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                                                                    EXHIBIT 10.1

                             PIONEER COMPANIES, INC.

                         2001 EMPLOYEE STOCK OPTION PLAN

SECTION 1. Purpose of the Plan.

      The Pioneer Companies, Inc. 2001 Employee Stock Option Plan (the "Plan")
is intended to promote the interests of Pioneer Companies, Inc., a Delaware
corporation (the "Company"), by encouraging key personnel of the Company and its
affiliates to acquire or increase their equity interest in the Company and to
provide a means whereby they may develop a sense of proprietorship and personal
involvement in the development and financial success of the Company, and to
encourage them to remain with and devote their best efforts to the business of
the Company, thereby advancing the interests of the Company and its
stockholders. The Plan is also intended to enhance the ability of the Company,
its subsidiaries and affiliated entities to attract and retain the services of
individuals who are essential for the growth and profitability of the Company.
Options granted under the Plan may either be "incentive stock options" intended
to qualify as such under the Internal Revenue Code, or "nonqualified stock
options," which are not intended to so qualify.

SECTION 2. Definitions.

      As used in the Plan, the following terms shall have the meanings set forth
below:

      "Board" shall mean the Board of Directors of the Company.

      "Cause" shall have the meaning set forth in Section 7(c) hereof.

      "Change in Control" shall be deemed to occur if, subsequent to the
effective date of this Plan, (i) any "person" (as that term is used in Sections
13 and 14(d) (2) of the Exchange Act) is or becomes the beneficial owner (as
that term is used in Section 13 (d) of the Exchange Act), directly or
indirectly, of 30% or more of either the outstanding shares of Common Stock or
the combined voting power of the Company's then outstanding voting securities
entitled to vote generally, (ii) during any period of two consecutive years,
individuals who constitute the Board at the beginning of such period cease for
any reason to constitute at least a majority thereof, unless the election or the
nomination for election by the Company's shareholders of each new director was
approved by a vote of at least three-quarters of the directors then still in
office who were directors at the beginning of the period or (iii) the Company
undergoes a liquidation or dissolution or a sale of all or substantially all of
the assets of the Company. Any merger, consolidation or corporate reorganization
in which the owners of the combined voting power of the Company's then
outstanding securities entitled to vote generally prior to said combination, own
50% or more of the resulting entity's outstanding securities entitled to vote
generally shall not, by itself, be considered a Change in Control.
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      "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations thereunder.

      "Committee" shall mean the Compensation Committee of the Board or any
other committee of the Board designated from time to time by the Board to
administer the Plan.

      "Common Stock" shall mean the common stock of the Company, $0.01 par
value.

      "Eligible Person" means any person who is an employee, officer, director,
consultant or advisor of the Company or any affiliate, or any person who is
determined by the Committee to be a prospective employee, officer, director,
consultant or advisor of the Company or any affiliate.

      "Employee" shall mean any person who is an employee of the Company or any
parent or subsidiary thereof within the meaning of Treasury Regulations Section
1.421-7(h).

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

      "Fair Market Value" of a Common Stock as of a given date shall mean the
per share value of a share of Common Stock as determined by the Committee in
good faith taking into consideration all factors that it deems appropriate,
including, without limitation, recent sales of shares of Common Stock in
transactions negotiated at arms' length; provided, however, that in the event
that the Common Stock becomes listed or traded on a securities exchange or
market, the Fair Market Value shall be the closing sales price of the Common
Stock on the applicable exchange or market on the trading day immediately
preceding the date as of which Fair Market Value is to be determined or, in the
absence of any reported sales of Common Stock on such date, on the first
preceding date on which any such sale shall have been reported.

      "Incentive Stock Option" or "ISO" shall mean a stock option granted under
Section 6(a) of the Plan that is intended to qualify as an "incentive stock
option" under Section 422 of the Code or any successor provision thereto.

      "Non-Qualified Stock Option" or "NSO" shall mean a stock option granted
under Section 6(a) of the Plan that is not an Incentive Stock Option.

      "Option" shall mean an Incentive Stock Option or a Nonqualified Stock
Option.

      "Optionee" shall mean an individual to whom an Option has been granted,
which Option has not expired, under the Plan.

      "Option Agreement" shall mean an agreement between the Company and an
Optionee under which the Optionee may purchase Common Stock under the Plan.

      "Option Price" shall mean the price at which each share of Common Stock
subject to an Option may be purchased, determined in accordance with Section
6(a) hereof.

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      "Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.

      "Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation as in effect from time to
time.

      "SEC" shall mean the Securities and Exchange Commission, or any successor
thereto.

