 7.01 hereof)  shall be fully  protected in relying  upon, in
addition  to the  documents  required  by Section  12.04  hereof,  an  Officers'
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental  indenture or amendment to the Pledge Agreement is authorized or
permitted by this  Indenture and that such amendment or supplement is the legal,
valid and binding obligation of the Issuer, enforceable against it in accordance
with  its  terms,  subject  to  customary  exceptions,  and  complies  with  the
provisions hereof (including Section 9.03).

                                  ARTICLE 10.
                             COLLATERAL AND SECURITY

SECTION 10.01. PLEDGE AGREEMENT.

         The due and  punctual  payment of the  principal  of and  interest  and
Liquidated  Damages,  if any, on the Notes when and as the same shall be due and
payable,  whether on an Interest  Payment  Date, at maturity,  by  acceleration,
repurchase,  redemption or otherwise,  and interest on the overdue  principal of
and interest and Liquidated Damages (to the extent permitted by law), if any, on
the Notes and performance of all other  obligations of the Issuer to the Holders
of Notes or the Trustee  under this  Indenture  and the Notes,  according to the
terms hereunder or thereunder,  are secured as provided in the Pledge  Agreement
which the Issuer has entered  into  simultaneously  with the  execution  of this
Indenture

                                       63
<PAGE>

and  which is  attached  as  Exhibit  E hereto.  Each  Holder  of Notes,  by its
acceptance  thereof,  consents  and agrees to the terms of the Pledge  Agreement
(including,  without  limitation,  the provisions  providing for foreclosure and
release of  Collateral) as the same may be in effect or may be amended from time
to time in accordance  with its terms and  authorizes and directs the Trustee to
enter into the Pledge  Agreement and to perform its obligations and exercise its
rights thereunder as a Secured Party in accordance therewith. The Issuer will do
or cause to be done all such acts and things as may be necessary  or proper,  or
as may be  required by the  provisions  of the Pledge  Agreement,  to assure and
confirm to the Trustee the  security  interest  in the  Collateral  contemplated
hereby,  by the  Pledge  Agreement  or any part  thereof,  as from  time to time
constituted,  so as to render the same available for the security and benefit of
this  Indenture  and of the Notes  secured  hereby,  according to the intent and
purposes herein expressed. The Issuer will take, and will cause its Subsidiaries
to take, upon request of the Trustee, any and all actions reasonably required to
cause  the  Pledge  Agreement  to  create  and  maintain,  as  security  for the
Obligations of the Issuer  hereunder,  a valid and  enforceable  perfected first
priority Lien in and on all the Collateral,  in favor of the Trustee, as Secured
Party,  for the  benefit of the  Holders of Notes,  superior to and prior to the
rights of all third Persons and subject to no other Liens than Permitted Liens.

SECTION 10.02. RECORDING AND OPINIONS.

         (a) The Issuer will  furnish to the Trustee on December 15 in each year
beginning with December 15, 2002, an Opinion of Counsel,  dated as of such date,
either:

              (i) (A) stating that,  in the opinion of such counsel,  action has
         been  taken  with  respect  to  the  recording,   registering,  filing,
         re-recording,   re-registering   and  re-filing  of  all   supplemental
         indentures,  financing  statements,  continuation  statements  or other
         instruments  of further  assurance as is necessary to maintain the Lien
         of the Pledge  Agreement  and  reciting  with  respect to the  security
         interest in the  Collateral  the details of such action or referring to
         prior  Opinions  of Counsel in which such  details  are given,  and (B)
         stating that, in the opinion of such counsel, based on relevant laws as
         in  effect  on the  date of such  Opinion  of  Counsel,  all  financing
         statements  and  continuation  statements  have been executed and filed
         that are necessary as of such date and during the  succeeding 12 months
         fully to  preserve  and  protect,  to the extent  such  protection  and
         preservation are possible by filing, the rights of the Holders of Notes
         and the Trustee  hereunder and under the Pledge  Agreement with respect
         to the security interest in the Collateral; or

              (ii) stating that, in the opinion of such counsel,  no such action
         is necessary to maintain such Lien and assignment.

         (b) The  Issuer  will  otherwise  comply  with  the  provisions  of TIA
ss.314(b).

SECTION 10.03. RELEASE OF COLLATERAL.

         (a) Subject to  subsections  (b),  (c) and (d) of this  Section  10.03,
Collateral  may be released from the Lien and security  interest  created by the
Pledge  Agreement  at any  time or from  time to  time in  accordance  with  the
provisions of the Pledge Agreement or as provided hereby. In addition,  upon the
request of the Issuer pursuant to an Officers'  Certificate  certifying that all
conditions  precedent  hereunder  have been met and stating  whether or not such
release is in connection with an Asset Sale and (at the sole cost and expense of
the  Issuer) the  Trustee  will  release  Collateral  that is sold,  conveyed or
disposed of in compliance with the provisions of this Indenture;  PROVIDED, that
if such sale,  conveyance or  disposition  constitutes an Asset Sale, the Issuer
will apply the Net Proceeds in accordance with Section 4.10 hereof. Upon receipt
of such Officers' Certificate the Trustee shall execute,  deliver or acknowledge
any

                                       64
<PAGE>

necessary  or proper  instruments  of  termination,  satisfaction  or release to
evidence the release of any Collateral permitted to be released pursuant to this
Indenture or the Pledge Agreement.

         (b) No Collateral  may be released from the Lien and security  interest
created  by the  Pledge  Agreement  pursuant  to the  provisions  of the  Pledge
Agreement  unless  the  certificate  required  by this  Section  10.03  has been
delivered to the Trustee.

         (c) At any time when a Default or Event of Default has  occurred and is
continuing  and the  maturity  of the Notes  has been  accelerated  (whether  by
declaration or otherwise),  no release of Collateral  pursuant to the provisions
of the Pledge Agreement will be effective as against the Holders of Notes.

         (d) The release of any Collateral  from the terms of this Indenture and
the  Pledge  Agreement  will not be deemed to impair  the  security  under  this
Indenture in  contravention  of the  provisions  hereof if and to the extent the
Collateral is released pursuant to the terms of the Pledge Agreement and hereof.
To the extent  applicable,  the Issuer  will cause TIA ss.  313(b),  relating to
reports,  and TIA ss. 314(d),  relating to the release OF property or securities
from the Lien and security  interest of the Pledge Agreement and relating to the
substitution  therefor of any property or securities to be subjected to the Lien
and  security  interest  of the  Pledge  Agreement,  to be  complied  with.  Any
certificate  or opinion  required by TIA ss. 314(d) may be made by aN Officer of
the Issuer except in cases where TIA ss. 314(d)  requires that such  certificate
or opinion be made by aN independent Person, which Person will be an independent
engineer,  appraiser or other expert selected or approved by the Trustee and the
Collateral Agent in the exercise of reasonable care.

SECTION 10.04. CERTIFICATES OF THE ISSUER.

         The Issuer will furnish to the Trustee,  prior to each proposed release
of Collateral pursuant to the Pledge Agreement:

              (i) all documents required by TIAss.314(d); and

              (ii) an Opinion of  Counsel,  which may be  rendered  by  internal
         counsel to the Issuer, to the effect that such  accompanying  documents
         constitute all documents required by TIA ss.314(d).

         The Trustee  may,  to the extent  permitted  by Sections  7.01 and 7.02
hereof,   accept  as  conclusive  evidence  of  compliance  with  the  foregoing
provisions  the  appropriate  statements  contained in such  documents  and such
Opinion of Counsel.

SECTION 10.05. CERTIFICATES OF THE TRUSTEE.

         In the event that the Issuer wishes to release Collateral in accordance
with the Pledge  Agreement  and has  delivered  the  certificates  and documents
required  by the Pledge  Agreement  and  Sections  10.03 and 10.04  hereof,  the
Trustee will determine whether it has received all documentation required by TIA
ss. 314(d) in connection with such release.

SECTION 10.06.  AUTHORIZATION  OF  ACTIONS  TO BE TAKEN BY THE TRUSTEE UNDER THE
               PLEDGE AGREEMENT.

         Subject to the provisions of Section 7.01 and 7.02 hereof,  the Trustee
may,  in its sole  discretion  and  without the consent of the Holders of Notes,
take,  on behalf of the  Holders of Notes,  all  actions it deems  necessary  or
appropriate in order to:

                                       65
<PAGE>

              (iii) enforce any of the terms of the Pledge Agreement; and

              (iv) collect and receive any and all amounts payable in respect of
         the Obligations of the Issuer hereunder.

         The Trustee  will have power to institute  and maintain  such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts that may be unlawful or in violation of the Pledge Agreement or this
Indenture,  and such suits and  proceedings as the Trustee may deem expedient to
preserve or protect its  interests  and the interests of the Holders of Notes in
the Collateral  (including  power to institute and maintain suits or proceedings
to restrain the  enforcement  of or  compliance  with any  legislative  or other
governmental enactment,  rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest  hereunder or be prejudicial to the interests
of the Holders of Notes or of the Trustee).

SECTION 10.07.  AUTHORIZATION  OF  RECEIPT OF FUNDS BY  THE  TRUSTEE  UNDER  THE
                PLEDGE AGREEMENT.

         The Trustee is  authorized  to receive any funds for the benefit of the
Holders of Notes  distributed  under the Pledge  Agreement,  and to make further
distributions  of such funds to the Holders of Notes according to the provisions
of this Indenture.

SECTION 10.08. TERMINATION OF SECURITY INTEREST.

         Upon the payment in full of all  Obligations  of the Issuer  under this
Indenture  and the Notes,  or upon Legal  Defeasance,  the Trustee  will, at the
request of the Issuer,  release the Liens  pursuant  to this  Indenture  and the
Pledge Agreement.

                                  ARTICLE 11.
                           satisfaction and discharge

SECTION 11.01.  SATISFACTION AND DISCHARGE.

         This  Indenture  will be  discharged  and will  cease to be of  further
effect as to all Notes issued hereunder, when:

(1)      either:

         (a)      all Notes that have been authenticated (except lost, stolen or
                  destroyed  Notes that have been replaced or paid and Notes for
                  whose payment money has  theretofore  been  deposited in trust
                  and  thereafter  repaid to the Issuer) have been  delivered to
                  the Trustee for cancellation; or

         (b)      all Notes  that have not been  delivered  to the  Trustee  for
                  cancellation  have  become  due and  payable  by reason of the
                  mailing of a notice of  redemption or otherwise or will become
                  due and payable within one year and the Issuer has irrevocably
                  deposited or caused to be deposited  with the Trustee as trust
                  funds in trust solely for the benefit of the Holders,  cash in
                  U.S.  dollars,   non-callable  Government  Securities,   or  a
                  combination  thereof,  in such  amounts as will be  sufficient
                  without  consideration of any reinvestment of interest, to pay
                  and  discharge  the  entire  indebtedness  on  the  Notes  not
                  delivered  to the  Trustee  for  cancellation  for  principal,
                  premium and Liquidated  Damages,  if any, and accrued interest
                  to the date of maturity or redemption;

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<PAGE>

(2)      no Default or Event of Default shall have occurred and be continuing on
         the date of such deposit or shall occur as a result of such deposit and
         such deposit will not result in a breach or violation of, or constitute
         a default under, any other instrument to which the Issuer is a party or
         by which the Issuer is bound;

(3)      the Issuer has paid or caused to be paid all sums payable  by it  under
         this Indenture; and

(4)      the Issuer has delivered irrevocable  instructions to the Trustee under
         this  Indenture to apply the deposited  money toward the payment of the
         Notes at maturity or the redemption date, as the case may be.

In addition,  the Issuer must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.

         Notwithstanding  the satisfaction  and discharge of this Indenture,  if
money shall have been  deposited  with the Trustee  pursuant to subclause (b) of
clause (1) of this  Section,  the  provisions  of Section 11.02 and Section 8.06
shall survive.

SECTION 11.02.  APPLICATION OF TRUST MONEY.

         Subject to the provisions of Section 8.06, all money deposited with the
Trustee  pursuant to Section  11.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture,  to the payment,
either directly or through any Paying Agent  (including the Issuer acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee;  but such money need not be segregated from
other funds except to the extent required by law.

         If the  Trustee  or  Paying  Agent  is  unable  to apply  any  money or
Government  Securities in  accordance  with Section 11.01 by reason of any legal
proceeding  or by reason of any order or judgment  of any court or  governmental
authority enjoining,  restraining or otherwise prohibiting such application, the
Issuer's  obligations  under this  Indenture  and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 11.01; PROVIDED
that if the Issuer has made any payment of  principal  of,  premium,  if any, or
interest  on any Notes  because of the  reinstatement  of its  obligations,  the
Issuer shall be subrogated to the rights of the Holders of such Notes to receive
such  payment  from the money or  Government  Securities  held by the Trustee or
Paying Agent.

                                   ARTICLE 12.
                                  MISCELLANEOUS

SECTION 12.01.  TRUST INDENTURE ACT CONTROLS.

         If any provision of this Indenture limits,  qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties shall control.

SECTION 12.02. NOTICES.

         Any notice or  communication  by the Issuer or the Trustee to the other
is duly given if in writing  and  delivered  in Person or mailed by first  class
mail (registered or certified,  return receipt requested),  telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:

                                       67
<PAGE>

         If to the Issuer:

         International Specialty Holdings Inc.
         c/o ISP Management Company, Inc.
         1361 Alps Road
         Wayne, New Jersey  07470
         Telecopier No.:  (973) 628-3229
         Attention:  General Counsel

         With a copy to:
         Weil, Gotshal & Manges LLP
         767 Fifth Avenue
         New York, New York 10153
         Telecopier No.:  (212) 310-8007
         Attention:  Michael E. Lubowitz

         If to the Trustee:

         Wilmington Trust Company
         Rodney Square North
         1100 North Market Street
         Wilmington, Delaware  19890
         Telecopier No.:  (302) 651-8882
         Attention:  Corporate Trust Division/ISP

         With a copy to:
         Winston & Strawn
         200 Park Avenue
         New York, New York  10166
         Telecopier No.:  (212) 294-4700
         Attention:  Jeffrey H. Elkin

         The  Issuer or the  Trustee,  by  notice  to the  other  may  designate
additional or different addresses for subsequent notices or communications.

         All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given:  at the time delivered by hand, if personally
delivered;  five  Business  Days  after  being  deposited  in the mail,  postage
prepaid,  if mailed (except that notices and communications to the Trustee shall
be effective  only upon receipt);  when answered back, if telexed;  when receipt
acknowledged,  if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.

         Any notice or  communication to a Holder shall be mailed by first class
mail,  certified or registered,  return receipt  requested,  or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the  Registrar.  Any notice or  communication  shall also be so mailed to any
Person  described in TIA ss. 313(c),  to the extent required by the TIA. Failure
to mail a notice  or  communication  to a Holder  or anY  defect in it shall not
affect its sufficiency with respect to other Holders.

         If a notice or  communication  is mailed in the manner  provided  above
within the time  prescribed,  it is duly  given,  whether  or not the  addressee
receives it.

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<PAGE>

         If the Issuer mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.

SECTION 12.03.  COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.

         Holders may  communicate  pursuant to TIA ss. 312(b) with other Holders
with respect to their rights undeR this Indenture or the Notes. The Issuer,  the
Trustee,  the  Registrar  and anyone else shall have the  protection  of TIA ss.
312(c).

SECTION 12.04.  CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

         Upon any  request or  application  by the Issuer to the Trustee to take
any action under this Indenture, the Issuer shall furnish to the Trustee:

         (a)  an  Officers'   Certificate  in  form  and  substance   reasonably
satisfactory  to the Trustee  (which shall include the  statements  set forth in
Section  13.05  hereof)  stating  that,  in  the  opinion  of the  signers,  all
conditions  precedent  and  covenants,  if any,  provided for in this  Indenture
relating to the proposed action have been satisfied; and

         (b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee  (which shall include the  statements  set forth in Section 13.05
hereof)  stating  that,  in the  opinion of such  counsel,  all such  conditions
precedent and covenants have been satisfied.

SECTION 12.05.  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

         Each certificate or opinion with respect to compliance with a condition
or covenant  provided for in this Indenture  (other than a certificate  provided
pursuant  to TIA ss.  314(a)(4))  shall  comply with the  provisions  of TIA ss.
314(e) and shall include:

         (c) a statement that the Person making such  certificate or opinion has
read such covenant or condition;

         (d) 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;

         (e) a statement that, in the opinion of such Person, he or she has made
such  examination or  investigation  as is necessary to enable him to express an
informed  opinion as to  whether  or not such  covenant  or  condition  has been
satisfied; and

         (f) a statement  as to whether or not,  in the opinion of such  Person,
such condition or covenant has been satisfied.

SECTION 12.06.  RULES BY TRUSTEE AND AGENTS.

         The Trustee may make reasonable  rules for action by or at a meeting of
Holders.  The  Registrar  or  Paying  Agent  may make  reasonable  rules and set
reasonable requirements for its functions.

SECTION 12.07.  NO  PERSONAL  LIABILITY  OF  DIRECTORS,  OFFICERS, EMPLOYEES AND
                STOCKHOLDERS.

         No past, present or future director, officer, employee, incorporator or
stockholder of the Issuer, as such, shall have any liability for any obligations
of the  Issuer  under the Notes  this  Indenture  or for any claim  based on, in
respect of, or by reason of, such obligations or their creation.  Each Holder by

                                       69
<PAGE>

accepting a Note waives and releases all such liability.  The waiver and release
are part of the consideration for issuance of the Notes.

SECTION 12.08.  GOVERNING LAW.

         THE  INTERNAL  LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT
TO APPLICABLE  PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

SECTION 12.09.  NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

         This Indenture may not be used to interpret any other  indenture,  loan
or debt agreement of the Issuer or its Subsidiaries or of any other Person.  Any
such  indenture,  loan or debt  agreement  may  not be  used to  interpret  this
Indenture.

SECTION 12.10.  SUCCESSORS.

         All agreements of the Issuer in this Indenture and the Notes shall bind
its  successors.  All agreements of the Trustee in this Indenture shall bind its
successors.

SECTION 12.11.  SEVERABILITY.

         In case  any  provision  in this  Indenture  or in the  Notes  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 12.12.  COUNTERPART ORIGINALS.

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

SECTION 12.13.  TABLE OF CONTENTS, HEADINGS, ETC.

         The  Table of  Contents,  Cross-Reference  Table  and  Headings  of the
Articles and Sections of this  Indenture  have been inserted for  convenience of
reference  only,  are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.

                         [Signatures on following pages]

                                       70
<PAGE>

                                   SIGNATURES

Dated as of December 13, 2001
                               ISSUER:

                               INTERNATIONAL SPECIALTY HOLDINGS INC.

                               By: /s/ Andrew J. Diamond
                                   ---------------------------------------------
                                   Name: Andrew J. Diamond
                                   Title: Vice President and Assistant Treasurer

                                       I-1
<PAGE>

                                    TRUSTEE:

                                    WILMINGTON TRUST COMPANY

                                    By: /s/ James D. Nesci
                                        ----------------------------------------
                                        Name: James D. Nesci
                                        Title: Authorized Signer

                                       I-2
<PAGE>

                                                                      EXHIBIT A1

                                 [Face of Note]
--------------------------------------------------------------------------------
                                                         CUSIP/CINS ____________

        10 5/8% [Series A] [Series B] Senior Subordinated Notes due 2011

No. ___                                                            $____________

                      INTERNATIONAL SPECIALTY HOLDINGS INC.

promises to pay to
                   -------------------------------------------------------------

or registered assigns,
the principal sum of
                     -----------------------------------------------------------

Dollars on December 15, 2009.

Interest Payment Dates:  June 15 and December 15

Record Dates:  June 1 and December 1

Dated:  _______________, ____

                                           INTERNATIONAL SPECIALTY HOLDINGS INC.

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

This is one of the Notes referred to
in the within-mentioned Indenture:

WILMINGTON TRUST COMPANY,
  as Trustee

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

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

                                      A1-1
<PAGE>

                                                                      EXHIBIT A1

                                 [Back of Note]
           10 5/8% [Series A] [Series B] Senior Secured Notes due 2009

         [INSERT  THE  GLOBAL  NOTE  LEGEND,  IF  APPLICABLE   PURSUANT  TO  THE
PROVISIONS OF THE INDENTURE]

         [INSERT THE PRIVATE  PLACEMENT  LEGEND,  IF APPLICABLE  PURSUANT TO THE
PROVISIONS OF THE INDENTURE]

         Capitalized  terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.

         1.  INTEREST.   International   Specialty  Holdings  Inc.,  a  Delaware
corporation (the "Issuer"),  promises to pay interest on the principal amount of
this  Note at 10 5/8% per annum  until  maturity  and  shall pay the  Liquidated
Damages  payable  pursuant  to Section 5 of the  Registration  Rights  Agreement
referred  to  below.  The  Issuer  shall pay  interest  and  Liquidated  Damages
semi-annually in arrears on June 15 and December 15 of each year, or if any such
day is not a  Business  Day,  on the next  succeeding  Business  Day  (each,  an
"Interest Payment Date"). Interest on this Note will accrue from the most recent
date to which interest has been paid or, if no interest has been paid,  from the
date of issuance;  PROVIDED that if there is no existing  Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; PROVIDED,  FURTHER, that
the first Interest Payment Date shall be the first of June 15 and December 15 to
occur after the date of  issuance,  unless  such June 15 and  December 15 occurs
within  one  calendar  month of such date of  issuance,  in which case the first
Interest  Payment  Date shall be the second of June 15 and  December 15 to occur
after  the  date  of  issuance.   The  Issuer  shall  pay  interest   (including
post-petition  interest in any proceeding  under any Bankruptcy  Law) on overdue
principal and premium,  if any, from time to time on demand at a rate that is 1%
per  annum in  excess  of the rate  then in  effect;  they  shall  pay  interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue  installments of interest and Liquidated  Damages (without regard to any
applicable  grace  periods)  from time to time on demand at the same rate to the
extent  lawful.  Interest  will be  computed  on the basis of a 360-day  year of
twelve 30-day months.

         2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes (except
defaulted  interest) and  Liquidated  Damages to the Persons who are  registered
Holders  of Notes at the  close of  business  on the June 1 or  December  1 next
preceding the Interest  Payment Date, even if such Notes are canceled after such
record date and on or before such Interest  Payment Date,  except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium and Liquidated Damages, if any, and interest
at the office or agency of the Issuer  maintained  for such  purpose  or, at the
option of the Issuer,  payment of interest and Liquidated Damages may be made by
check  mailed to the  Holders at their  addresses  set forth in the  register of
Holders;  PROVIDED that payment by wire transfer of immediately  available funds
will be  required  with  respect  to  principal  of and  interest,  premium  and
Liquidated Damages on, all Global Notes and all other Notes the Holders of which
shall  have  provided  wire  transfer  instructions  to the Issuer or the Paying
Agent.  Such payment  shall be 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.

         3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust Company, the
Trustee under the Indenture,  will act as Paying Agent and Registrar. The Issuer
may change any Paying  Agent or  Registrar  without  notice to any  Holder.  The
Issuer or any of its Subsidiaries may act in any such capacity.

         4.  INDENTURE.  The Issuer issued the Notes under an Indenture dated as
of December 13, 2001 (as amended from time to time, the "Indenture") between the
Issuer  and the  Trustee.  The terms of the

                                      A1-1
<PAGE>

Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders ARE referred
to the Indenture  and such Act for a statement of such terms.  To the extent any
provision of this Note conflicts  with the express  provisions of the Indenture,
the provisions of the Indenture shall govern and be  controlling.  The Notes are
obligations of the Issuer unlimited in aggregate principal amount.

         5. OPTIONAL REDEMPTION.

         (a) Except as set forth in clause (b) of this  Paragraph  5, the Issuer
shall not have the option to redeem the Notes pursuant to this Paragraph 5 prior
to December  15,  2005.  Thereafter,  the Issuer may redeem all or a part of the
notes  upon not less than 30 nor more than 60 days'  notice,  at the  redemption
prices  (expressed  as  percentages  of  principal  amount) set forth below plus
accrued  and  unpaid  interest  and  Liquidated  Damages,  if any,  on the notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on December 15 of the years indicated below:

        YEAR                                                    PERCENTAGE
        ----                                                    ----------
        2005.................................................    105.313%
        2006.................................................    103.542%
        2007.................................................    101.771%
        2008 and thereafter..................................    100.000%

         (b)  Notwithstanding  the provisions of clause (a) of this Paragraph 5,
at any time  prior to  December  15,  2004,  the  Issuer  may on any one or more
occasions redeem up to 35% of the aggregate principal amount of notes originally
issued under the  Indenture at a redemption  price of 110.625% of the  principal
amount,  plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption  date,  with the net cash  proceeds of one or more Equity  Offerings;
PROVIDED  that (1) at  least  65% of the  aggregate  principal  amount  of Notes
originally issued under the Indenture remains outstanding  immediately after the
occurrence  of such  redemption  (excluding  notes  held by the  Issuer  and its
Affiliates);  and (2) notice of the  redemption  is given  within 30 days of the
date of the closing of such Equity Offering.

         6. MANDATORY REDEMPTION.

         Except as set  forth in  paragraph  7 below,  the  Issuer  shall not be
required to make  mandatory  redemption or sinking fund payments with respect to
the Notes.

         7. REPURCHASE AT OPTION HOLDER.

         (a) Upon the  occurrence  of a Change of Control,  the Issuer  shall be
required  to make an offer (a  "Change  of  Control  Offer")  to each  Holder to
repurchase all or any part (equal to $1,000 or an integral  multiple thereof) of
each Holder's  Notes (other than Notes  previously  called for  redemption) at a
purchase  price equal to 101% of the  aggregate  principal  amount  thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, on the Notes
repurchased to the date of purchase (the "Change of Control Payment"). Within 30
days  following  any Change of Control,  the Issuer  shall mail a notice to each
Holder  setting  forth the  procedures  governing the Change of Control Offer as
required by the Indenture.

         (b) Any net proceeds  from Asset Sales that are not applied as provided
in the Indenture  will  constitute  "Asset Sales  Proceeds."  When the aggregate
amount of Asset Sale Proceeds exceeds the Threshold Amount, the Issuer will make
an  Asset  Sale  Offer  to all  Holders  of  Notes  and  all  holders  of

                                      A1-2
<PAGE>

other  Indebtedness  that is pari  passu  with the Notes  containing  provisions
similar to those set forth in this  Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets to purchase the maximum principal
amount of Notes and such other pari passu Indebtedness that may be purchased out
of the excess of such Asset Sale Proceeds over the Threshold Amount (such excess
being referred to herein as the "EXCESS PROCEEDS");  PROVIDED, HOWEVER, that (i)
the Issuer will not be obligated to make an Asset Sale Offer until the aggregate
amount of Excess Proceeds exceeds $5.0 million and (ii) Net Proceeds received by
a Restricted  Subsidiary  that is subject to a  contractual  restriction  on its
ability to dividend such Net Proceeds to the Issuer will not  constitute  Excess
Proceeds for so long as such restriction  would either prohibit such dividend or
reduce the amount of other dividends  payable to the Issuer.  The offer price in
any Asset Sale Offer will be equal to 100% of the principal  amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon,  if any, to the date
fixed for the closing of such offer, in accordance with the procedures set forth
in the  Indenture  and will be payable in cash. To the extent that the aggregate
amount of Notes (including any Additional  Notes) tendered  pursuant to an Asset
Sale Offer is less than the  Excess  Proceeds,  the  Issuer (or such  Restricted
Subsidiary) may use such deficiency for any purpose not otherwise  prohibited by
the Indenture. If the aggregate principal amount of Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee will select the Notes
to be purchased on a PRO RATA basis. Holders of Notes that are the subject of an
offer to purchase  will receive an Asset Sale Offer from the Issuer prior to any
related  purchase date and may elect to have such Notes  purchased by completing
the form  entitled  "Option of Holder to Elect  Purchase"  on the reverse of the
Notes.

         8. NOTICE OF REDEMPTION.  Notice of redemption  will be mailed at least
30 days but not more than 60 days  before  the  redemption  date to each  Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger  than  $1,000  may be  redeemed  in part but only in whole  multiples  of
$1,000,  unless  all of the Notes held by a Holder  are to be  redeemed.  On and
after the  redemption  date interest and  Liquidated  Damages,  if any ceases to
accrue on Notes or portions thereof called for redemption.

         9. DENOMINATIONS,  TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be  registered  and Notes may be  exchanged as provided in
the Indenture.  The Registrar and the Trustee may require a Holder,  among other
things,  to furnish  appropriate  endorsements  and transfer  documents  and the
Issuer  may  require  a Holder  to pay any  taxes  and fees  required  by law or
permitted  by the  Indenture.  The Issuer  need not  exchange  or  register  the
transfer of any Note or portion of a Note  selected for  redemption,  except for
the unredeemed portion of any Note being redeemed in part. Also, the Issuer need
not exchange or register the transfer of any Notes during a period  beginning at
the opening of  business  15 days  before the day of a selection  of Notes to be
redeemed  and ending at the close of business on the day of  selection or during
the period between a record date and the next succeeding Interest Payment Date.

         10.  PERSONS  DEEMED  OWNERS.  The  registered  Holder of a Note may be
treated as its owner for all purposes.

         11. AMENDMENT,  SUPPLEMENT AND WAIVER.  Subject to certain  exceptions,
the Indenture,  the Pledge Agreement or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority  in  principal  amount of
the then  outstanding  Notes and Additional  Notes,  if any,  voting as a single
class,  and any  existing  default  or  compliance  with  any  provision  of the
Indenture,  the Pledge  Agreement or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding  Notes and
Additional  Notes, if any, voting as a single class.  Without the consent of any
Holder  of a Note,  the  Indenture,  the  Pledge  Agreement  or the Notes may be
amended or  supplemented  to cure any  ambiguity,  defect or  inconsistency,  to
provide for  uncertificated  Notes in  addition  to or in place of  certificated
Notes,  to provide for the assumption of the Issuer's  obligations to

                                      A1-3
<PAGE>

Holders  of the Notes in case of a merger or  consolidation,  to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not  adversely  affect the legal rights under the  Indenture of any
such Holder,  to comply with the  requirements  of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, or to
provide for the issuance of Additional  Notes in accordance with the limitations
set forth in the Indenture.

         12. DEFAULTS AND REMEDIES.  Events of Default include:  (i) default for
30 days in the payment when due of interest or Liquidated  Damages on the Notes;
(ii)  default in payment  when due of  principal  of or premium,  if any, on the
Notes;  (iii) failure by the Issuer to comply with Section 4.10, 4.15 or 5.01 of
the Indenture (unless such provisions are not at the time applicable pursuant to
Section 4.18 of the Indenture); (iv) failure for 30 days by the Issuer to comply
with Section 4.07 or 4.09 of the Indenture  (unless such  provisions  are not at
the time applicable  pursuant to Section 4.18 of the Indenture);  (v) failure by
the Issuer for 60 days after  notice to the Issuer by the Trustee or the Holders
of at least 25% in principal amount of the Notes (including Additional Notes, if
any) then  outstanding  voting as a single  class to comply with  certain  other
agreements in the Indenture or the Pledge  Agreement  (expect as provided in (x)
below);  (vi) default under certain other agreements relating to Indebtedness of
the Issuer which default results in the acceleration of such Indebtedness  prior
to its express maturity;  (vii) certain final judgments for the payment of money
that remain undischarged for a period of 60 days; (vii) the Issuer shall fail to
place the amount contemplated in the Escrow Agreement into the Escrow Account on
December  13,  2001;  or ISP shall  fail to retire the 2003 Notes on or prior to
maturity (ix) certain  events of  bankruptcy  or insolvency  with respect to the
Issuer or any of its Restricted Subsidiaries; and (x) (a) the repudiation by the
Issuer of its obligations under the Pledge Agreement or (b) the unenforceability
of the Pledge Agreement with respect to the validity,  priority or perfection of
the lien created thereby  (whether  through the  unenforceability  of the Pledge
Agreement or otherwise).  If any Event of Default occurs and is continuing,  the
Trustee  or  the  Holders  of at  least  25% in  principal  amount  of the  then
outstanding   Notes  may  declare   all  the  Notes  to  be  due  and   payable.
Notwithstanding  the foregoing,  in the case of an Event of Default arising from
certain events of bankruptcy or insolvency,  all  outstanding  Notes will become
due and payable  without  further action or notice.  Holders may not enforce the
Indenture or the Notes except as provided in the  Indenture.  Subject to certain
limitations,  Holders of a majority in principal  amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power.  The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of  Default  (except a Default or Event of Default  relating  to the  payment of
principal or  interest) if it  determines  that  withholding  notice is in their
interest.  The Holders of a majority in aggregate  principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any  existing  Default or Event of Default and its  consequences
under the  Indenture  except a  continuing  Default  or Event of  Default in the
payment of interest on, or the principal  of, the Notes.  The Issuer is required
to deliver to the Trustee  annually a statement  regarding  compliance  with the
Indenture,  and the Issuer is  required  upon  becoming  aware of any Default or
Event of Default, to deliver to the Trustee a statement  specifying such Default
or Event of Default.

13. TRUSTEE  DEALINGS WITH ISSUER.  The Trustee,  in its individual or any other
capacity,  may become the owner or pledgee of Notes, and may otherwise deal with
the Issuer or their Affiliates,  as if it were not the Trustee.  However, in the
event that the Trustee acquires any conflicting  interest it must eliminate such
conflict within 90 days,  apply to the SEC for permission to continue as trustee
or resign.

14. NO RECOURSE AGAINST OTHERS.  No past,  present or future director,  officer,
employee,  incorporator  or stockholder of the Issuer,  as such,  shall have any
liability for any  obligations of the Issuer under the Notes or the Indenture or
for any claim  based on, in respect  of, or by reason of,  such  obligations  or
their  creation.  Each Holder by  accepting a Note waives and  releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.

                                      A1-4
<PAGE>

         15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.

         16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an  assignee,  such as:  TEN COM (=  tenants  in  common),  TEN ENT (=
tenants by the  entireties),  JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian),  and U/G/M/A (= Uniform Gifts
to Minors Act).