      "Subsidiary" shall mean a subsidiary corporation of the Company, within
the meaning of Section 424(f) of the Code.

SECTION 3. Administration.

      The Plan shall be administered by the Committee comprised of three
directors selected by the Board. Solely to the extent deemed necessary or
advisable by the Board, each Committee member shall meet the definition of a
"nonemployee director" for purposes of Rule 16b-3 and of an "outside director"
under section 162(m) of the Code. A majority of the Committee shall constitute a
quorum, and the acts of the members of the Committee who are present at any
meeting thereof at which a quorum is present, or acts that are unanimously
approved by the members of the Committee in writing, shall be the acts of the
Committee. The Board shall also have the authority to exercise the powers and
duties of the Committee under the Plan, and/or to delegate to one or more
officers of the Company its authority under the Plan as and to the extent
permitted under Section 157 of the Delaware General Corporation Law or other
applicable law. Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on the Committee
by the Plan, the Committee shall have full power and authority to: (i) designate
the Eligible Persons to whom an Option shall be granted; (ii) the time or times
at which an Option shall be granted, (iii) determine the type of Option to be
granted; (iv) determine the number of shares of Common Stock subject to each
Option; (v) determine the Option Price and the time or times when each Option
shall become exercisable and the duration of the exercise period; (vi) determine
the terms and conditions of any Option; (vii) determine whether, to what extent,
and under what circumstances Awards may be settled or exercised in cash, shares
of Common Stock, other securities, other Options or other property, or canceled,
forfeited, or suspended and the method or methods by which an Option may be
settled, exercised, canceled, forfeited, or suspended; (viii) interpret and
administer the Plan and any instrument or agreement relating to an Option made
under the Plan; (ix) establish, amend, suspend, rescind or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (x) make any other determination and take any
other action that the Committee deems necessary or desirable for the proper
administration of the Plan. All such actions and determinations shall be within
the sole discretion of the Committee and shall be final, conclusive, and binding
upon all Persons.

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SECTION 4. Shares Available for Options.

      (a)   Shares Available: Subject to adjustment as provided in Section 4(c),
            the maximum aggregate number of shares of Common Stock which may be
            issued and sold under the Plan shall be 1,000,000 shares. The number
            of shares of Common Stock reserved for issuance under the Plan shall
            at no time be less than the maximum number of shares which may be
            purchased at any time pursuant to outstanding Options. Shares of
            Common Stock covered by an Option that shall have been exercised
            shall not again be available for an Option grant. If any Option
            shall terminate or expire for any reason without being wholly
            exercised, the number of shares to which such forfeited, terminated
            or expired Option relates shall again be available for grant
            hereunder.

      (b)   Sources of Shares Deliverable Under Options. Shares of Common Stock
            issued and sold under the Plan may consist, in whole or in part, of
            authorized and unissued shares or treasury shares.

      (c)   Adjustments. In the event of a dividend or other distribution
            (whether in the form of cash, securities, or other property),
            recapitalization, stock split, reverse stock split, reorganization,
            merger, consolidation, split-up, spin-off, combination, repurchase,
            or exchange of shares of Common Stock or other securities of the
            Company, issuance of warrants or other rights to purchase shares of
            Common Stock or other securities of the Company, or in the case of
            any other transaction described in section 424(a) of the Code, the
            Committee shall, in such manner as it may deem equitable and
            appropriate, change any or all of (i) the maximum aggregate number
            of shares that may be issued and sold under Section 4(a) hereof,
            (ii) the maximum aggregate number of shares that may be subject to
            Options granted to any one individual under Section 6(a)(iii)
            hereof, (iii) the number and type of shares subject to outstanding
            Options and/or the Option Price; provided, in each case, that with
            respect to Incentive Stock Options, no such adjustment shall be
            authorized to the extent that such authority would cause a violation
            of Section 422(b)(1) of the Code, or any successor provision
            thereto; and provided, further, that the number of shares subject to
            any Option denominated in shares of Common Stock shall always be a
            whole number. In the event of any merger, consolidation,
            reorganization or similar corporate event in which shares of the
            Common Stock are to be exchanged for payment of cash (the "Cash
            Consideration"), the Committee may, in its discretion, (i) make
            equitable adjustments as provided above or (ii) cancel any
            outstanding Option in exchange for payment in cash of an amount
            equal to the excess (if any) of (A) the Cash Consideration per share
            multiplied by the shares underlying such Option over (B) the Option
            Price for such shares.

SECTION 5. Eligibility.

      All Eligible Persons are eligible to receive a grant of an Option under
the Plan.

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SECTION 6. Options.

      (a)   Options. Subject to the provisions of the Plan, the Committee's
            authority hereunder shall include the following terms and conditions
            and such additional terms and conditions as the Committee shall
            determine that are not inconsistent with the provisions of the Plan.

            (i)   Option Grant. The Committee shall, in its sole discretion,
                  determine and designate from time to time those Eligible
                  Persons who are to be granted an Option. The grant of an
                  Option shall first be effective upon the date it is approved
                  by the Committee, except to the extent the Committee shall
                  specify a later date upon which the grant of an Option shall
                  first be effective. The Company and the Optionee shall execute
                  an Option Agreement which shall set forth such terms and
                  conditions of the Option as may be determined by the Committee
                  to be consistent with the Plan, and which may include
                  additional provisions and restrictions that are not
                  inconsistent with the Plan. Notwithstanding the foregoing,
                  Incentive Stock Options may only be granted to Eligible
                  Persons who are Employees.

            (ii)  Maximum Limit. Notwithstanding anything elsewhere in the Plan
                  to the contrary, the maximum number of shares of Common Stock
                  that may be subject to Options granted to any Optionee during
                  any one calendar year shall be 500,000 shares, subject to
                  adjustments as provided in Section 4(c) hereof.

            (iii) Option Price. The Option Price in respect of an Option shall
                  be determined by the Committee; provided, however, that in the
                  case of an Incentive Stock Option, the Option Price shall not
                  be less than 100 percent of the Fair Market Value of a share
                  of Common Stock on the date of grant.

            (iv)  Vesting. An Option shall vest and become exercisable in the
                  manner and subject to such conditions provided by the
                  Committee and set forth in the Option Agreement. The
                  Committee, in its sole discretion, may accelerate the
                  exercisability of any Option at anytime. The period during
                  which a vested Option may be exercised shall be determined by
                  the Committee, subject to such limitations as may apply upon
                  the termination of an Optionee's employment or other service
                  or as otherwise specified by the Committee in the Option
                  Agreement.

            (v)   Time and Method of Exercise. The Committee shall determine the
                  time or times at which an Option may be exercised in whole or
                  in part, and the method or methods by which, and the form or
                  forms (which may include, without limitation, cash, check
                  acceptable to the Company, shares of Common Stock already
                  owned for more than six months, a

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                  "cashless-broker" exercise (through procedures approved by the
                  Company), other securities or other property, or any
                  combination thereof) in which payment of the Option Price may
                  be made or deemed to have been made.

      (b)   Substitution, Cancellation and Rescission of Options.

            (i)   Options may be granted from time to time in substitution for
                  similar awards held by employees of other corporations who
                  become Eligible Persons as the result of a merger or
                  consolidation of the employing corporation with the Company or
                  any subsidiary, or the acquisition by the Company or any
                  subsidiary of the assets of the employing corporation, or the
                  acquisition by the Company or any subsidiary or an affiliate
                  of stock of the employing corporation.

            (ii)  The Committee shall have the authority to effect, at any time
                  and from time to time, with the consent of the affected
                  Optionees, the cancellation of any or all outstanding Options
                  and the grant in substitution therefor of new Options covering
                  the same or different numbers of shares of Common Stock and
                  having an Option Price which may be the same as or different
                  than the Option Price of the cancelled Options.

            (iii) The Committee may provide in an Option Agreement that the
                  Company may cancel, suspend or otherwise limit any Options if
                  the Optionee engages in activity that is detrimental to the
                  Company.

      (c)   General.

            (i)   Options May Be Granted Separately or Together. Options may, in
                  the discretion of the Committee, be granted either alone or in
                  addition to any other Option granted under the Plan or any
                  award granted under any other plan of the Company or any
                  affiliate.

            (ii)  Limits on Transfer of Options.

                  (A) Except as provided in (C) below, each Option, and each
                  right under any Option, shall be exercisable only by the
                  Optionee during the Optionee's lifetime, or, if permissible
                  under applicable law and to the extent permitted by the
                  Committee, by the Optionee's guardian or legal representative.

                  (B) Except as provided in (C) below, no Option and no right
                  thereunder may be assigned, alienated, pledged, attached, sold
                  or otherwise transferred or encumbered by an Optionee
                  otherwise than by will or by the laws of descent and
                  distribution, and any such purported assignment, alienation,
                  pledge, attachment, sale, transfer or

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                  encumbrance shall be void and unenforceable against the
                  Company or any affiliate.