         17.  ADDITIONAL  RIGHTS  OF  HOLDERS  OF  RESTRICTED  GLOBAL  NOTES AND
RESTRICTED  DEFINITIVE  NOTES.  In addition to the rights provided to Holders of
Notes under the  Indenture,  Holders of Restricted  Global Notes and  Restricted
Definitive  Notes  shall  have all the  rights  set  forth  in the A/B  Exchange
Registration  Rights Agreement dated as of December 13, 2001, between the Issuer
and the other parties  named on the  signature  pages thereof or, in the case of
Additional Notes,  Holders of Restricted Global Notes and Restricted  Definitive
Notes  shall  have  the  rights  set  forth in one or more  registration  rights
agreements,  if any, among the Issuer and the other parties thereto, relating to
rights  given  by  the  Issuer  to  the  purchasers  of  any  Additional   Notes
(collectively, the "Registration Rights Agreement").

         18. CUSIP  NUMBERS.  Pursuant to a  recommendation  promulgated  by the
Committee on Uniform Security Identification  Procedures, the Issuer have caused
CUSIP  numbers to be printed on the Notes and the Trustee may use CUSIP  numbers
in notices of redemption as a convenience to Holders.  No representation is made
as to the  accuracy  of such  numbers  either  as  printed  on the  Notes  or as
contained  in any notice of  redemption  and  reliance may be placed only on the
other identification numbers placed thereon.

         The Issuer will furnish to any Holder upon written  request and without
charge  a copy  of the  Indenture  and/or  the  Registration  Rights  Agreement.
Requests may be made to:

International Specialty Holdings Inc.
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
Attention:  General Counsel

                                      A1-5
<PAGE>

                                 ASSIGNMENT FORM

         To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:
                                               ---------------------------------
                                                 (Insert assignee's legal name)

--------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)

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

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

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

--------------------------------------------------------------------------------
              (Print or type assignee's name, address and zip code)

and irrevocably appoint
                        --------------------------------------------------------
to transfer this Note on the books of the Issuer.  The agent may substitute
another to act for him.

Date:  _______________

                  Your Signature:
                                   ---------------------------------------------
                  (Sign exactly as your name appears on the face of this Note)

Signature Guarantee*:  _________________________

* Participant in a recognized  Signature  Guarantee  Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                      A1-6
<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Issuer pursuant
to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:

                        Section 4.10           Section 4.15

         If you want to elect to have  only  part of the Note  purchased  by the
Issuer  pursuant to Section  4.10 or Section  4.15 of the  Indenture,  state the
amount you elect to have purchased:

                                                 $
                                                  ---------------

Date:  _______________

                  Your Signature:
                                   ---------------------------------------------
                    (Sign exactly as your name appears on the face of this Note)

                  Tax Identification No.:
                                           -------------------------------------

Signature Guarantee*:  _________________________

* Participant in a recognized  Signature  Guarantee  Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                      A1-7
<PAGE>

             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

         The  following  exchanges of a part of this Global Note for an interest
in another  Global Note or for a  Definitive  Note,  or  exchanges  of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:

<TABLE>
<CAPTION>
                                                                      Principal Amount of
                       Amount of decrease                              this Global Note         Signature of
                       in Principal Amount   Amount of increase in      following such       authorized officer
                               of             Principal Amount of          decrease             of Trustee or
Date of Exchange        this Global Note        this Global Note         (or Increase)            Custodian
----------------        ----------------        ----------------         -------------            ---------
<S>                      <C>                    <C>                       <C>                     <C>

</TABLE>

* THIS SCHEDULE SHOULD BE INCLUDED ONLY IF THE NOTE IS ISSUED IN GLOBAL FORM.

                                      A1-8
<PAGE>

                                                                      EXHIBIT A2

                  [Face of Regulation S Temporary Global Note]
--------------------------------------------------------------------------------
                                                           CUSIP/CINS __________

           10 5/8% [Series A] [Series B] Senior Secured Notes due 2009

No. ___                                                              $__________

                      INTERNATIONAL SPECIALTY HOLDINGS INC.

promises to pay to
                   -------------------------------------------------------------

or registered assigns,

the principal sum of
                     -----------------------------------------------------------

Dollars on December 15, 2009.

Interest Payment Dates:  June 15 and December 15

Record Dates: June 1 and December 1

Dated:  _______________, ____

                                           INTERNATIONAL SPECIALTY HOLDINGS INC.

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

This is one of the Notes referred to
in the within-mentioned Indenture:

WILMINGTON TRUST COMPANY,
  as Trustee

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

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

                                      A2-1
<PAGE>

                  [Back of Regulation S Temporary Global Note]
           10 5/8% [Series A] [Series B] Senior Secured Notes due 2009

THE RIGHTS  ATTACHING  TO THIS  REGULATION  S  TEMPORARY  GLOBAL  NOTE,  AND THE
CONDITIONS AND PROCEDURES  GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED  IN THE  INDENTURE  (AS  DEFINED  HEREIN).  NEITHER THE HOLDER NOR THE
BENEFICIAL  OWNERS OF THIS REGULATION S TEMPORARY  GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.

UNLESS  AND UNTIL IT IS  EXCHANGED  IN WHOLE OR IN PART FOR NOTES IN  DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED  EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER  NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR  DEPOSITARY  OR A NOMINEE OF SUCH  SUCCESSOR  DEPOSITARY.  UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER  STREET,  NEW YORK,  NEW YORK)  ("DTC"),  TO THE ISSUER OR ITS
AGENT FOR  REGISTRATION  OF TRANSFER,  EXCHANGE OR PAYMENT,  AND ANY CERTIFICATE
ISSUED  IS  REGISTERED  IN THE NAME OF CEDE & CO. OR SUCH  OTHER  NAME AS MAY BE
REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC (AND ANY PAYMENT IS MADE TO
CEDE  & CO.  OR  SUCH  OTHER  ENTITY  AS  MAY  BE  REQUESTED  BY  AN  AUTHORIZED
REPRESENTATIVE  OF DTC),  ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL  INASMUCH  AS THE  REGISTERED  OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE SECURITY (OR ITS PREDECESSOR)  EVIDENCED  HEREBY WAS ORIGINALLY  ISSUED IN A
TRANSACTION  EXEMPT  FROM  REGISTRATION  UNDER  SECTION 5 OF THE  UNITED  STATES
SECURITIES  ACT OF 1933,  AS AMENDED (THE  "SECURITIES  ACT"),  AND THE SECURITY
EVIDENCED  HEREBY  MAY NOT BE  OFFERED,  SOLD OR  OTHERWISE  TRANSFERRED  IN THE
ABSENCE  OF  SUCH  REGISTRATION  OR  AN  APPLICABLE  EXEMPTION  THEREFROM.  EACH
PURCHASER OF THE SECURITY  EVIDENCED  HEREBY IS HEREBY  NOTIFIED THAT THE SELLER
MAY BE  RELYING  ON THE  EXEMPTION  FROM  THE  PROVISIONS  OF  SECTION  5 OF THE
SECURITIES  ACT  PROVIDED BY RULE 144A  THEREUNDER.  THE HOLDER OF THE  SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) (a) IN THE UNITED STATES TO
A PERSON WHO THE SELLER REASONABLY  BELIEVES IS A QUALIFIED  INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION  MEETING THE
REQUIREMENTS  OF RULE  144A,  (b)  OUTSIDE  THE  UNITED  STATES  IN AN  OFFSHORE
TRANSACTION  IN  ACCORDANCE  WITH RULE 904 UNDER THE  SECURITIES  ACT,  (c) IN A
TRANSACTION  MEETING THE  REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (d)
TO AN INSTITUTIONAL  "ACCREDITED  INVESTOR" (AS DEFINED IN RULE 501 (a)(1), (2),
(3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR")) THAT,
PRIOR TO SUCH  TRANSFER,  FURNISHES  THE  REGISTRAR A SIGNED  LETTER  CONTAINING
CERTAIN  REPRESENTATIONS  AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM
THE  REGISTRAR)  AND, IF SUCH  TRANSFER IS IN RESPECT OF AN AGGREGATE  PRINCIPAL
AMOUNT OF NOTES LESS THAN  $250,000,  AN OPINION

                                      A2-2
<PAGE>

OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS  OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
ISSUER  SO  REQUEST),  (2)  TO  THE  ISSUER  OR  (3)  PURSUANT  TO AN  EFFECTIVE
REGISTRATION  STATEMENT  AND, IN EACH CASE,  IN ACCORDANCE  WITH ANY  APPLICABLE
SECURITIES  LAWS OF ANY  STATE OF THE  UNITED  STATES  OR ANY  OTHER  APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY  PURCHASER  FROM IT OF THE  SECURITY  EVIDENCED  HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.

         Capitalized  terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.

1. INTEREST.  International Specialty Holdings Inc., a Delaware corporation (the
"Issuer"),  promises to pay interest on the principal  amount of this Note at 10
5/8% per annum  until  maturity  and shall pay the  Liquidated  Damages  payable
pursuant to Section 5 of the Registration  Rights  Agreement  referred to below.
The Issuer shall pay interest and Liquidated Damages semi-annually in arrears on
June 15 and December 15 of each year,  or if any such day is not a Business Day,
on the next succeeding Business Day (each, an "Interest Payment Date"). Interest
on this Note will accrue from the most  recent date to which  interest  has been
paid or, if no interest has been paid, from the date of issuance;  PROVIDED that
if there is no existing Default in the payment of interest,  and if this Note is
authenticated  between a record date referred to on the face hereof and the next
succeeding   Interest  Payment  Date,  interest  shall  accrue  from  such  next
succeeding  Interest Payment Date;  PROVIDED,  FURTHER,  that the first Interest
Payment  Date shall be the first of June 15 and  December  15 to occur after the
date of issuance, unless such June 15 and December 15 occurs within one calendar
month of such date of issuance,  in which case the first  Interest  Payment Date
shall  be the  second  of June 15 and  December  15 to occur  after  the date of
issuance. The Issuer shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue  principal and premium,  if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; they shall pay interest (including post-petition interest in any
proceeding  under any Bankruptcy  Law) on overdue  installments  of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful.  Interest will be computed
on the basis of a 360-day year of twelve 30-day months.

         Until this  Regulation S Temporary  Global Note is exchanged for one or
more  Regulation  S  Permanent  Global  Notes,  the Holder  hereof  shall not be
entitled to receive  payments of interest  hereon;  until so  exchanged in full,
this Regulation S Temporary  Global Note shall in all other respects be entitled
to the same benefits as other Notes under the Indenture.

         2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes (except
defaulted  interest) and  Liquidated  Damages to the Persons who are  registered
Holders  of Notes at the  close of  business  on the June 1 or  December  1 next
preceding the Interest  Payment Date, even if such Notes are canceled after such
record date and on or before such Interest  Payment Date,  except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium and Liquidated Damages, if any, and interest
at the office or agency of the Issuer  maintained  for such  purpose  or, at the
option of the Issuer,  payment of interest and Liquidated Damages may be made by
check  mailed to the  Holders at their  addresses  set forth in the  register of
Holders;  PROVIDED that payment by wire transfer of immediately  available funds
will be  required  with  respect  to  principal  of and  interest,  premium  and
Liquidated Damages on, all Global Notes and all other Notes the Holders of which
shall  have  provided  wire  transfer  instructions  to the Issuer or the Paying
Agent.  Such payment  shall be 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.

                                      A2-3
<PAGE>

         3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust Company, the
Trustee under the Indenture,  will act as Paying Agent and Registrar. The Issuer
may change any Paying  Agent or  Registrar  without  notice to any  Holder.  The
Issuer or any of its Subsidiaries may act in any such capacity.

         4.  INDENTURE.  The Issuer issued the Notes under an Indenture dated as
of December 13, 2001 (as amended from time to time, the "Indenture") between the
Issuer  and the  Trustee.  The terms of the Notes  include  those  stated in the
Indenture  and  those  made  part of the  Indenture  by  reference  to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb).  The Notes
are subject to all such terms,  and Holders ARE  referred to the  Indenture  and
such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express  provisions of the  Indenture,  the provisions of the
Indenture  shall govern and be  controlling.  The Notes are  obligations  of the
Issuer unlimited in aggregate principal amount.

         5. OPTIONAL REDEMPTION.

         (c) (a)  Except  as set forth in clause  (b) of this  Paragraph  5, the
Issuer shall not have the option to redeem the Notes  pursuant to this Paragraph
5 prior to December 15, 2005. Thereafter, the Issuer may redeem all or a part of
the notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices  (expressed  as  percentages  of  principal  amount) set forth below plus
accrued  and  unpaid  interest  and  Liquidated  Damages,  if any,  on the notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on December 15 of the years indicated below:

         YEAR                                                   PERCENTAGE
         ----                                                   ----------
         2005.................................................   105.313%
         2006.................................................   103.542%
         2007.................................................   101.771%
         2008 and thereafter..................................   100.000%

         (b)  Notwithstanding  the provisions of clause (a) of this Paragraph 5,
at any time  prior to  December  15,  2004,  the  Issuer  may on any one or more
occasions redeem up to 35% of the aggregate principal amount of notes originally
issued under the  Indenture at a redemption  price of 110.625% of the  principal
amount,  plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption  date,  with the net cash  proceeds of one or more Equity  Offerings;
PROVIDED  that (1) at  least  65% of the  aggregate  principal  amount  of Notes
originally issued under the Indenture remains outstanding  immediately after the
occurrence  of such  redemption  (excluding  notes  held by the  Issuer  and its
Affiliates);  and (2) notice of the  redemption  is given  within 30 days of the
date of the closing of such Equity Offering.

         6. MANDATORY REDEMPTION.

         Except as set  forth in  paragraph  7 below,  the  Issuer  shall not be
required to make  mandatory  redemption or sinking fund payments with respect to
the Notes.

         7. REPURCHASE AT OPTION OF HOLDER.

(a) Upon the occurrence of a Change of Control,  the Issuer shall be required to
make an offer (a "Change of Control  Offer") to each Holder to repurchase all or
any part (equal to $1,000 or an  integral  multiple  thereof)  of each  Holder's
Notes (other than Notes  previously  called for  redemption) at a purchase price
equal to 101% of the aggregate  principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, on the Notes repurchased to the
date of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control,  the Issuer shall mail a notice to

                                      A2-4
<PAGE>

each Holder setting forth the  procedures  governing the Change of Control Offer
as required by the Indenture.

         (b) Any net proceeds  from Asset Sales that are not applied as provided
in the  Indenture  will  constitute  "Asset Sale  Proceeds."  When the aggregate
amount of Asset Sale Proceeds exceeds the Threshold Amount, the Issuer will make
an  Asset  Sale  Offer  to all  Holders  of  Notes  and  all  holders  of  other
Indebtedness that is pari passu with the Notes containing  provisions similar to
those set forth in this  Indenture  with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount of
Notes and such other pari passu  Indebtedness  that may be purchased  out of the
excess of such Asset Sale Proceeds over the Threshold  Amount (such excess being
referred to herein as the "EXCESS PROCEEDS");  PROVIDED,  HOWEVER,  that (i) the
Issuer will not be  obligated  to make an Asset Sale Offer  until the  aggregate
amount of Excess Proceeds exceeds $5.0 million and (ii) Net Proceeds received by
a Restricted  Subsidiary  that is subject to a  contractual  restriction  on its
ability to dividend such Net Proceeds to the Issuer will not  constitute  Excess
Proceeds for so long as such restriction  would either prohibit such dividend or
reduce the amount of other dividends  payable to the Issuer.  The offer price in
any Asset Sale Offer will be equal to 100% of the principal  amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon,  if any, to the date
fixed for the closing of such offer, in accordance with the procedures set forth
in the  Indenture  and will be payable in cash. To the extent that the aggregate
amount of Notes (including any Additional  Notes) tendered  pursuant to an Asset
Sale Offer is less than the  Excess  Proceeds,  the  Issuer (or such  Restricted
Subsidiary) may use such deficiency for any purpose not otherwise  prohibited by
the Indenture. If the aggregate principal amount of Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee will select the Notes
to be purchased on a PRO RATA basis. Holders of Notes that are the subject of an
offer to purchase  will receive an Asset Sale Offer from the Issuer prior to any
related  purchase date and may elect to have such Notes  purchased by completing
the form  entitled  "Option of Holder to Elect  Purchase"  on the reverse of the
Notes.

         8. NOTICE OF REDEMPTION.  Notice of redemption  will be mailed at least
30 days but not more than 60 days  before  the  redemption  date to each  Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger  than  $1,000  may be  redeemed  in part but only in whole  multiples  of
$1,000,  unless  all of the Notes held by a Holder  are to be  redeemed.  On and
after the redemption  date interest and Liquidated  Damages,  if any,  ceases to
accrue on Notes or portions thereof called for redemption.

         9. DENOMINATIONS,  TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be  registered  and Notes may be  exchanged as provided in
the Indenture.  The Registrar and the Trustee may require a Holder,  among other
things,  to furnish  appropriate  endorsements  and transfer  documents  and the
Issuer  may  require  a Holder  to pay any  taxes  and fees  required  by law or
permitted  by the  Indenture.  The Issuer  need not  exchange  or  register  the
transfer of any Note or portion of a Note  selected for  redemption,  except for
the unredeemed portion of any Note being redeemed in part. Also, the Issuer need
not exchange or register the transfer of any Notes during a period  beginning at
the opening of  business  15 days  before the day of a selection  of Notes to be
redeemed  and ending at the close of business on the day of  selection or during
the period between a record date and the next succeeding Interest Payment Date.