                  (C) Notwithstanding anything in the Plan to the contrary and
                  to the extent specifically provided by the Committee with
                  respect to a grant, a Nonqualified Stock Option may be
                  transferred to immediate family members or related family
                  trusts, limited partnerships or similar entities or Persons or
                  on such terms and conditions as the Committee may establish
                  from time to time.

            (iii) Term of Options. The term of each Option shall be for such
                  period as may be determined by the Committee; provided, that
                  in no event shall such term of any Option exceed a period of
                  10 years from the date of its grant.

            (iv)  Delivery of Shares or other Securities and Payment of
                  Consideration. No shares of Common Stock shall be delivered
                  pursuant to any Option until payment in full of any amount
                  required to be paid pursuant to the Plan or the applicable
                  Option Agreement (including, without limitation, any Option
                  Price, tax payment or tax withholding) is received by the
                  Company. Such payment may be made by such method or methods
                  and in such form or forms as the Committee shall determine,
                  including, without limitation, cash, shares of Common Stock,
                  other securities, other Options or other property, withholding
                  of shares of Common Stock, cashless exercise with simultaneous
                  sale, or any combination thereof; provided that the combined
                  value, as determined by the Committee, of all cash and cash
                  equivalents and the fair market value of any such shares or
                  other property so tendered to the Company, as of the date of
                  such tender, is at least equal to the full amount required to
                  be paid pursuant to the Plan or the applicable Option
                  Agreement to the Company.

      (d)   Additional Rules for ISOs.

            (i)   Annual Limits. No Incentive Stock Option shall be granted to
                  an Optionee as a result of which the aggregate Fair Market
                  Value (determined as of the date of grant) of the stock with
                  respect to which "incentive stock options" are exercisable for
                  the first time in any calendar year under the Plan and any
                  other stock option plans of the Company, any Subsidiary, or
                  any parent corporation, would exceed $100,000, determined in
                  accordance with section 422(d) of the Code. This limitation
                  shall be applied by taking options into account in the order
                  in which granted. Any Option intended to be an Incentive Stock
                  Option that is granted in excess of such limit shall instead
                  be treated as a Nonqualified Stock Option.

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            (ii)  Termination of Employment. An Incentive Stock Option may
                  provide that such Option may be exercised not later than three
                  months following termination of employment of the Optionee
                  with the Company and all Subsidiaries, subject to special
                  rules relating to death and disability, as and to the extent
                  determined by the Committee to be consistent with the
                  requirements of section 422 of the Code and Treasury
                  Regulations thereunder.

            (iii) Other Terms and Conditions. Any Incentive Stock Option granted
                  hereunder shall contain such additional terms and conditions,
                  not inconsistent with the terms of this Plan, as are deemed
                  necessary or desirable by the Committee, which terms, together
                  with the terms of this Plan, shall be intended and interpreted
                  to cause such Incentive Stock Option to qualify as an
                  "incentive stock option" under section 422 of the Code. Such
                  terms shall include, if applicable, limitations on Incentive
                  Stock Options granted to ten-percent owners of the Company as
                  determined under sections 422(b)(6) and 424(d) of the Code. An
                  Option Agreement for an Incentive Stock Option shall provide
                  that such Option shall be treated as a Nonqualified Stock
                  Option to the extent that certain requirements applicable to
                  "incentive stock options" under the Code shall not be
                  satisfied.

            (iv)  Disqualifying Dispositions. If shares of Common Stock acquired
                  by exercise of an Incentive Stock Option are disposed of
                  within two years following the Date of Grant or one year
                  following the transfer of such shares to the Optionee upon
                  exercise, the Optionee shall, promptly following such
                  disposition, notify the Company in writing of the date and
                  terms of such disposition and provide such other information
                  regarding the disposition as the Committee may reasonably
                  require.

SECTION 7. Termination of Service

      (a)   Death. Unless otherwise provided by the Committee and set forth in
            the Option Agreement, if an Optionee shall die at any time after the
            date of grant and while he is an Eligible Person, the executor or
            administrator of the estate of the decedent, or the person or
            persons to whom an Option shall have been validly transferred in
            accordance with Section 6(c) hereof pursuant to will or the laws of
            descent and distribution, shall have the right, during the period
            ending one year after the date of the Optionee's death (subject to
            the term of the Option), to exercise the Optionee's Option to the
            extent that it was exercisable at the date of the Optionee's death
            and shall not have been previously exercised.