         This Regulation S Temporary  Global Note is exchangeable in whole or in
part for one or more Global  Notes only (i) on or after the  termination  of the
40-day restricted period (as defined in Regulation S) and (ii) upon presentation
of certificates  (accompanied by an Opinion of Counsel, if applicable)  required
by Article 2 of the  Indenture.  Upon  exchange of this  Regulation  S Temporary
Global  Note  for one or more  Global  Notes,  the  Trustee  shall  cancel  this
Regulation S Temporary Global Note.

                                      A2-5
<PAGE>

         10.  PERSONS  DEEMED  OWNERS.  The  registered  Holder of a Note may be
treated as its owner for all purposes.

         11. AMENDMENT,  SUPPLEMENT AND WAIVER.  Subject to certain  exceptions,
the Indenture,  the Pledge Agreement or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority  in  principal  amount of
the then  outstanding  Notes and Additional  Notes,  if any,  voting as a single
class,  and any  existing  default  or  compliance  with  any  provision  of the
Indenture,  the Pledge  Agreement or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding  Notes and
Additional  Notes, if any, voting as a single class.  Without the consent of any
Holder  of a Note,  the  Indenture,  the  Pledge  Agreement  or the Notes may be
amended or  supplemented  to cure any  ambiguity,  defect or  inconsistency,  to
provide for  uncertificated  Notes in  addition  to or in place of  certificated
Notes,  to provide for the assumption of the Issuer's  obligations to Holders of
the Notes in case of a merger or  consolidation,  to make any change  that would
provide  any  additional  rights or benefits to the Holders of the Notes or that
does not  adversely  affect the legal  rights  under the  Indenture  of any such
Holder,  to  comply  with the  requirements  of the SEC in order  to  effect  or
maintain the qualification of the Indenture under the Trust Indenture Act, or to
provide for the issuance of Additional  Notes in accordance with the limitations
set forth in the Indenture.

         12. DEFAULTS AND REMEDIES.  Events of Default include:  (i) default for
30 days in the payment when due of interest or Liquidated  Damages on the Notes;
(ii)  default in payment  when due of  principal  of or premium,  if any, on the
Notes;  (iii) failure by the Issuer to comply with Section 4.10, 4.15 or 5.01 of
the Indenture (unless such provisions are not at the time applicable pursuant to
Section 4.18 of the Indenture); (iv) failure for 30 days by the Issuer to comply
with Section 4.07 or 4.09 of the Indenture  (unless such  provisions  are not at
the time applicable  pursuant to Section 4.18 of the Indenture);  (v) failure by
the Issuer for 60 days after  notice to the Issuer by the Trustee or the Holders
of at least 25% in principal amount of the Notes (including Additional Notes, if
any) then  outstanding  voting as a single  class to comply with  certain  other
agreements in the Indenture or the Pledge  Agreement  (expect as provided in (x)
below);  (vi) default under certain other agreements relating to Indebtedness of
the Issuer which default results in the acceleration of such Indebtedness  prior
to its express maturity;  (vii) certain final judgments for the payment of money
that remain undischarged for a period of 60 days; (vii) the Issuer shall fail to
place the amount contemplated in the Escrow Agreement into the Escrow Account on
December  13,  2001;  or ISP shall  fail to retire the 2003 Notes on or prior to
maturity (ix) certain  events of  bankruptcy  or insolvency  with respect to the
Issuer or any of its Restricted Subsidiaries; and (x) (a) the repudiation by the
Issuer of its obligations under the Pledge Agreement or (b) the unenforceability
of the Pledge Agreement with respect to the validity,  priority or perfection of
the lien created thereby  (whether  through the  unenforceability  of the Pledge
Agreement or otherwise).  If any Event of Default occurs and is continuing,  the
Trustee  or  the  Holders  of at  least  25% in  principal  amount  of the  then
outstanding   Notes  may  declare   all  the  Notes  to  be  due  and   payable.
Notwithstanding  the foregoing,  in the case of an Event of Default arising from
certain events of bankruptcy or insolvency,  all  outstanding  Notes will become
due and payable  without  further action or notice.  Holders may not enforce the
Indenture or the Notes except as provided in the  Indenture.  Subject to certain
limitations,  Holders of a majority in principal  amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power.  The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of  Default  (except a Default or Event of Default  relating  to the  payment of
principal or  interest) if it  determines  that  withholding  notice is in their
interest.  The Holders of a majority in aggregate  principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any  existing  Default or Event of Default and its  consequences
under the  Indenture  except a  continuing  Default  or Event of  Default in the
payment of interest on, or the principal  of, the Notes.  The Issuer is required
to deliver to the Trustee  annually a statement  regarding  compliance  with the
Indenture,  and the Issuer is  required  upon  becoming  aware of any Default or
Event of Default, to deliver to the Trustee a statement  specifying such Default
or Event of Default.

                                      A2-6
<PAGE>

         13. TRUSTEE DEALINGS WITH ISSUER. The Trustee, in its individual or any
other  capacity,  may become the owner or pledgee of the Notes and may otherwise
deal  with the  Issuer  or  their  Affiliates,  as if it were  not the  Trustee.
However, in the event that the Trustee acquires any conflicting interest it must
eliminate  such  conflict  within 90 days,  apply to the SEC for  permission  to
continue as trustee or resign.

         14. NO RECOURSE  AGAINST OTHERS.  No past,  present or future director,
officer,  employee,  incorporator or stockholder of the Issuer,  as such,  shall
have any  liability  for any  obligations  of the Issuer  under the Notes or the
Indenture  or for any claim  based  on, in  respect  of, or by reason  of,  such
obligations  or their  creation.  Each  Holder by  accepting  a Note  waives and
releases  all  such   liability.   The  waiver  and  release  are  part  of  the
consideration for the issuance of the Notes.

         15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.

         16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an  assignee,  such as:  TEN COM (=  tenants  in  common),  TEN ENT (=
tenants by the  entireties),  JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian),  and U/G/M/A (= Uniform Gifts
to Minors Act).

         17.  ADDITIONAL  RIGHTS  OF  HOLDERS  OF  RESTRICTED  GLOBAL  NOTES AND
RESTRICTED  DEFINITIVE  NOTES.  In addition to the rights provided to Holders of
Notes under the  Indenture,  Holders of Restricted  Global Notes and  Restricted
Definitive  Notes  shall  have all the  rights  set  forth  in the A/B  Exchange
Registration  Rights Agreement dated as of December 13, 2001, between the Issuer
and the other parties  named on the  signature  pages thereof or, in the case of
Additional Notes,  Holders of Restricted Global Notes and Restricted  Definitive
Notes  shall  have  the  rights  set  forth in one or more  registration  rights
agreements,  if any, among the Issuer and the other parties thereto, relating to
rights  given  by  the  Issuer  to  the  purchasers  of  any  Additional   Notes
(collectively, the "Registration Rights Agreement").

         18. CUSIP  NUMBERS.  Pursuant to a  recommendation  promulgated  by the
Committee on Uniform Security Identification  Procedures, the Issuer have caused
CUSIP  numbers to be printed on the Notes and the Trustee may use CUSIP  numbers
in notices of redemption as a convenience to Holders.  No representation is made
as to the  accuracy  of such  numbers  either  as  printed  on the  Notes  or as
contained  in any notice of  redemption  and  reliance may be placed only on the
other identification numbers placed thereon.

         The Issuer will furnish to any Holder upon written  request and without
charge  a copy  of the  Indenture  and/or  the  Registration  Rights  Agreement.
Requests may be made to:

International Specialty Holdings Inc.
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
Attention:  General Counsel

                                      A2-7
<PAGE>

                                 ASSIGNMENT FORM

         To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:
                                               ---------------------------------
                                                 (Insert assignee's legal name)

--------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)

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

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

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

--------------------------------------------------------------------------------
              (Print or type assignee's name, address and zip code)

and irrevocably appoint
                        --------------------------------------------------------
to transfer this Note on the books of the Issuer. The agent may substitute
another to act for him.

Date:  _______________

                  Your Signature:
                                   ---------------------------------------------
                    (Sign exactly as your name appears on the face of this Note)

Signature Guarantee*:  _________________________

* Participant in a recognized  Signature  Guarantee  Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                      A2-8
<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Issuer pursuant
to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:

                            Section 4.10       Section 4.15

         If you want to elect to have  only  part of the Note  purchased  by the
Issuer  pursuant to Section  4.10 or Section  4.15 of the  Indenture,  state the
amount you elect to have purchased:

                                                 $---------------

Date:  _______________

                 Your Signature:
                                  ---------------------------------------------
                   (Sign exactly as your name appears on the face of this Note)

                 Tax Identification No.:
                                        ---------------------------------------

Signature Guarantee*:  _________________________

* Participant in a recognized  Signature  Guarantee  Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                      A2-9
<PAGE>

           SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE

         The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:

<TABLE>
<CAPTION>
                                                                      Principal Amount of
                       Amount of decrease                              this Global Note         Signature of
                       in Principal Amount   Amount of increase in      following such       authorized officer
                               of             Principal Amount of          decrease             of Trustee or
Date of Exchange        this Global Note        this Global Note         (or Increase)            Custodian
----------------        ----------------        ----------------         -------------            ---------
<S>                      <C>                        <C>                     <C>                      <C>

</TABLE>

                                     A2-10
<PAGE>

                                                                       EXHIBIT B
                         FORM OF CERTIFICATE OF TRANSFER

International Specialty Holdings Inc.
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
Attention:  General Counsel

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890

Attention:  Corporate Trust Division

         Re:  10 5/8% [SERIES A] [SERIES B] SENIOR SECURED NOTES DUE 2009

         Reference  is hereby made to the  Indenture,  dated as of December  13,
2001 (as amended  from time to time,  the  "INDENTURE"),  between  International
Specialty  Holdings Inc., as issuer (the "ISSUER") and Wilmington Trust Company,
as  trustee.  Capitalized  terms  used but not  defined  herein  shall  have the
meanings given to them in the Indenture.

         ___________________,  (the  "TRANSFEROR") owns and proposes to transfer
the Note[s] or  interest in such  Note[s]  specified  in Annex A hereto,  in the
principal amount of $___________ in such Note[s] or interests (the  "TRANSFER"),
to ___________________________ (the "TRANSFEREE"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:

                             [CHECK ALL THAT APPLY]

         1.  [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected  pursuant to and in accordance with Rule 144A under the United
States  Securities  Act  of  1933,  as  amended  (the  "SECURITIES  ACT"),  and,
accordingly,  the  Transferor  hereby  further  certifies  that  the  beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably  believed  and  believes is  purchasing  the  beneficial  interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a  "qualified  institutional  buyer"  within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance  with any applicable  blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture,  the transferred  beneficial interest or Definitive Note
will be  subject to the  restrictions  on  transfer  enumerated  in the  Private
Placement  Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.

         2.  [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE  TEMPORARY  REGULATION S GLOBAL NOTE,  THE  REGULATION S GLOBAL NOTE OR A
DEFINITIVE  NOTE  PURSUANT  TO  REGULATION  S. The  Transfer  is being  effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly,  the Transferor hereby further certifies that (i) the Transfer
is not being made to a Person in the  United  States and (x) at the time the buy
order was  originated,  the  Transferee  was outside  the United  States or such
Transferor and any Person acting on its behalf reasonably  believed and believes
that the  Transferee  was outside the United States or (y) the  transaction  was
executed in, on or through the  facilities of a designated  offshore  securities
market and neither  such  Transferor  nor any Person  acting on its behalf knows
that the transaction was prearranged with a buyer in

                                      B-1
<PAGE>

the  United  States,  (ii)  no  directed  selling  efforts  have  been  made  in
contravention  of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities  Act, (iii) the transaction is not part of a plan or scheme
to evade the  registration  requirements  of the  Securities Act and (iv) if the
proposed  transfer  is being  made  prior to the  expiration  of the  Restricted
Period,  the  transfer is not being made to a U.S.  Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of
the  proposed  transfer  in  accordance  with the  terms of the  Indenture,  the
transferred  beneficial  interest  or  Definitive  Note will be  subject  to the
restrictions on Transfer  enumerated in the Private  Placement Legend printed on
the Regulation S Global Note, the Temporary  Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.

         3.  [ ] CHECK  AND  COMPLETE  IF  TRANSFEREE  WILL TAKE  DELIVERY  OF A
BENEFICIAL  INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION  OF THE  SECURITIES  ACT OTHER  THAN RULE  144A OR  REGULATION  S. The
Transfer  is  being  effected  in  compliance  with  the  transfer  restrictions
applicable to beneficial  interests in  Restricted  Global Notes and  Restricted
Definitive  Notes and pursuant to and in accordance  with the Securities Act and
any applicable blue sky securities  laws of any state of the United States,  and
accordingly the Transferor hereby further certifies that (check one):

                 (a)  [ ] such  Transfer i s being  effected  pursuant to and in
             accordance with Rule 144 under the Securities Act;

                                       or

                 (b)  [ ] such Transfer is  being effected to  the Issuer  or  a
             subsidiary thereof;

                                       or

                 (c)  [ ] such  Transfer  is  being  effected   pursuanT  to  an
             effective  registration  statement  under the Securities Act and in
             compliance  with  the  prospectus  delivery   requirements  of  the
             Securities Act;

                                       or

                 (d)  [ ] such Transfer is being  effected  to an  Institutional
             Accredited   Investor  and  pursuant  to  an  exemption   from  the
             registration  requirements  of the  Securities  Act other than Rule
             144A,  Rule 144 or Rule  904,  and the  Transferor  hereby  further
             certifies  that  it has not  engaged  in any  general  solicitation
             within the meaning of Regulation D under the Securities Act and the
             Transfer  complies  with the transfer  restrictions  applicable  to
             beneficial  interests  in a  Restricted  Global Note or  Restricted
             Definitive  Notes and the  requirements  of the exemption  claimed,
             which  certification is supported by (1) a certificate  executed by
             the Transferee in the form of Exhibit D to the Indenture and (2) if
             such  Transfer is in respect of a principal  amount of Notes at the
             time of  transfer  of less than  $250,000,  an  Opinion  of Counsel
             provided by the  Transferor or the  Transferee (a copy of which the
             Transferor has attached to this certification),  to the effect that
             such  Transfer  is in  compliance  with the  Securities  Act.  Upon
             consummation of the proposed  transfer in accordance with the terms
             of the Indenture, the transferred beneficial interest or Definitive
             Note will be subject to the restrictions on transfer  enumerated in
             the Private  Placement Legend printed on the IAI Global Note and/or
             the Definitive Notes and in the Indenture and the Securities Act.

         4.  [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

                                      B-2
<PAGE>

                 (a)  [ ] CHECK IF TRANSFER  IS  PURSUANT  TO RULE 144.  (i) The
             Transfer is being effected  pursuant to and in accordance with Rule
             144 under the  Securities  Act and in compliance  with the transfer
             restrictions contained in the Indenture and any applicable blue sky
             securities  laws of any  state of the  United  States  and (ii) the
             restrictions on transfer contained in the Indenture and the Private
             Placement  Legend are not required in order to maintain  compliance
             with the Securities Act. Upon consummation of the proposed Transfer
             in  accordance  with the terms of the  Indenture,  the  transferred
             beneficial interest or Definitive Note will no longer be subject to
             the  restrictions on transfer  enumerated in the Private  Placement
             Legend  printed  on the  Restricted  Global  Notes,  on  Restricted
             Definitive Notes and in the Indenture.

                 (b)  [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
             Transfer is being effected  pursuant to and in accordance with Rule
             903 or Rule 904 under the Securities Act and in compliance with the
             transfer restrictions contained in the Indenture and any applicable
             blue sky securities laws of any state of the United States and (ii)
             the  restrictions  on transfer  contained in the  Indenture and the
             Private  Placement  Legend are not  required  in order to  maintain
             compliance  with  the  Securities  Act.  Upon  consummation  of the
             proposed  Transfer in accordance  with the terms of the  Indenture,
             the  transferred  beneficial  interest or  Definitive  Note will no
             longer be subject to the restrictions on transfer enumerated in the
             Private Placement Legend printed on the Restricted Global Notes, on
             Restricted Definitive Notes and in the Indenture.

                 (c)  [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER  EXEMPTION. (i)
             The Transfer is being effected  pursuant to and in compliance  with
             an exemption from the  registration  requirements of the Securities
             Act other  than Rule  144,  Rule 903 or Rule 904 and in  compliance
             with the transfer  restrictions  contained in the Indenture and any
             applicable  blue sky  securities  laws of any  State of the  United
             States  and (ii) the  restrictions  on  transfer  contained  in the
             Indenture  and the  Private  Placement  Legend are not  required in
             order  to  maintain   compliance  with  the  Securities  Act.  Upon
             consummation of the proposed  Transfer in accordance with the terms
             of the Indenture, the transferred beneficial interest or Definitive
             Note will not be subject to the restrictions on transfer enumerated
             in the Private  Placement  Legend printed on the Restricted  Global
             Notes or Restricted Definitive Notes and in the Indenture.

         This certificate and the statements  contained herein are made for your
benefit and the benefit of the Issuer.

                                               ---------------------------------
                                                  [Insert Name of Transferor]

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

         Dated:  _______________________

                                      B-3
<PAGE>

                  ANNEX A TO CERTIFICATE OF TRANSFER

    1.     The Transferor owns and proposes to transfer the following:

                     [CHECK ONE OF (a) OR (b)]

            (a) a beneficial interest in the:

                     (i)   [ ] 144A Global Note (CUSIP _________), or

                     (ii)  [ ] Regulation S Global Note (CUSIP _________), or

                     (iii) [ ] IAI Global Note (CUSIP _________); or

                 (b) [ ] a Restricted Definitive Note.

    2.     After the Transfer the Transferee will hold:

                            [CHECK ONE]

                 (a)    a beneficial interest in the:

                     (i)   [ ]  144A Global Note (CUSIP _________), or

                     (ii)  [ ]  Regulation S Global Note (CUSIP _________), or

                     (iii) [ ]  IAI Global Note (CUSIP _________); or

                     (iv) Unrestricted Global Note (CUSIP _________); or

                 (b) [ ] a Restricted Definitive Note; or

                 (c) [ ] an Unrestricted Definitive Note,

                 in accordance with the terms of the Indenture.

                                      B-4
<PAGE>

                                                                       EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

International Specialty Holdings Inc.
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
Attention:  General Counsel

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890

Attention:  Corporate Trust Division

         Re:  10 5/8% SENIOR SECURED NOTES DUE 2009

                              (CUSIP ____________)

Reference  is hereby made to the  Indenture,  dated as of December  13, 2001 (as
amended from time to time, the  "INDENTURE"),  between  International  Specialty
Holdings  Inc.,  as issuer (the  "ISSUER")  and  Wilmington  Trust  Company,  as
trustee.  Capitalized  terms used but not defined herein shall have the meanings
given to them in the Indenture.

         __________________________, (the "OWNER") owns and proposes to exchange
the Note[s] or interest  in such  Note[s]  specified  herein,  in the  principal
amount of  $____________  in such  Note[s] or  interests  (the  "EXCHANGE").  In
connection with the Exchange, the Owner hereby certifies that:

         1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE

         (a) [ ] CHECK IF EXCHANGE IS FROM  BENEFICIAL  INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial  interest in an Unrestricted  Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the  Owner's own  account  without  transfer,  (ii) such  Exchange  has been
effected in compliance with the transfer  restrictions  applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the  "SECURITIES  ACT"),  (iii) the  restrictions  on transfer
contained in the Indenture and the Private  Placement Legend are not required in
order to maintain  compliance  with the  Securities  Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

         (b) [ ] CHECK IF EXCHANGE IS FROM  BENEFICIAL  INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED  DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial  interest in a Restricted Global Note for an Unrestricted
Definitive  Note, the Owner hereby  certifies (i) the  Definitive  Note is being
acquired for the Owner's own account  without  transfer,  (ii) such Exchange has
been effected in  compliance  with the transfer  restrictions  applicable to the
Restricted  Global Notes and pursuant to and in accordance  with the  Securities
Act,  (iii) the  restrictions  on transfer  contained in the  Indenture  and the
Private  Placement Legend are not required in order to maintain  compliance with
the

                                      C-1
<PAGE>

Securities Act and (iv) the Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.

         (c) [ ]  CHECK  IF  EXCHANGE  IS  FROM  RESTRICTED  DEFINITIVE  NOTE TO
BENEFICIAL  INTEREST IN AN  UNRESTRICTED  GLOBAL NOTE.  In  connection  with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being  acquired  for the  Owner's  own account  without  transfer,  (ii) such
Exchange  has  been  effected  in  compliance  with  the  transfer  restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the  Securities  Act,  (iii)  the  restrictions  on  transfer  contained  in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance  with the Securities  Act and (iv) the  beneficial  interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

         (d) [ ]  CHECK  IF  EXCHANGE  IS  FROM  RESTRICTED  DEFINITIVE  NOTE TO
UNRESTRICTED  DEFINITIVE  NOTE.  In  connection  with the Owner's  Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer  restrictions  applicable to Restricted  Definitive  Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer  contained in the  Indenture and the Private  Placement  Legend are not
required in order to maintain  compliance  with the  Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

         2. EXCHANGE OF RESTRICTED  DEFINITIVE NOTES OR BENEFICIAL  INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED  DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES

         (a) [ ] CHECK IF EXCHANGE IS FROM  BENEFICIAL  INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED  DEFINITIVE  NOTE. In connection  with the Exchange of
the Owner's  beneficial  interest in a  Restricted  Global Note for a Restricted
Definitive Note with an equal principal amount,  the Owner hereby certifies that
the  Restricted  Definitive  Note is being  acquired for the Owner's own account
without transfer.  Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture,  the Restricted Definitive Note issued will continue
to be  subject  to the  restrictions  on  transfer  enumerated  in  the  Private
Placement Legend printed on the Restricted  Definitive Note and in the Indenture
and the Securities Act.

         (b) [ ]  CHECK  IF  EXCHANGE  IS  FROM  RESTRICTED  DEFINITIVE  NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the  Owner's  Restricted  Definitive  Note for a  beneficial  interest in the
[CHECK ONE] 144A Global Note,  Regulation S Global Note, IAI Global Note with an
equal principal amount,  the Owner hereby certifies (i) the beneficial  interest
is being  acquired  for the Owner's own account  without  transfer and (ii) such
Exchange  has  been  effected  in  compliance  with  the  transfer  restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities  Act, and in compliance  with any applicable  blue sky securities
laws of any  state of the  United  States.  Upon  consummation  of the  proposed
Exchange in accordance with the terms of the Indenture,  the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement  Legend  printed on the  relevant  Restricted  Global  Note and in the
Indenture and the Securities Act.

         This certificate and the statements  contained herein are made for your
benefit and the benefit of the Issuer.

                                      C-2
<PAGE>

                                           -------------------------------------
                                               [Insert Name of Transferor]

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

Dated:  ______________________

                                      C-3
<PAGE>

                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

International Specialty Holdings Inc.
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
Attention:  General Counsel

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware  19890
Attention: Corporate Trust Division

         Re:  10 5/8% SENIOR SECURED NOTES DUE 2009

Reference  is hereby made to the  Indenture,  dated as of December  13, 2001 (as
amended from time to time, the  "INDENTURE"),  between  International  Specialty
Holdings  Inc.,  as issuer (the  "ISSUER")  and  Wilmington  Trust  Company,  as
trustee.  Capitalized  terms used but not defined herein shall have the meanings
given to them in the Indenture

         In connection  with our proposed  purchase of  $____________  aggregate
principal amount of:

         (a) [ ]  a beneficial interest in a Global Note, or

         (b) [ ]  a Definitive Note,

         we confirm that:

         1. We  understand  that any  subsequent  transfer  of the  Notes or any
interest therein is subject to certain  restrictions and conditions set forth in
the  Indenture  and the  undersigned  agrees to be bound by,  and not to resell,
pledge  or  otherwise  transfer  the  Notes or any  interest  therein  except in
compliance  with,  such  restrictions  and  conditions  and  the  United  States
Securities Act of 1933, as amended (the "SECURITIES ACT").

         2. We  understand  that the offer  and sale of the Notes  have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted  in the  following  sentence.  We
agree,  on our own behalf and on behalf of any  accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we  will  do so  only  (A)  to the  Issuer  or any  subsidiary  thereof,  (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein),  (C) to an institutional  "accredited investor" (as
defined below) that, prior to such transfer,  furnishes (or has furnished on its
behalf  by a U.S.  broker-dealer)  to you  and to the  Issuer  a  signed  letter
substantially in the form of this letter and , if such transfer is in respect of
a principal  amount of Notes, at the time of transfer of less than $250,000,  an
Opinion  of Counsel in form  reasonably  acceptable  to the Issuer to the effect
that such transfer is in  compliance  with the  Securities  Act, (D) outside the
United States in accordance  with Rule 904 of Regulation S under the  Securities
Act, (E) pursuant to the  provisions of Rule 144(k) under the  Securities Act or
(F) pursuant to an effective  registration  statement  under the Securities Act,
and we further agree to provide to any Person  purchasing

                                      F-1
<PAGE>

the  Definitive  Note or  beneficial  interest  in a  Global  Note  from us in a
transaction  meeting  the  requirements  of  clauses  (A)  through  (E) of  this
paragraph a notice  advising such purchaser that resales  thereof are restricted
as stated herein.

         3.  We  understand  that,  on  any  proposed  resale  of the  Notes  or
beneficial  interest  therein,  we will be  required  to  furnish to you and the
Issuer such certifications,  legal opinions and other information as you and the
Issuer may  reasonably  require to confirm that the proposed  sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.

         4. We are an  institutional  "accredited  investor" (as defined in Rule
501(a)(1),  (2), (3) or (7) of Regulation D under the  Securities  Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating  the merits and risks of our  investment in the Notes,  and we and
any accounts for which we are acting are each able to bear the economic  risk of
our or its investment.

         5. We are acquiring the Notes or beneficial  interest therein purchased
by us for our own  account  or for one or more  accounts  (each  of  which is an
institutional  "accredited  investor")  as to each of  which  we  exercise  sole
investment discretion.

         You and the  Issuer  are  entitled  to rely  upon this  letter  and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any  administrative  or legal  proceedings  or  official  inquiry  with
respect to the matters covered hereby.

                                           -------------------------------------
                                            [Insert Name of Accredited Investor]

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

Dated:  _______________________

                                      F-2A/B EXCHANGE
                          REGISTRATION RIGHTS AGREEMENT

                          DATED AS OF DECEMBER 13, 2001
                                  BY AND AMONG

                     INTERNATIONAL SPECIALTY HOLDINGS INC.,

                                    AS ISSUER

                                       AND

                            BEAR, STEARNS & CO. INC.
                                UBS WARBURG LLC,

                              AS INITIAL PURCHASERS

<PAGE>

         The  Registration  Rights  Agreement  (this  "AGREEMENT")  is made  and
entered  into as of December  13,  2001,  by and among  International  Specialty
Holdings Inc., a Delaware  corporation  (the  "COMPANY" and the  "ISSUER"),  and
Bear,  Stearns & Co. Inc. and UBS Warburg LLC (each an "INITIAL  PURCHASER" and,
collectively,  the "INITIAL  PURCHASERS"),  each of which has agreed to purchase
the  Issuer's  105/8%  Series A Senior  Secured  Notes Due 2009  (the  "SERIES A
NOTES").

         This  Agreement  is made  pursuant  to the  Purchase  Agreement,  dated
December 7, 2001,  (the "PURCHASE  AGREEMENT"),  by and among the Issuer and the
Initial  Purchasers.  In order to induce the Initial  Purchasers to purchase the
Series A Notes,  the Issuer has agreed to provide  the  registration  rights set
forth in this  Agreement.  The  execution  and  delivery of this  Agreement is a
condition to the obligations of the Initial Purchasers set forth in Section 8 of
the Purchase Agreement.  Capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them the Indenture,  dated December 13, 2001,
between the Issuer and  Wilmington  Trust Company,  as Trustee,  relating to the
Series A Notes and the Series B Notes (the "INDENTURE").

         The parties hereby agree as follows:

SECTION 1.  DEFINITIONS

         As used in this Agreement,  the following  capitalized terms shall have
the following meanings:

         ACT:  The Securities Act of 1933, as amended.

         AFFILIATE:  As defined in Rule 144 of the Act.

         BROKER-DEALER: Any broker or dealer registered under the Exchange Act.

         CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture.

         CLOSING DATE:  The date hereof.

         COMMISSION:  The Securities and Exchange Commission.

         CONSUMMATE:  An  Exchange  Offer  shall  be  deemed  "Consummated"  for
purposes  of  this   Agreement  upon  the  occurrence  of  (a)  the  filing  and
effectiveness  under  the  Act  of the  Exchange  Offer  Registration  Statement
relating  to the  Series B Notes to be issued  in the  Exchange  Offer,  (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required  pursuant to Section  3(b) hereof and (c) the delivery by the Issuer to
the  Registrar  under  the  Indenture  of  Series B Notes in the same  aggregate
principal amount as the aggregate principal amount of Series A Notes tendered by
Holders thereof pursuant to the Exchange Offer.

         CONSUMMATION DEADLINE:  As defined in Section 3(b) hereof.

         EFFECTIVENESS DEADLINE:  As defined in Section 3(a)(y) and 4(a) hereof.

<PAGE>

         EXCHANGE ACT:  The Securities Exchange Act of 1934, as amended.

         EXCHANGE OFFER:  The exchange and issuance by the Issuer of a principal
amount of Series B Notes  (which  shall be  registered  pursuant to the Exchange
Offer  Registration  Statement)  equal to the  outstanding  principal  amount of
Series A Notes  that are  tendered  by such  Holders  in  connection  with  such
exchange and issuance.

         EXCHANGE  OFFER  REGISTRATION  STATEMENT:  The  Registration  Statement
relating to the Exchange Offer, including the related Prospectus.

         EXEMPT  RESALES:  The  transactions  in which  the  Initial  Purchasers
propose to sell the Series A Notes to certain "qualified  institutional buyers,"
as such term is defined in Rule 144A under the Act and pursuant to  Regulation S
under the Act.

         FILING DEADLINE:  As defined in Sections 3(a) and 4(a)(x) hereof.

         HOLDERS:  As defined in Section 2 hereof.

         PROSPECTUS:  The prospectus included in a Registration Statement at the
time  such  Registration   Statement  is  declared  effective,   as  amended  or
supplemented by any prospectus  supplement and by all other amendments  thereto,
including post-effective  amendments, and all material incorporated by reference
into such Prospectus.

         RECOMMENCEMENT DATE:  As defined in Section 6(d) hereof.

         REGISTRATION DEFAULT:  As defined in Section 5 hereof.

         REGISTRATION  STATEMENT:  Any registration  statement of the Issuer and
the  Guarantors  relating to (a) an  offering  of Series B Notes  pursuant to an
Exchange  Offer  or (b) the  registration  for  resale  of  Transfer  Restricted
Securities pursuant to the Shelf Registration  Statement, in each case, (i) that
is filed  pursuant to the  provisions of this  Agreement and (ii)  including the
Prospectus  included therein,  all amendments and supplements thereto (including
post-effective  amendments)  and  all  exhibits  and  material  incorporated  by
reference therein.

         REGULATION S:  Regulation S promulgated under the Act.

         RULE 144:  Rule 144 promulgated under the Act.

         SERIES B NOTES:  The Issuer's  105/8% Series B Senior Secured Notes due
2009 to be issued pursuant to the Indenture in the Exchange Offer.

         SHELF REGISTRATION STATEMENT:  As defined in Section 4 hereof.

         SUSPENSION NOTICE:  As defined in Section 6(d) hereof.

         TIA: The Trust Indenture Act of 1939 (15 U.S.C.  Section  77aaa-77bbbb)
as in effect on the date of the Indenture.

                                       2
<PAGE>

         TRANSFER  RESTRICTED  SECURITIES:  Each (A)  Series A Note,  until  the
earliest  to occur of (i) the date on which such Series A Note is  exchanged  in
the  Exchange  Offer for a Series B Note which is  entitled  to be resold to the
public by the Holder thereof  without  complying  with the  prospectus  delivery
requirements  of the Act,  (ii) the  date on which  such  Series A Note has been
disposed  of  in  accordance  with  a  Shelf  Registration  Statement  (and  the
purchasers  thereof have been issued Series B Notes), or (iii) the date on which
such Series A Note is distributed  to the public  pursuant to Rule 144 under the
Act and each (B) Series B Note held by a Broker  Dealer  until the date on which
such Series B Note is disposed  of by a  Broker-Dealer  pursuant to the "Plan of
Distribution"   contemplated  by  the  Exchange  Offer  Registration   Statement
(including the delivery of the Prospectus contained therein).

SECTION 2.  HOLDERS

         A Person is deemed to be a holder  of  Transfer  Restricted  Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.

SECTION 3.  REGISTERED EXCHANGE OFFER

         (a)   Unless the Exchange Offer shall not be  permitted  by  applicable
federal law (after the procedures  set forth in Section  6(a)(i) below have been
complied  with),  the Issuer  shall (i) cause the  Exchange  Offer  Registration
Statement  to be filed  with the  Commission  as soon as  practicable  after the
Closing  Date,  but in no event later than 90 days after the Closing  Date (such
90th day being the "FILING  DEADLINE"),  (ii) use its best efforts to cause such
Exchange  Offer  Registration  Statement  to become  effective  at the  earliest
possible  time, but in no event later than 180 days after the Closing Date (such
180th day being the  "EFFECTIVENESS  DEADLINE"),  (iii) in  connection  with the
foregoing,  (A)  file  all  pre-effective  amendments  to  such  Exchange  Offer
Registration  Statement  as may be  necessary  in order  to  cause it to  become
effective,  (B) file, if applicable, a post-effective amendment to such Exchange
Offer  Registration  Statement pursuant to Rule 430A under the Act and (C) cause
all  necessary  filings,  if  any,  in  connection  with  the  registration  and
qualification  of the  Series B Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) upon the  effectiveness  of such  Exchange  Offer  Registration  Statement,
commence and Consummate the Exchange  Offer.  The Exchange Offer shall be on the
appropriate form permitting (i) registration of the Series B Notes to be offered
in exchange for the Series A Notes that are Transfer  Restricted  Securities and
(ii) resales of Series B Notes by Broker-Dealers that tendered into the Exchange
Offer Series A Notes that such  Broker-Dealer  acquired for its own account as a
result of  market-making  activities  or other  trading  activities  (other than
Series A Notes  acquired  directly from the Issuer or any of its  Affiliates) as
contemplated by Section 3(c) below.