      (b)   Disability. Unless otherwise provided by the Committee and set forth
            in the Option Agreement, if an Optionee's employment or other
            service with the Company or any Subsidiary shall be terminated as a
            result of his permanent

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            and total disability (within the meaning of section 22(e)(3) of the
            Code) at any time after the date of grant and while he is an
            Eligible Person, the Optionee (or in the case of an Optionee who is
            legally incapacitated, his guardian or legal representative) shall
            have the right, during a period ending one year after the date of
            his disability (subject to the term of the Option), to exercise an
            Option to the extent that it was exercisable at the date of such
            termination of employment or other service and shall not have been
            exercised.

      (c)   Termination for Cause. Unless otherwise provided by the Committee
            and set forth in the Option Agreement, if an Optionee's employment
            or other service with the Company or any Subsidiary shall be
            terminated for Cause, the Optionee's right to exercise any
            unexercised portion of an Option shall immediately terminate and all
            rights thereunder shall cease. Unless otherwise provided by the
            Committee and set forth in the Option Agreement, termination for
            "Cause" shall mean (i) the failure by the Optionee to substantially
            perform his duties (other than any such failure resulting from his
            death or disability); (ii) conduct which is detrimental to the
            Company's reputation, goodwill or business operations; (iii) the
            negligent performance by the Optionee of his duties to the Company;
            (iv) willful fraud or dishonesty in connection with the Optionee's
            performance of duties hereunder; or (v) the conviction of the
            Optionee by a court of competent jurisdiction of a felony or a crime
            involving moral turpitude; provided, however, that in the event the
            Optionee shall be a party to any employment agreement with the
            Company that provides for a definition of "Cause" that is different
            from the foregoing, then such definition in such employment
            agreement shall govern with respect to the Optionee for the purposes
            of this Plan. The Committee shall have the power, exercisable in a
            reasonable manner, to determine whether the Optionee has been
            terminated for Cause and the date upon which such termination for
            Cause occurs. Any such determination shall be final, conclusive and
            binding upon the Optionee.

      (d)   Other Termination of Service. Unless otherwise provided by the
            Committee and set forth in the Option Agreement, if an Optionee's
            employment or other service with the Company or any Subsidiary shall
            be terminated for any reason other than death, permanent and total
            disability or termination for Cause, the Optionee shall have the
            right, during the period ending 90 days after such termination
            (subject to the term of the Option), to exercise an Option to the
            extent that it was exercisable at the date of such termination and
            shall not have been exercised. For purposes of this Section 7(d), an
            Optionee shall not be considered to have terminated employment or
            other service with the Company or any Subsidiary until the
            expiration of the period of any military, sick leave or other bona
            fide leave of absence, up to a maximum period of 90 days or such
            greater period during which the Optionee is guaranteed reemployment
            either by statute or contract.

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SECTION 8 Amendment and Termination.

      Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Option Agreement or in the Plan:

      (a)   Amendments to the Plan. The Board or the Committee may amend, alter,
            suspend, discontinue, or terminate the Plan without the consent of
            any stockholder, Participant, Optionee or beneficiary of an Option,
            or other Person; provided, however, notwithstanding any other
            provision of the Plan or any Option Agreement, without the approval
            of the stockholders of the Company no such amendment, alteration,
            suspension, discontinuation, or termination shall be made that would
            increase the total number of shares available for Options under the
            Plan, except as provided in Section 4(c) of the Plan.

      (b)   Amendments to Options. The Committee may waive any conditions or
            rights under, amend any terms of, or alter any Option theretofore
            granted, provided no change in any Option shall reduce the benefit
            to the Optionee without the consent of such Optionee.

SECTION 9. Change in Control.

      Notwithstanding any other provision of this Plan to the contrary, in the
event of a Change in Control of the Company, the Committee may, in its sole
discretion, provide for all outstanding Options to become fully vested at such
time as determined by the Committee.

SECTION 11 Stock Certificates

      (a)   Issuance of Certificates. Subject to Section 11(b) hereof, the
            Company shall issue a stock certificate in the name of the Optionee
            (or other person exercising the Option in accordance with the
            provisions of the Plan) for the shares of Common Stock purchased by
            exercise of an Option as soon as practicable after due exercise and
            payment of the aggregate Option Price for such shares. A separate
            stock certificate or separate stock certificates shall be issued for
            any shares of Common Stock purchased pursuant to the exercise of an
            Option that is an Incentive Stock Option, which certificate or
            certificates shall not include any shares of Common Stock that were
            purchased pursuant to the exercise of an Option that is a
            Nonqualified Stock Option.

      (b)   Conditions. The Company shall not be required to issue or deliver
            any certificate for shares of Common Stock purchased upon the
            exercise of any Option granted hereunder or any portion thereof
            prior to fulfillment of all of the following conditions:

            (i)   the completion of any registration or other qualification of
                  such shares, under any federal or state law or under the
                  rulings or regulations of the

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                  SEC or any other governmental regulatory body, that the
                  Committee shall in its sole discretion deem necessary or
                  advisable;

            (ii)  the obtaining of any approval or other clearance from any
                  federal or state governmental agency which the Committee shall
                  in its sole discretion determine to be necessary or advisable;

            (iii) the lapse of such reasonable period of time following the
                  exercise of the Option as the Committee from time to time may
                  establish for reasons of administrative convenience;

            (iv)  satisfaction by the Optionee of all applicable withholding
                  taxes or other withholding liabilities; and

            (v)   if required by the Committee, in its sole discretion, the
                  receipt by the Company from an Optionee of (A) a
                  representation in writing that the shares of Common Stock
                  received upon exercise of an Option are being acquired for
                  investment and not with a view to distribution and (B) such
                  other representations and warranties as are deemed necessary
                  by counsel to the Company.

      (c)   Legends. The Company reserves the right to legend any certificate
            for shares of Common Stock, conditioning sales of such shares upon
            compliance with applicable federal and state securities laws and
            regulations.

SECTION 12. General Provisions.

      (a)   No Rights to Awards. No Eligible Person or other Person shall have
            any claim to be granted any Option, there is no obligation for
            uniformity of treatment of Eligible Persons or holders or
            beneficiaries of Options and the terms and conditions of Options
            need not be the same with respect to each recipient.

      (b)   Withholding. The Company or any affiliate is authorized to withhold
            from any payment due or transfer made under any Option or under the
            Plan or from any compensation or other amount owing to an Optionee
            the amount (in cash, shares, other securities, shares that would
            otherwise be issued pursuant to such Option, other Options or other
            property) of any applicable taxes payable in respect of an Option,
            its exercise, the lapse of restrictions thereon, or any payment or
            transfer under an Option or under the Plan and to take such other
            action as may be necessary in the opinion of the Company to satisfy
            all obligations for the payment of such taxes. In addition, the
            Committee may provide, in an Option Agreement, that the Optionee may
            direct the Company to satisfy such Optionee's tax obligation through
            the withholding of shares otherwise to be acquired upon the exercise
            or payment of such Option.

      (c)   No Right to Employment. The grant of an Option shall not be
            construed as giving the Optionee the right to be retained in the
            employ of the Company or

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            any affiliate. Further, the Company or an affiliate may at any time
            dismiss an Optionee from employment, free from any liability or any
            claim under the Plan, unless otherwise expressly provided in the
            Plan or in any Option Agreement.

      (d)   Governing Law. The validity, construction, and effect of the Plan
            and any rules and regulations relating to the Plan shall be
            determined in accordance with the laws of the State of Delaware and
            applicable federal law.

      (e)   Severability. If any provision of the Plan or Option Agreement is or
            becomes or is deemed to be invalid, illegal, or unenforceable in any
            jurisdiction or as to any Person or Option, or would disqualify the
            Plan or any Option under any law deemed applicable by the Committee,
            such provision shall be construed or deemed amended to conform to
            the applicable laws, or if it cannot be construed or deemed amended
            without, in the determination of the Committee, materially altering
            the intent of the Plan or the Option Agreement, such provision shall
            be stricken as to such jurisdiction, Person or Option and the
            remainder of the Plan and any such Option shall remain in full force
            and effect.

      (f)   Other Laws. The Committee may refuse to issue or transfer any shares
            or other consideration under an Option if, acting in its sole
            discretion, it determines that the issuance of transfer or such
            shares or such other consideration might violate any applicable law
            or regulation or entitle the Company to recover the same under
            Section 16(b) of the Exchange Act, and any payment tendered to the
            Company by an Optionee, other holder or beneficiary in connection
            with the exercise of such Option shall be promptly refunded to the
            relevant Optionee, holder or beneficiary.

      (g)   No Trust or Fund Created. Neither the Plan nor the Option shall
            create or be construed to create a trust or separate fund of any
            kind or a fiduciary relationship between the Company or any
            affiliate and an Optionee or any other Person. To the extent that
            any Person acquires a right to receive payments from the Company or
            any affiliate pursuant to an Option, such right shall be no greater
            than the right of any general unsecured creditor of the Company or
            any affiliate.

      (h)   No Fractional Shares. No fractional shares shall be issued or
            delivered pursuant to the Plan or any Option Agreement, and the
            Committee shall determine whether cash, other securities, or other
            property shall be paid or transferred in lieu of any fractional
            shares or whether such fractional shares or any rights thereto shall
            be canceled, terminated, or otherwise eliminated.