         (b)   The Issuer shall use its best efforts to cause the Exchange Offer
Registration Statement to be effective continuously, and shall keep the Exchange
Offer  open for a period  of not less than the  minimum  period  required  under
applicable  federal and state  securities laws to Consummate the Exchange Offer;
PROVIDED,  HOWEVER,  that in no event shall such period be less than 20 business
days.  The Issuer shall cause the Exchange  Offer to comply with all  applicable
federal and state  securities  laws. No securities other than the Series B Notes
shall be included in the Exchange Offer Registration Statement. The Issuer shall
use its best  efforts  to cause  the  Exchange  Offer to be  Consummated  on the
earliest  practicable date after the Exchange Offer

                                       3
<PAGE>

Registration  Statement  has  become  effective,  but in no event  later than 30
business days thereafter (such 30th day being the "CONSUMMATION DEADLINE").

         (c)   The Issuer shall include a "Plan of Distribution"  section in the
Prospectus  contained in the Exchange Offer Registration  Statement and indicate
therein that any  Broker-Dealer  who holds Transfer  Restricted  Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities  or other  trading  activities  (other than  Series A Notes  acquired
directly  from the Issuer or any  Affiliate  of the Issuer),  may exchange  such
Transfer  Restricted  Securities  pursuant to the Exchange Offer.  Such "Plan of
Distribution"  section shall also contain all other  information with respect to
such sales by such  Broker-Dealers  that the  Commission may require in order to
permit such sales pursuant  thereto,  but such "Plan of Distribution"  shall not
name any such  Broker-Dealer  or  disclose  the  amount of  Transfer  Restricted
Securities held by any such Broker-Dealer,  except to the extent required by the
Commission  as a result of a change in policy,  rules or  regulations  after the
date of this Agreement.  See the SHEARMAN & STERLING no-action letter (available
July 2, 1993).

         Because such Broker-Dealer may be deemed to be an "underwriter"  within
the meaning of the Act and must,  therefore,  deliver a  prospectus  meeting the
requirements  of the Act in  connection  with its  initial  sale of any Series B
Notes received by such  Broker-Dealer  in the Exchange  Offer,  the Issuer shall
permit the use of the Prospectus  contained in the Exchange  Offer  Registration
Statement by such Broker-Dealer to satisfy such prospectus delivery requirement.
To the extent necessary to ensure that the prospectus  contained in the Exchange
Offer  Registration  Statement  is  available  for  sales  of  Series B Notes by
Broker-Dealers,  the Issuer  agrees to use its best efforts to keep the Exchange
Offer Registration Statement continuously effective,  supplemented,  amended and
current as required by and subject to the provisions of Section 6(a) and Section
6 (c) hereof and in conformity with the requirements of this Agreement,  the Act
and the policies, rules and regulations of the Commission as announced from time
to time, for a period of one year from the Consummation Deadline or such shorter
period as will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto. The Issuer shall provide
sufficient   copies  of  the  latest   version  of  such   Prospectus   to  such
Broker-Dealers,  promptly upon request, and in no event later than one day after
such request, at any time during such period.

SECTION 4.  SHELF REGISTRATION

         (a)   SHELF REGISTRATION. If (i) the Issuer is not (A) required to file
the Exchange  Offer  Registration  Statement or (B) permitted to Consummate  the
Exchange  Offer because the Exchange Offer is not permitted by applicable law or
Commission  policy (after the Issuer has complied with the  procedures set forth
in  Section  6(a)(i)  below)  or  (ii)  if any  Holder  of  Transfer  Restricted
Securities  shall  notify the  Issuer  within 20  business  days  following  the
Consummation of the Exchange Offer that (A) such Holder was prohibited by law or
Commission  policy from  participating  in the Exchange Offer or (B) such Holder
may not resell the Series B Notes  acquired by it in the  Exchange  Offer to the
public  without  delivering a  prospectus  and the  Prospectus  contained in the
Exchange Offer  Registration  Statement is not appropriate or available for such
resales by such Holder or (C) such Holder is a Broker-Dealer  and holds Series A
Notes  acquired  directly from the Issuer or any of their  Affiliates,  then the
Issuer shall:

                                       4
<PAGE>

     (x) cause to be filed,  on or prior to 30 days after the earlier of (i) the
date on which  the  Company  determines  that the  Exchange  Offer  Registration
Statement  cannot be filed as a result of clause  (a)(i) above and (ii) the date
on which the Company  receives  the notice  specified in clause  (a)(ii)  above,
(such earlier  date,  the "FILING  DEADLINE"),  a shelf  registration  statement
pursuant to Rule 415 under the Act (which may be an  amendment  to the  Exchange
Offer Registration Statement) (the "SHELF REGISTRATION STATEMENT"),  relating to
all Transfer Restricted Securities, and

     (y) shall use its best efforts to cause such Shelf  Registration  Statement
to become  effective  on or prior to 90 days after the Filing  Deadline  for the
Shelf Registration Statement (such 90th day the "EFFECTIVENESS DEADLINE").

         If, after the Issuer has filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Issuer is required to
file and make  effective  a Shelf  Registration  Statement  solely  because  the
Exchange  Offer is not  permitted  under  applicable  federal law (i.e.,  clause
(a)(i)  above),  then the filing of the Exchange  Offer  Registration  Statement
shall be deemed to satisfy the requirements of clause (x) above;  PROVIDED that,
in such event,  the Issuer  shall  remain  obligated  to meet the  Effectiveness
Deadline set forth in clause (y) above.

         To the extent necessary to ensure that the Shelf Registration Statement
is available for sales of Transfer Restricted  Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other  securities  required
to be registered  therein pursuant to Section 6(b)(ii) hereof,  the Issuer shall
use its best efforts to keep any Shelf  Registration  Statement required by this
Section  4(a)  continuously  effective,  supplemented,  amended  and  current as
required  by and subject to the  provisions  of Section  6(b) and  Section  6(c)
hereof and in conformity with the  requirements  of this Agreement,  the Act and
the policies,  rules and regulations of the Commission as announced from time to
time,  for a period  of at least  two years (as  extended  pursuant  to  Section
6(c)(i)  hereof)  following  the Closing  Date,  or such shorter  period as will
terminate  when  all  Transfer  Restricted  Securities  covered  by  such  Shelf
Registration Statement have been sold pursuant thereto.

         (b)   PROVISION  BY  HOLDERS  OF CERTAIN INFORMATION IN CONNECTION WITH
THE SHELF REGISTRATION  STATEMENT.  No Holder of Transfer Restricted  Securities
may include any of its Transfer Restricted  Securities in any Shelf Registration
Statement  pursuant to this Agreement  unless and until such Holder furnishes to
the  Issuer in  writing,  within 10  business  days  after  receipt of a request
therefor,  the information  specified in Item 507 or Item 508 of Regulation S-K,
as  applicable,  of the Act for use in  connection  with any Shelf  Registration
Statement or Prospectus or preliminary Prospectus included therein. No Holder of
Transfer Restricted  Securities shall be entitled to liquidated damages pursuant
to Section 5 hereof  unless and until such Holder  shall have  provided all such
information.   Each  selling  Holder  agrees  to  promptly  furnish   additional
information required to be disclosed in order to make the information previously
furnished to the Issuer by such Holder not materially misleading.

                                       5
<PAGE>

SECTION 5.   LIQUIDATED DAMAGES

         If (i) any  Registration  Statement  required by this  Agreement is not
filed with the Commission on or prior to the applicable  Filing  Deadline,  (ii)
any  such  Registration  Statement  has  not  been  declared  effective  by  the
Commission  on or prior to the  applicable  Effectiveness  Deadline,  (iii)  the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline
or (iv) any  Registration  Statement  required  by this  Agreement  is filed and
declared  effective  but shall  thereafter  cease to be  effective or fail to be
usable  for its  intended  purpose  without  being  succeeded  immediately  by a
post-effective  amendment to such Registration Statement that cures such failure
and that is itself declared  effective  immediately (each such event referred to
in clauses (i) through (iv), a "REGISTRATION  DEFAULT"),  then the Issuer hereby
agrees to pay to each Holder of Transfer Restricted  Securities affected thereby
liquidated  damages in an amount  equal to $.05 per week per $1,000 in principal
amount of Transfer  Restricted  Securities  held by such Holder for each week or
portion  thereof that the  Registration  Default  continues for the first 90-day
period immediately  following the occurrence of such Registration  Default.  The
amount of the liquidated  damages shall increase by an additional  $.05 per week
per $1,000 in principal amount of Transfer Restricted Securities with respect to
each subsequent  90-day period until all Registration  Defaults have been cured,
up to a maximum  amount of  liquidated  damages  of $.50 per week per  $1,000 in
principal  amount of Transfer  Restricted  Securities;  PROVIDED that the Issuer
shall  in no event be  required  to pay  liquidated  damages  for more  than one
Registration Default at any given time. Notwithstanding anything to the contrary
set forth herein, (1) upon filing of the Exchange Offer  Registration  Statement
(and/or, if applicable,  the Shelf Registration  Statement),  in the case of (i)
above, (2) upon the effectiveness of the Exchange Offer  Registration  Statement
(and/or, if applicable,  the Shelf Registration Statement),  in the case of (ii)
above, (3) upon  Consummation of the Exchange Offer, in the case of (iii) above,
or (4)  upon  the  filing  of a  post-effective  amendment  to the  Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared  effective  or made  usable in the case of (iv) above,  the
liquidated damages payable with respect to the Transfer Restricted Securities as
a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.

         All accrued  liquidated  damages shall be paid to the Holders  entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each  Interest  Payment  Date,  as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be  Transfer  Restricted  Securities,  all  obligations  of the
Issuer to pay liquidated  damages with respect to securities shall survive until
such time as such  obligations  with respect to such securities  shall have been
satisfied in full.

SECTION 6.   REGISTRATION PROCEDURES

         (a)   EXCHANGE OFFER REGISTRATION  STATEMENT.  In  connection  with the
Exchange  Offer,  the Issuer shall (x) comply with all applicable  provisions of
Section  6(c) below,  (y) use its best  efforts to effect such  exchange  and to
permit  the  resale of Series B Notes by  Broker-Dealers  that  tendered  in the
Exchange  Offer  Series A Notes  that such  Broker-Dealer  acquired  for its own
account as a result of its market-making  activities or other trading activities
(other  than  Series A Notes  acquired  directly  from the  Issuer or any of its
Affiliates)  being sold in  accordance  with the

                                       6
<PAGE>

intended method or methods of distribution  thereof,  and (z) comply with all of
the following provisions:

               (i) If,  following  the date  hereof  there has been  announced a
         change in Commission policy with respect to exchange offers such as the
         Exchange Offer, that in the reasonable opinion of counsel to the Issuer
         raises a  substantial  question  as to whether  the  Exchange  Offer is
         permitted by applicable federal law, the Issuer hereby agrees to seek a
         no-action  letter  or other  favorable  decision  from  the  Commission
         allowing the Issuer to Consummate  an Exchange  Offer for such Transfer
         Restricted Securities.  The Issuer hereby agrees to pursue the issuance
         of such a decision to the Commission  staff level.  In connection  with
         the foregoing,  the Issuer hereby agrees to take all such other actions
         as  may be  requested  by  the  Commission  or  otherwise  required  in
         connection  with  the  issuance  of such  decision,  including  without
         limitation  (A)  participating  in  telephonic   conferences  with  the
         Commission, (B) delivering to the Commission staff an analysis prepared
         by counsel to the Issuer  setting  forth the legal bases,  if any, upon
         which such counsel has concluded  that such an Exchange Offer should be
         permitted and (C) diligently  pursuing a resolution  (which need not be
         favorable) by the Commission staff.

               (ii) As a condition to its  participation  in the Exchange Offer,
         each  Holder of  Transfer  Restricted  Securities  (including,  without
         limitation,  any Holder who is a Broker-Dealer) shall furnish, upon the
         request of the Issuer, prior to the Consummation of the Exchange Offer,
         a written  representation  to the Issuer (which may be contained in the
         letter of transmittal  contemplated by the Exchange Offer  Registration
         Statement) to the effect that (A) it is not an Affiliate of the Issuer,
         (B) it is not  engaged in, and does not intend to engage in, and has no
         arrangement  or  understanding  with any  person to  participate  in, a
         distribution  of the Series B Notes to be issued in the Exchange  Offer
         and (C) it is acquiring  the Series B Notes in its  ordinary  course of
         business.  As a condition to its  participation  in the Exchange  Offer
         each Holder using the Exchange  Offer to  participate in a distribution
         of the Series B Notes shall  acknowledge and agree that, if the resales
         are of Series B Notes  obtained by such Holder in exchange for Series A
         Notes acquired directly from the Issuer or an Affiliate thereof, it (1)
         could  not,  under  Commission  policy as in effect on the date of this
         Agreement,  rely on the position of the Commission  enunciated in EXXON
         CAPITAL  HOLDINGS  CORPORATION  (available  May 13,  1988)  and  MORGAN
         STANLEY AND CO., INC.  (available  June 5, 1991), as interpreted in the
         Commission's  letter to  SHEARMAN  & STERLING  dated July 2, 1993,  and
         similar  no-action  letters  (including,  if applicable,  any no-action
         letter obtained pursuant to clause (i) above), and (2) must comply with
         the  registration  and prospectus  delivery  requirements of the Act in
         connection  with  a  secondary  resale  transaction  and  that  such  a
         secondary   resale   transaction   must  be  covered  by  an  effective
         registration   statement   containing  the  selling   security   holder
         information  required  by  Item  507 or Item  508,  as  applicable,  of
         Regulation S-K.

               (iii) Prior to effectiveness  of the Exchange Offer  Registration
         Statement,  the  Issuer  shall  provide  a  supplemental  letter to the
         Commission  (A) stating  that the Issuer is  registering  the  Exchange
         Offer in reliance on the position of the Commission enunciated in EXXON
         CAPITAL HOLDINGS  CORPORATION  (available May 13, 1988), MORGAN STANLEY
         AND  CO.,  INC.   (available  June  5,  1991)  as  interpreted  in  the
         Commission's  letter to SHEARMAN

                                       7
<PAGE>

               & STERLING dated July 2, 1993, and, if applicable,  any no-action
               letter  obtained  pursuant to clause (i) above,  (B)  including a
               representation   that  the  Issuer  has  not  entered   into  any
               arrangement  or  understanding  with any Person to distribute the
               Series B Notes to be received in the Exchange  Offer and that, to
               the best of the  Issuer's  information  and  belief,  each Holder
               participating  in the Exchange  Offer is  acquiring  the Series B
               Notes in its ordinary  course of business and has no  arrangement
               or   understanding   with  any  Person  to   participate  in  the
               distribution of the Series B Notes received in the Exchange Offer
               and (C) any other undertaking or  representation  required by the
               Commission as set forth in any no-action letter obtained pursuant
               to clause (i) above, if applicable.

               (b)  SHELF REGISTRATION STATEMENT.  In  connection with the Shelf
Registration Statement, the Issuer shall:

                    (i) comply with all the provisions of Section 6(c) below and
               use its reasonable  best efforts to effect such  registration  to
               permit the sale of the Transfer Restricted  Securities being sold
               in accordance with the intended method or methods of distribution
               thereof (as indicated in the information furnished to the Company
               pursuant to Section 4(b) hereof), and pursuant thereto the Issuer
               will  prepare  and  file  with  the   Commission  a  Registration
               Statement  relating to the  registration on any appropriate  form
               under the Act,  which form shall be available for the sale of the
               Transfer  Restricted  Securities in accordance  with the intended
               method or methods of distribution thereof within the time periods
               and otherwise in accordance with the provisions hereof, and

                    (ii) issue,  upon the request of any Holder or  purchaser of
               Series  A  Notes  covered  by any  Shelf  Registration  Statement
               contemplated  by  this  Agreement,   Series  B  Notes  having  an
               aggregate  principal  amount  equal  to the  aggregate  principal
               amount of Series A Notes sold pursuant to the Shelf  Registration
               Statement and  surrendered  to the Issuer for  cancellation;  the
               Issuer shall  register  Series B Notes on the Shelf  Registration
               Statement  for this  purpose  and issue the Series B Notes to the
               purchasers  of  securities  subject  to  the  Shelf  Registration
               Statement in the names as such purchasers shall designate.