      (i)   Headings. Headings are given to the Sections and subsections of the
            Plan solely as a convenience to facilitate reference. Such headings
            shall not be deemed in any way material or relevant to the
            construction or interpretation of the Plan or any provision thereof.

                                       12
<PAGE>
      (j)   Section 162(m) IPO Transition Rule. The Plan is intended to qualify
            for the transition relief provided under Treasury Regulation Section
            1.162-27(f). Accordingly, all compensation realized by Optionees in
            connection with Options granted under the Plan within the reliance
            period described therein is intended to be exempt from the
            limitation on tax deductibility under section 162(m) of the Code.
            For purposes of the Plan, the reliance period will expire on the
            earlier of (i) the expiration of the Plan, (ii) a "material
            modification" of the Plan (within the meaning of Treasury Regulation
            Section 1.162-27(h)(1)(iii)), (iii) the issuance of all Common Stock
            that has been allocated under the Plan, or (iv) the first meeting of
            Company stockholders at which directors are to be elected that
            occurs after the close of the third calendar year following the
            calendar year in which the Common Stock is first registered under
            Section 12 of the Exchange Act.

      (k)   Compliance with State Blue Sky Requirements. Prior to the date that
            the Common Stock is first registered under Section 12 of the
            Exchange Act and notwithstanding anything in this Plan or any Option
            Agreement to the contrary, this Plan shall be administered in
            compliance with the applicable requirements under state securities
            laws and regulations.

SECTION 13. Effective Date of the Plan.

      The Plan shall be effective upon the effective date of the Company's Joint
Plan of Reorganization effected as a result of the Company's petition for
reorganization under chapter 11 of the Bankruptcy Code, as filed July 31, 2001.

SECTION 14. Term of the Plan.

      No Option shall be granted under the Plan after the 10th anniversary of
the effective date of the Plan. However, unless otherwise expressly provided in
the Plan or in an applicable Option Agreement, any Option granted prior to such
termination, and the authority of the Board or the Committee to amend, alter,
adjust, suspend, discontinue, or terminate any such Option or to waive any
conditions or rights under such Option, shall extend beyond such termination
date.

                                       13<PAGE>

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

                            ANADARKO FINANCE COMPANY
                                     COMPANY

                         ANADARKO PETROLEUM CORPORATION
                                    GUARANTOR

                                       AND

                              THE BANK OF NEW YORK
                                     TRUSTEE

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

                                    INDENTURE

                                 DATED AS OF [ ]

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

                             SENIOR DEBT SECURITIES

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

<PAGE>

                            ANADARKO FINANCE COMPANY
         RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939, AS
              AMENDED, AND INDENTURE, DATED AS OF SEPTEMBER 1, 1997

  <Table>
  <Caption>
   TRUST INDENTURE
     ACT SECTION                                      INDENTURE SECTION
  <S>                                                   <C>
  Section 310 (a)(1)  .......................................  609
              (a)(2)  .......................................  609
              (a)(3)  .......................................  Not Applicable
              (a)(4)  .......................................  Not Applicable
              (a)(5)  .......................................  609
              (b)     .......................................  608
  Section 311         .......................................  613
  Section 312 (a)     .......................................  701
                      .......................................  702(a)
              (b)     .......................................  702(b)
              (c)     .......................................  702(c)
  Section 313 (a)     .......................................  703
              (b)     .......................................  *
              (c)     .......................................  *
              (d)     .......................................  703
  Section 314 (a)     .......................................  704
              (a)(4)  .......................................  1006
              (b)     .......................................  Not Applicable
              (c)(1)  .......................................  102
              (c)(2)  .......................................  102
              (c)(3)  .......................................  Not Applicable
              (d)     .......................................  Not Applicable
              (e)     .......................................  102
  Section 315 (a)     .......................................  601(a)
              (b)     .......................................  602
              (c)     .......................................  601(b)
              (d)     .......................................  601(c)
              (d)(1)  .......................................  601(a)(1)
              (d)(2)  .......................................  601(c)(2)
              (3)     .......................................  601(c)(3)
              (e)(d)  .......................................  514
  Section 316 (a)     .......................................  101
              (a)(1)(A.......................................  502, 512
              (a)(1)(B.......................................  513
              (a)(2)  .......................................  Not Applicable
              (b)     .......................................  508
              (c)     .......................................  104(d)
  Section 317 (a)(1)  .......................................  503
              (a)(2)  .......................................  504
              (b)     .......................................  1003
  Section 318 (a)     .......................................  107
  </Table>
----------