               (c)  GENERAL PROVISIONS.  In  connection  with  any  Registration
Statement  and any related  Prospectus  required by this  Agreement,  the Issuer
shall:

                    (i)  use  its   reasonable   best   efforts   to  keep  such
               Registration  Statement  continuously  effective  and provide all
               requisite  financial  statements  for  the  period  specified  in
               Section 3 or Section 4 of this Agreement, as applicable. Upon the
               occurrence  of any event that would  cause any such  Registration
               Statement or the Prospectus  contained  therein (A) to contain an
               untrue  statement of material  fact or omit to state any material
               fact necessary to make the  statements  therein not misleading or
               (B)  not to be  effective  and  usable  for  resale  of  Transfer
               Restricted   Securities   during  the  period  required  by  this
               Agreement,   the  Issuer  shall  file  promptly  an   appropriate
               amendment to such Registration Statement curing such defect, and,
               if Commission  review is required,  use its best efforts to cause
               such amendment to be declared  effective as soon as  practicable.
               Notwithstanding  the  foregoing,  the  Issuer may allow the Shelf
               Registration  Statement  and the related  Prospectus  to cease to
               become  effective and usable if (x) the board of directors

                                       8
<PAGE>

               of the  Company  determines  in good faith that it is in the best
               interests  of the  Company not to disclose  the  existence  of or
               facts  surrounding  any  proposed or pending  material  corporate
               transaction  involving  the  Issuer  or the  Guarantors,  and the
               Company  notifies the Holders within two business days after such
               board  of  directors  makes  such   determination,   or  (y)  the
               Prospectus contained in the Shelf Registration Statement contains
               an  untrue  statement  of a  material  fact or  omits  to state a
               material  fact  necessary  in order to make the  statements  made
               therein,  in light of the  circumstances  under  which  they were
               made, not misleading;  PROVIDED that the two-year period referred
               to in Section  4(a) hereof  during  which the Shelf  Registration
               Statement  is  required  to be  effective  and  usable  shall  be
               extended  by the number of days  during  which such  Registration
               Statement was not  effective or usable  pursuant to the foregoing
               provisions;

                    (ii) prepare and file with the  Commission  such  amendments
               and  post-effective  amendments  to the  applicable  Registration
               Statement as may be necessary to keep such Registration Statement
               effective  for the  applicable  period  set forth in Section 3 or
               Section 4 hereof,  as the case may be; cause the Prospectus to be
               supplemented  by any required  Prospectus  supplement,  and as so
               supplemented  to be filed pursuant to Rule 424 under the Act, and
               to comply  fully  with Rules 424,  430A and 462,  as  applicable,
               under the Act in a timely manner;  and comply with the provisions
               of the Act with  respect  to the  disposition  of all  securities
               covered by such  Registration  Statement  during  the  applicable
               period in  accordance  with the  intended  method or  methods  of
               distribution   by  the   sellers   thereof   set  forth  in  such
               Registration Statement or supplement to the Prospectus;

                    (iii)  subject  to  Section  6(c)(i),  if any  fact or event
               contemplated  by Section  6(d)(i)(D)  above  shall  exist or have
               occurred, prepare a supplement or post-effective amendment to the
               Registration  Statement  or related  Prospectus  or any  document
               incorporated  therein  by  reference  or file any other  required
               document so that,  as thereafter  delivered to the  purchasers of
               Transfer Restricted  Securities,  the Prospectus will not contain
               an  untrue  statement  of a  material  fact or omit to state  any
               material fact  necessary to make the statements  therein,  in the
               light of the  circumstances  under  which  they  were  made,  not
               misleading;

                    (iv) in  connection  with  any sale of  Transfer  Restricted
               Securities  that will result in such  securities  no longer being
               Transfer  Restricted  Securities,  cooperate  with the Holders to
               facilitate the timely  preparation  and delivery of  certificates
               representing  Transfer  Restricted  Securities to be sold and not
               bearing any  restrictive  legends;  and to register such Transfer
               Restricted Securities in such denominations and such names as the
               selling  Holders may request at least two business  days prior to
               such sale of Transfer Restricted Securities;

                    (v) use its best  efforts  to cause the  disposition  of the
               Transfer  Restricted   Securities  covered  by  the  Registration
               Statement  to be  registered  with  or  approved  by  such  other
               governmental  agencies  or  authorities  as may be  necessary  to
               enable  the  seller  or  sellers   thereof  to   consummate   the
               disposition of such Transfer  Restricted  Securities,  subject to
               the proviso contained in Section 6 (d)(ix) below;

                                       9
<PAGE>

                    (vi)  provide a CUSIP  number  for all  Transfer  Restricted
               Securities  not later than the effective  date of a  Registration
               Statement  covering  such  Transfer  Restricted   Securities  and
               provide the Trustee under the Indenture with printed certificates
               for  the  Transfer  Restricted  Securities  which  are  in a form
               eligible for deposit with the Depository Trust Company;

                    (vii)  otherwise  use its best  efforts  to comply  with all
               applicable  rules and  regulations  of the  Commission,  and make
               generally  available to its  security  holders with regard to any
               applicable  Registration  Statement,  as soon as  practicable,  a
               consolidated  earnings statement meeting the requirements of Rule
               158 (which need not be audited)  covering a  twelve-month  period
               beginning after the effective date of the Registration  Statement
               (as such term is defined in  paragraph  (c) of Rule 158 under the
               Act);

                    (viii) cause the Indenture to be qualified under the TIA not
               later than the effective date of the first Registration Statement
               required  by  this  Agreement   and,  in  connection   therewith,
               cooperate with the Trustee and the Holders to effect such changes
               to the  Indenture as may be required for such  Indenture to be so
               qualified  in  accordance  with the terms of the TIA; and execute
               and use its best  efforts to cause the  Trustee to  execute,  all
               documents  that may be required  to effect  such  changes and all
               other  forms  and  documents   required  to  be  filed  with  the
               Commission  to enable  such  Indenture  to be so  qualified  in a
               timely manner; and

                    (ix) provide  promptly to each Holder,  upon  request,  each
               document filed with the Commission  pursuant to the  requirements
               of Section 13 or Section 15(d) of the Exchange Act.

               (d)   ADDITIONAL  PROVISIONS   APPLICABLE  TO  SHELF REGISTRATION
STATEMENTS.  In connection with any Shelf Registration Statement and any related
Prospectus required by this Agreement, the Issuer shall:

                    (i) advise each Holder  promptly  and, if  requested by such
               Holder,  confirm such advice in writing,  (A) when the Prospectus
               or any Prospectus supplement or post-effective amendment has been
               filed,  and, with respect to any  applicable  Shelf  Registration
               Statement or any post-effective  amendment thereto, when the same
               has become  effective,  (B) of any request by the  Commission for
               amendments to the Shelf  Registration  Statement or amendments or
               supplements  to  the  Prospectus  or for  additional  information
               relating  thereto,  (C) of the issuance by the  Commission of any
               stop order suspending the effectiveness of the Shelf Registration
               Statement  under  the  Act or of  the  suspension  by  any  state
               securities  commission  of  the  qualification  of  the  Transfer
               Restricted  Securities for offering or sale in any  jurisdiction,
               or the  initiation  of any  proceeding  for any of the  preceding
               purposes,  (D) of the  existence of any fact or the  happening of
               any event that makes any statement of a material fact made in the
               Shelf Registration  Statement,  the Prospectus,  any amendment or
               supplement  thereto or any  document  incorporated  by  reference
               therein  untrue,  or that requires the making of any additions to
               or changes in the Shelf  Registration  Statement in order to make
               the  statements  therein not  misleading,  or that  requires  the
               making of any additions to or changes in the  Prospectus in order
                to make the statements therein, in the light of the

                                       10
<PAGE>

               circumstances  under which they were made, not misleading.  If at
               any time the Commission shall issue any stop order suspending the
               effectiveness  of  the  Registration   Statement,  or  any  state
               securities  commission or other regulatory  authority shall issue
               an  order   suspending  the   qualification   or  exemption  from
               qualification of the Transfer  Restricted  Securities under state
               securities  or Blue  Sky  laws,  the  Issuer  shall  use its best
               efforts to obtain the  withdrawal or lifting of such order at the
               earliest possible time;

                    (ii) if  requested  in  writing,  furnish to each  Holder in
               connection  with  such  sale,  if any,  before  filing  with  the
               Commission,  copies of any Shelf  Registration  Statement  or any
               Prospectus  included  therein or any amendments or supplements to
               any such Shelf  Registration  Statement or Prospectus  (including
               all documents  incorporated by reference after the initial filing
               of such Shelf  Registration  Statement),  which documents will be
               subject to the review and comment of such  Holders in  connection
               with such sale,  if any,  for a period of at least five  business
               days,  and the Company will not file any such Shelf  Registration
               Statement or  Prospectus  or any  amendment or  supplement to any
               such Shelf  Registration  Statement or Prospectus  (including all
               such documents  incorporated  by reference) to which such Holders
               shall  reasonably  object  within  five  business  days after the
               receipt  thereof.  A Holder  shall be deemed  to have  reasonably
               objected  to such  filing if such Shelf  Registration  Statement,
               amendment,  Prospectus or supplement,  as applicable, as proposed
               to be filed,  contains an untrue  statement of a material fact or
               omits to state any material fact necessary to make the statements
               therein not  misleading  or fails to comply  with the  applicable
               requirements of the Act;

                    (iii)  promptly  prior to the filing of any document that is
               to  be  incorporated  by  reference  into  a  Shelf  Registration
               Statement or Prospectus,  provide copies of such document to each
               Holder in  connection  with such sale,  if any, make the Issuer's
               representatives  available  for  discussion  of such document and
               other   customary  due  diligence   matters,   and  include  such
               information  in such document prior to the filing thereof as such
               Holders may reasonably request;

                    (iv) make available,  at reasonable times, for inspection by
               each  Holder and any  attorney  or  accountant  retained  by such
               Holders,  all financial and other  records,  pertinent  corporate
               documents  of  the  Issuer  and  cause  the  Issuer's   officers,
               directors  and  employees  to supply all  information  reasonably
               requested  by  any  such  Holder,   attorney  or   accountant  in
               connection with such Registration Statement or any post-effective
               amendment  thereto  subsequent to the filing thereof and prior to
               its effectiveness;

                    (v) if  requested  by any  Holders in  connection  with such
               exchange  or sale,  promptly  include  in any Shelf  Registration
               Statement   or   Prospectus,   pursuant   to  a   supplement   or
               post-effective  amendment if necessary,  such information as such
               Holders  may  reasonably   request  to  have  included   therein,
               including, without limitation,  information relating to the "Plan
               of Distribution" of the Transfer Restricted Securities;  and make
               all   required   filings  of  such   Prospectus   supplement   or
               post-effective amendment as soon as practicable after the Company
               is notified  of the  matters to be  included  in such  Prospectus
               supplement or post-effective amendment;

                                       11
<PAGE>

                    (vi)  furnish to each Holder in  connection  with such sale,
               without  charge,  at  least  one copy of the  Shelf  Registration
               Statement,  as  first  filed  with  the  Commission,  and of each
               amendment  thereto,   including  all  documents  incorporated  by
               reference   therein   and  all   exhibits   (including   exhibits
               incorporated therein by reference);

                    (vii) deliver to each Holder without charge,  as many copies
               of the Prospectus (including each preliminary prospectus) and any
               amendment or supplement  thereto as such Persons  reasonably  may
               request;  the Issuer  hereby  consents to the use (in  accordance
               with  law) of the  Prospectus  and any  amendment  or  supplement
               thereto by each selling  Holder in  connection  with the offering
               and the sale of the Transfer Restricted Securities covered by the
               Prospectus or any amendment or supplement thereto;

                    (viii)  upon the  request  of any  Holder,  enter  into such
               agreements  (including  underwriting  agreements)  and make  such
               representations and warranties and take all such other actions in
               connection  therewith  in order to  expedite  or  facilitate  the
               disposition of the Transfer Restricted Securities pursuant to any
               applicable  Registration Statement contemplated by this Agreement
               as may be reasonably  requested by any Holder in connection  with
               any sale or resale pursuant to any Shelf Registration  Statement.
               In such connection, the Issuer shall:

                         (A) upon request of any Holder, furnish (or in the case
               of  paragraphs  (2)  and (3), use its reasonable  best efforts to
               cause  to  be furnished) to each Holder,  upon the  effectiveness
               of the Shelf Registration Statement:

                             (1) a  certificate,  dated  such  date,  signed  on
                         behalf of the Issuer by (x) the  President  or any Vice
                         President  and (y) a principal  financial or accounting
                         officer  of the  Issuer,  confirming,  as of  the  date
                         thereof,  the matters set forth in Sections 8(a), 8(b),
                         8(c), 8(d) and 8(q) of the Purchase  Agreement and such
                         other  similar  matters as such Holders may  reasonably
                         request;

                             (2) an opinion,  dated the date of effectiveness of
                         the Shelf  Registration  Statement,  of counsel for the
                         Issuer  covering  matters similar to those set forth in
                         paragraph  (f) of Section 8 of the  Purchase  Agreement
                         and such other  matters as such  Holder may  reasonably
                         request,  and in any event including a statement to the
                         effect   that  such   counsel   has   participated   in
                         conferences with officers and other  representatives of
                         the Issuer,  representatives  of the independent public
                         accountants  for the  Issuer  and have  considered  the
                         matters   required   to  be  stated   therein  and  the
                         statements contained therein, although such counsel has
                         not independently  verified the accuracy,  completeness
                         or fairness of such  statements;  and that such counsel
                         advises that, on the basis of the foregoing (relying as
                         to   materiality  to  the  extent  such  counsel  deems
                         appropriate  upon the  statements of officers and other
                         representatives  of the Issuer and without  independent
                         check or verification), no facts came to such counsel's
                         attention  that caused such counsel to believe that the
                         Shelf  Registration  Statement,  at the time such Shelf
                         Registration Statement or any post-

                                       12
<PAGE>

                         effective amendment thereto became effective, contained
                         an untrue  statement  of a material  fact or omitted to
                         state a material fact required to be stated  therein or
                         necessary   to  make   the   statements   therein   not
                         misleading,  or that the  Prospectus  contained in such
                         Shelf  Registration  Statement as of its date contained
                         an untrue  statement  of a material  fact or omitted to
                         state a material  fact  necessary  in order to make the
                         statements  therein,  in the light of the circumstances
                         under  which they were made,  not  misleading.  Without
                         limiting the foregoing,  such counsel may state further
                         that such counsel  assumes no  responsibility  for, and
                         has   not   independently   verified,   the   accuracy,
                         completeness  or fairness of the financial  statements,
                         notes and schedules and other  financial  data included
                         in any Shelf  Registration  Statement  contemplated  by
                         this Agreement or the related Prospectus; and

                             (3) a customary  comfort letter,  dated the date of
                         effectiveness of the Shelf Registration Statement, from
                         the Issuer's independent accountants,  in the customary
                         form  and  covering  matters  of the  type  customarily
                         covered  in  comfort   letters   to   underwriters   in
                         connection with underwritten  offerings,  and affirming
                         the matters set forth in the comfort letters  delivered
                         pursuant to Section 8(g) of the Purchase Agreement; and

                         (B) deliver such other  documents and  certificates  as
               may be  reasonably  requested by the selling  Holders to evidence
               compliance  with the matters covered in clause (A) above and with
               any customary  conditions contained in any agreement entered into
               by the Issuer pursuant to this clause (viii);

               (ix)  prior  to  any  public  offering  of  Transfer   Restricted
         Securities,  cooperate  with the selling  Holders and their  counsel in
         connection  with the  registration  and  qualification  of the Transfer
         Restricted  Securities  under the  securities  or Blue Sky laws of such
         jurisdictions  as the  selling  Holders  may request and do any and all
         other acts or things  necessary or advisable to enable the  disposition
         in such jurisdictions of the Transfer Restricted  Securities covered by
         the Shelf Registration  Statement;  PROVIDED,  HOWEVER, that the Issuer
         shall not be required  to register or qualify as a foreign  corporation
         where it is not now so  qualified  or to take  any  action  that  would
         subject it to the  service of  process in suits or to  taxation,  other
         than as to matters and transactions  relating to the Shelf Registration
         Statement, in any jurisdiction where it is not now so subject.

         (e)  RESTRICTIONS  ON HOLDERS.  Each Holder agrees by  acquisition of a
Transfer  Restricted  Security that,  upon receipt of the notice  referred to in
Section 6(d)(i)(C) or any notice from the Issuer of the existence of any fact of
the kind  described in Section  6(d)(i)(D)  hereof (in each case, a  "SUSPENSION
NOTICE"),  such  Holder  will  forthwith  discontinue  disposition  of  Transfer
Restricted  Securities  pursuant to the Shelf  Registration  Statement until (i)
such  Holder has  received  copies of the  supplemented  or  amended  Prospectus
contemplated  by Section  6(c)(iii)  hereof,  or (ii) such  Holder is advised in
writing by the Issuer that the use of the  Prospectus  may be  resumed,  and has
received copies of any additional or supplemental  filings that are incorporated
by reference in the Prospectus (in each case, the  "RECOMMENCEMENT

                                       13
<PAGE>

DATE").  Each Holder  receiving a Suspension  Notice  hereby agrees that it will
either (i) destroy any Prospectuses,  other than permanent file copies,  then in
such  Holder's  possession  which have been  replaced  by the  Issuer  with more
recently  dated  Prospectuses  or (ii)  deliver to the  Issuer (at the  Issuer's
expense) all copies,  other than  permanent  file copies,  then in such Holder's
possession of the Prospectus covering such Transfer  Restricted  Securities that
was  current at the time of receipt of the  Suspension  Notice.  The time period
regarding the  effectiveness of such Shelf  Registration  Statement set forth in
Section 4 hereof  shall be  extended  by a number of days equal to the number of
days in the period from and  including  the date of  delivery of the  Suspension
Notice to the date of delivery of the Recommencement Date.

SECTION 7.   REGISTRATION EXPENSES

         (a) All expenses incident to the Issuer's  performance of or compliance
with  this  Agreement  will be borne by the  Issuer,  regardless  of  whether  a
Registration Statement becomes effective,  including without limitation: (i) all
registration  and  filing  fees and  expenses;  (ii) all  fees and  expenses  of
compliance with federal  securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing certificates for the Series B Notes
to be issued in the Exchange Offer and printing of  Prospectuses,  messenger and
delivery services and telephone); (iv) all fees and disbursements of counsel for
the Issuer;  (v) all  application and filing fees in connection with listing the
Series B Notes on a national  securities  exchange or automated quotation system
pursuant  to the  requirements  hereof;  (vi)  all  fees  and  disbursements  of
independent  certified public  accountants of the Issuer (including the expenses
of any  special  audit and  comfort  letters  required  by or  incident  to such
performance);  and (vii) all fees and  expenses of the Trustee and any  exchange
agent (including all fees and expenses of their counsel).

         The Issuer will, in any event, bear its internal  expenses  (including,
without  limitation,  all salaries  and  expenses of its officers and  employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and  expenses of any Person,  including  special  experts,  retained by the
Issuer.

         (b) In  connection  with any  Registration  Statement  required by this
Agreement  (including,  without  limitation,  the  Exchange  Offer  Registration
Statement and the Shelf Registration  Statement),  the Issuer will reimburse the
Initial  Purchasers  and the Holders of Transfer  Restricted  Securities who are
tendering  Series A Notes into in the Exchange Offer and/or selling or reselling
Series  A Notes  or  Series  B Notes  pursuant  to the  "Plan  of  Distribution"
contained in the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable,  for the reasonable fees and disbursements of not more
than one counsel,  who shall be Latham & Watkins,  unless  another firm shall be
chosen  by the  Holders  of a  majority  in  principal  amount  of the  Transfer
Restricted  Securities  for whose benefit such  Registration  Statement is being
prepared.

SECTION 8.   INDEMNIFICATION

         (a) The Issuer agrees to indemnify  and hold harmless each Holder,  its
directors,  officers and each Person,  if any, who controls such Holder  (within
the meaning of Section 15 of the Act or Section 20 of the  Exchange  Act),  from
and  against  any  and  all  losses,  claims,

                                       14
<PAGE>

damages,  liabilities,  judgments  (including without  limitation,  any legal or
other  expenses  incurred in  connection  with  investigating  or defending  any
matter,  including  any action that could give rise to any such losses,  claims,
damages,  liabilities  or judgments)  caused by any untrue  statement or alleged
untrue  statement of a material fact  contained in any  Registration  Statement,
preliminary  prospectus or Prospectus  (or any amendment or supplement  thereto)
provided by the Issuer to any Holder or any  prospective  purchaser  of Series B
Notes or  registered  Series A Notes,  or  caused  by any  omission  or  alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to make the statements therein not misleading,  except insofar as such
losses,  claims,  damages,  liabilities  or  judgments  are  caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information  relating to any Holder  furnished  in writing to the Issuer by such
Holder.

         (b) Each Holder  agrees,  severally  and not jointly,  to indemnify and
hold harmless the Issuer,  and its directors and officers,  and each person,  if
any, who controls  (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) the Issuer to the same extent as the foregoing  indemnity from
the  Issuer  set  forth in  section  (a)  above,  but  only  with  reference  to
information  relating to such Holder  furnished in writing to the Issuer by such
Holder  expressly for use in any Registration  Statement.  In no event shall any
Holder, its directors, officers or any Person who controls such Holder be liable
or responsible  for any amount in excess of the amount by which the total amount
received  by  such  Holder  with  respect  to its  sale of  Transfer  Restricted
Securities  pursuant to a Registration  Statement exceeds (i) the amount paid by
such Holder for such Transfer  Restricted  Securities and (ii) the amount of any
damages that such  Holder,  its  directors,  officers or any Person who controls
such  Holder has  otherwise  been  required  to pay by reason of such  untrue or
alleged untrue statement or omission or alleged omission.

         (c) In case any  action  shall be  commenced  involving  any  person in
respect of which  indemnity  may be sought  pursuant to Section  8(a) or Section
8(b) (the "INDEMNIFIED  PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING  PERSON") in
writing  and the  indemnifying  party shall  assume the defense of such  action,
including the employment of counsel  reasonably  satisfactory to the indemnified
party and the  payment of all fees and  expenses  of such  counsel,  as incurred
(except  that in the case of any  action in respect  of which  indemnity  may be
sought  pursuant to both  Sections 8(a) and 8(b), a Holder shall not be required
to assume the defense of such  action  pursuant to this  Section  8(c),  but may
employ separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel,  except as provided below,  shall be at the expense of
the  Holder).  Any  indemnified  party  shall have the right to employ  separate
counsel in any such action and participate in the defense thereof,  but the fees
and expenses of such counsel  shall be at the expense of the  indemnified  party
unless  (i)  the  employment  of  such  counsel  shall  have  been  specifically
authorized in writing by the indemnifying  party,  (ii) the  indemnifying  party
shall  have  failed to  assume  the  defense  of such  action or employ  counsel
reasonably  satisfactory to the indemnified  party or (iii) the named parties to
any such action  (including any impleaded  parties) include both the indemnified
party and the  indemnifying  party,  and the  indemnified  party shall have been
advised by such counsel and shall have provided notice to the indemnifying party
of such advice of counsel that there may be one or more legal defenses available
to it  which  are  different  from  or  additional  to  those  available  to the
indemnifying  party (in which  case the  indemnifying  party  shall not have the
right to assume the defense of such action on behalf of the indemnified  party).
In any such case, the  indemnifying  party shall not, in connection with any

                                       15
<PAGE>

one action or separate but substantially  similar or related actions in the same
jurisdiction  arising out of the same general  allegations or circumstances,  be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by a majority of the Holders,  in the case of the parties indemnified
pursuant to Section 8(a), and by the Issuer, in the case of parties  indemnified
pursuant  to Section  8(b).  The  indemnifying  party shall  indemnify  and hold
harmless  the  indemnified  party from and against  any and all losses,  claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written  consent or (ii) effected  without its written consent
if the  settlement  is entered  into more than  twenty  business  days after the
indemnifying  party shall have received a request from the indemnified party for
reimbursement  for the fees and expenses of counsel (in any case where such fees
and expenses  are at the expense of the  indemnifying  party) and,  prior to the
date of such settlement, the indemnifying party shall have failed to comply with
such  reimbursement  request.  No  indemnifying  party shall,  without the prior
written  consent of the indemnified  party,  effect any settlement or compromise
of, or  consent  to the entry of  judgment  with  respect  to,  any  pending  or
threatened  action in  respect of which the  indemnified  party is or could have
been a party and  indemnity  or  contribution  may be or could have been  sought
hereunder  by the  indemnified  party,  unless such  settlement,  compromise  or
judgment (i) includes an unconditional release of the indemnified party from all
liability  on  claims  that are or could  have been the  subject  matter of such
action and (ii) does not include a  statement  as to or an  admission  of fault,
culpability or a failure to act, by or on behalf of the indemnified party.

         (d) To the extent that the indemnification provided for in this Section
8 is  unavailable  to an  indemnified  party in respect of any  losses,  claims,
damages,  liabilities or judgments  referred to therein,  then each indemnifying
party, in lieu of indemnifying such indemnified  party,  shall contribute to the
amount  paid or payable by such  indemnified  party as a result of such  losses,
claims,  damages,  liabilities  or  judgments  (i)  in  such  proportion  as  is
appropriate to reflect the relative  benefits received by the Issuer, on the one
hand, and the Holders,  on the other hand, from the sale of Transfer  Restricted
Securities or (ii) if the allocation provided by clause 8(d)(i) is not permitted
by applicable  law, in such proportion as is appropriate to reflect not only the
relative  benefits  referred to in clause  8(d)(i)  above but also the  relative
fault of the Issuer, on the one hand, and of the Holders,  on the other hand, in
connection  with the  statements  or  omissions  which  resulted in such losses,
claims,  damages,  liabilities  or  judgments,  as  well as any  other  relevant
equitable considerations. The relative fault of the Issuer, on the one hand, and
of the Holders,  on the other hand,  shall be  determined by reference to, among
other things,  whether the untrue or alleged untrue statement of a material fact
or the  omission  or  alleged  omission  to state a  material  fact  relates  to
information  supplied by the Issuer, on the one hand, or by the Holders,  on the
other hand, and the parties' relative intent,  knowledge,  access to information
and  opportunity  to correct or prevent such  statement or omission.  The amount
paid  or  payable  by a  party  as a  result  of the  losses,  claims,  damages,
liabilities and judgments referred to above shall be deemed to include,  subject
to the limitations set forth in the second  paragraph of Section 8(a), any legal
or other fees or expenses  reasonably  incurred by such party in connection with
investigating or defending any action or claim.

         The  Issuer  and  each  Holder  agree  that it  would  not be just  and
equitable if  contribution  pursuant to this Section 8(d) were determined by pro
rata  allocation  (even if the  Holders  were  treated  as one  entity  for such
purpose) or by any other method of allocation which does not take

                                       16
<PAGE>

account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding  paragraph shall be deemed to include,  subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with  investigating  or defending any matter,  including any
action that could have given rise to such losses, claims,  damages,  liabilities
or judgments.  Notwithstanding  the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute,  in the aggregate, any amount in excess of the amount by
which the total  received by such  Holder  with  respect to the sale of Transfer
Restricted  Securities  pursuant  to a  Registration  Statement  exceeds (i) the
amount paid by such Holder for such Transfer Restricted  Securities and (ii) the
amount of any damages  which such Holder has  otherwise  been required to pay by
reason of such  untrue or  alleged  untrue  statement  or  omission  or  alleged
omission. No person guilty of fraudulent  misrepresentation  (within the meaning
of Section 11(f) of the Act) shall be entitled to  contribution  from any person
who  was  not  guilty  of  such  fraudulent   misrepresentation.   The  Holders'
obligations  to  contribute  pursuant  to  this  Section  8(d)  are  several  in
proportion to the respective principal amount of Transfer Restricted  Securities
held by each Holder hereunder and not joint.

SECTION 9.   RULE 144A AND RULE 144

         The  Issuer  agrees  with  each  Holder,  for so long  as any  Transfer
Restricted  Securities  remain  outstanding  and  during any period in which the
Issuer (i) is not  subject to Section 13 or 15(d) of the  Exchange  Act, to make
available,  upon request of any Holder,  to such Holder or  beneficial  owner of
Transfer  Restricted  Securities  in  connection  with any sale  thereof and any
prospective  purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial  owner,  the information  required by Rule 144A(d)(4) under
the Act in  order to  permit  resales  of such  Transfer  Restricted  Securities
pursuant  to Rule  144A,  and (ii) is  subject  to  Section  13 or 15 (d) of the
Exchange Act, to make all filings  required  thereby in a timely manner in order
to permit resales of such Transfer Restricted Securities pursuant to Rule 144.

SECTION 10.  MISCELLANEOUS

         (a) REMEDIES.  The Issuer  acknowledges  and agrees that any failure by
the  Issuer to comply  with its  obligations  under  Sections 3 and 4 hereof may
result in material  irreparable  injury to the Initial Purchasers or the Holders
for which  there is no adequate  remedy at law,  that it will not be possible to
measure  damages for such injuries  precisely and that, in the event of any such
failure,  the Initial  Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Issuer's obligations under Sections 3 and 4
hereof.  The  Issuer  further  agrees to waive the  defense  in any  action  for
specific performance that a remedy at law would be adequate.

         (b) NO  INCONSISTENT  AGREEMENTS.  The Issuer will not, on or after the
date of this Agreement,  enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise  conflicts with the provisions  hereof.  The Issuer has not previously
entered into any agreement granting any registration  rights with respect to its
securities to any Person.  The rights granted to the Holders hereunder do not in
any

                                       17
<PAGE>

way  conflict  with and are not  inconsistent  with the  rights  granted  to the
holders of the  Issuer's  securities  under any  agreement in effect on the date
hereof.

         (c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the  provisions  hereof  may not be given  unless  (i) in the case of  Section 5
hereof and this Section 10(c)(i), the Issuer has obtained the written consent of
Holders of all outstanding  Transfer Restricted  Securities and (ii) in the case
of all other provisions  hereof,  the Issuer has obtained the written consent of
Holders of a majority of the outstanding principal amount of Transfer Restricted
Securities  (excluding Transfer Restricted  Securities held by the Issuer or its
Affiliates).  Notwithstanding  the  foregoing,  a waiver or consent to departure
from the  provisions  hereof that relates  exclusively  to the rights of Holders
whose Transfer Restricted Securities are being tendered pursuant to the Exchange
Offer,  and that does not  affect  directly  or  indirectly  the rights of other
Holders whose Transfer Restricted  Securities are not being tendered pursuant to
such  Exchange  Offer,  may  be  given  by  the  Holders  of a  majority  of the
outstanding  principal amount of Transfer Restricted  Securities subject to such
Exchange Offer.

         (d)  THIRD  PARTY  BENEFICIARY.   The  Holders  shall  be  third  party
beneficiaries  to the agreements made hereunder  between the Issuer,  on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such  agreements  directly to the extent they may deem such  enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.

         (e)  NOTICES.  All notices  and other  communications  provided  for or
permitted hereunder shall be made in writing by hand-delivery,  first-class mail
(registered or certified,  return receipt requested),  telex, telecopier, or air
courier guaranteeing overnight delivery:

              (i)  if to a Holder,  at the address  set forth on the  records of
         the Registrar under the Indenture, with a copy  to the Registrar  under
         the Indenture; and

              (ii) if to the Issuer:

                           International Specialty Holdings Inc.
                           c/o  ISP Management Company, Inc.
                           1361 Alps Road
                           Wayne, NJ  07470
                           Telecopier No.: (973) 628-3229
                           Attention:  General Counsel

                                       18
<PAGE>

                           With a copy to:

                           Weil, Gotshal & Manges LLP
                           767 Fifth Avenue
                           New York, NY  10153
                           Telecopier No.: 212-735-4781
                           Attention:  Michael E. Lubowitz

         All such notices and  communications  shall be deemed to have been duly
given:  at the time  delivered by hand, if personally  delivered;  five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged,  if telecopied;  and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.

         Copies of all such notices,  demands or other  communications  shall be
concurrently  delivered  by the  Person  giving  the same to the  Trustee at the
address specified in the Indenture.

         (f) SUCCESSORS AND ASSIGNS.  This Agreement  shall inure to the benefit
of and be  binding  upon the  successors  and  assigns  of each of the  parties,
including  without  limitation  and without the need for an express  assignment,
subsequent  Holders;  PROVIDED that nothing herein shall be deemed to permit any
assignment,  transfer or other disposition of Transfer Restricted  Securities in
violation of the terms hereof or of the Purchase Agreement or the Indenture.  If
any transferee of any Holder shall acquire Transfer Restricted Securities in any
manner,  whether by  operation of law or  otherwise,  such  Transfer  Restricted
Securities  shall be held subject to all of the terms of this Agreement,  and by
taking and holding  such  Transfer  Restricted  Securities  such Person shall be
conclusively  deemed  to have  agreed to be bound by and to  perform  all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this  Agreement and, if applicable,  the Purchase  Agreement,  and such
Person shall be entitled to receive the benefits hereof.

         (g)  COUNTERPARTS.  This  Agreement  may be  executed  in any number of
counterparts and by the parties hereto in separate  counterparts,  each of which
when so  executed  shall be  deemed  to be an  original  and all of which  taken
together shall constitute one and the same agreement.

         (h) HEADINGS.  The headings in this  Agreement are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

         (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE  WITH  THE LAWS OF THE  STATE  OF NEW  YORK,  WITHOUT  REGARD  TO THE
CONFLICT OF LAW RULES THEREOF.

         (j)  SEVERABILITY.  In the event that any one or more of the provisions
contained  herein,  or the  application  thereof  in any  circumstance,  is held
invalid, illegal or unenforceable,  the validity, legality and enforceability of
any such  provision  in every  other  respect  and of the  remaining  provisions
contained herein shall not be affected or impaired thereby.

         (k) ENTIRE  AGREEMENT.  This  Agreement is intended by the parties as a
final  expression of their agreement and

                                       19
<PAGE>

intended  to  be a  complete  and  exclusive  statement  of  the  agreement  and
understanding  of the parties hereto in respect of the subject matter  contained
herein. There are no restrictions,  promises, warranties or undertakings,  other
than those set forth or  referred  to herein  with  respect to the  registration
rights  granted  with  respect  to  the  Transfer  Restricted  Securities.  This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.

                                       20
<PAGE>

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
date first written above.

                              ISSUER:

                              INTERNATIONAL SPECIALTY HOLDINGS INC.

                              By: /s/ Andrew J. Diamond
                                  ---------------------------------------------
                                  Name: Andrew J. Diamond
                                  Title: Vice President and Assistant Treasurer

INITIAL PURCHASERS:

BEAR, STEARNS & CO. INC.

By: /s/ Joseph B. Sheehan
    ----------------------------------
    Name: Joseph B. Sheehan
    Title: Sr. Managing Director

UBS WARBURG LLC

By: /s/
    ----------------------------------
    Name:
    Title:

                                      A-1

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