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

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
   PARTIES........................................................................................................1
   Recitals Of The Company:.......................................................................................1

ARTICLE I Definitions And Other Provisions Of General Application.................................................1
   Section 101.         Definitions...............................................................................1
   Section 102.         Compliance Certificates and Opinions......................................................6
   Section 103.         Form of Documents Delivered to Trustee....................................................6
   Section 104.         Acts of Holders...........................................................................7
   Section 105.         Notices, Etc., to Trustee, Company and Guarantor..........................................8
   Section 106.         Notice to Holders; Waiver.................................................................8
   Section 107.         Conflict with Trust Indenture Act.........................................................8
   Section 108.         Effect of Headings and Table of Contents..................................................8
   Section 109.         Successors and Assigns....................................................................8
   Section 110.         Separability Clause.......................................................................8
   Section 111.         Benefits of Indenture.....................................................................9
   Section 112.         Governing Law.............................................................................9
   Section 113.         Legal Holidays............................................................................9
   Section 114.         Securities in a Composite Currency, Currency Unit, Foreign Currency.......................9
   Section 115.         Judgment Currency.........................................................................9
   Section 116.         Interest Act (Canada)....................................................................10

ARTICLE II Security Forms........................................................................................10
   Section 201.         Forms Generally..........................................................................10
   Section 202.         Form of Face of Security.................................................................10
   Section 203.         Form of Reverse of Security..............................................................12
   Section 204.         Global Securities........................................................................15
   Section 205.         Form of Trustee's Certificate of Authentication..........................................16
   Section 206.         Form of Guarantee........................................................................16

ARTICLE III THE SECURITIES.......................................................................................17
   Section 301.         Amount Unlimited; Issuable in Series.....................................................17
   Section 302.         Denominations............................................................................19
   Section 303.         Execution, Authentication, Delivery and Dating...........................................19
   Section 304.         Temporary Securities.....................................................................20
   Section 305.         Registration, Registration of Transfer and Exchange......................................20
   Section 306.         Mutilated, Destroyed, Lost and Stolen Securities.........................................22
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
   Section 307.         Payment of Interest; Interest Rights Preserved...........................................23
   Section 308.         Persons Deemed Owners....................................................................24
   Section 309.         Cancellation.............................................................................24
   Section 310.         Computation of Interest..................................................................24
   Section 311.         CUSIP Numbers............................................................................24

ARTICLE IV SATISFACTION AND DISCHARGE............................................................................24
   Section 401.         Satisfaction and Discharge of Indenture..................................................24
   Section 402.         Application of Trust Money...............................................................25

ARTICLE V REMEDIES...............................................................................................25
   Section 501.         Events of Default........................................................................25
   Section 502.         Acceleration of Maturity; Rescission and Annulment.......................................27
   Section 503.         Collection of Indebtedness and Suits for Enforcement by Trustee..........................27
   Section 504.         Trustee May File Proofs of Claim.........................................................28
   Section 505.         Trustee May Enforce Claims Without Possession of Securities..............................28
   Section 506.         Application of Money Collected...........................................................29
   Section 507.         Limitation on Suits......................................................................29
   Section 508.         Unconditional Right of Holders to Receive Principal, Premium and Interest................29
   Section 509.         Restoration of Rights and Remedies.......................................................30
   Section 510.         Rights and Remedies Cumulative...........................................................30
   Section 511.         Delay or Omission Not Waiver.............................................................30
   Section 512.         Control by Holders.......................................................................30
   Section 513.         Waiver of Past Defaults..................................................................30
   Section 514.         Undertaking for Costs....................................................................31
   Section 515.         Waiver of Usury, Stay or Extension Laws..................................................31

ARTICLE VI THE TRUSTEE...........................................................................................31
   Section 601.         Certain Duties and Responsibilities......................................................31
   Section 602.         Notice of Defaults.......................................................................32
   Section 603.         Certain Rights of Trustee................................................................32
   Section 604.         Not Responsible for Recitals or Issuance of Securities...................................33
   Section 605.         May Hold Securities......................................................................33
   Section 606.         Money Held in Trust......................................................................33
   Section 607.         Compensation and Reimbursement...........................................................33
   Section 608.         Disqualification; Conflicting Interests..................................................34
   Section 609.         Corporate Trustee Required; Eligibility..................................................34
   Section 610.         Resignation and Removal; Appointment of Successor........................................34
   Section 611.         Acceptance of Appointment by Successor...................................................36
</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
   Section 612.         Merger, Conversion, Consolidation or Succession to Business..............................36
   Section 613.         Preferential Collection of Claims Against Company........................................36
   Section 614.         Appointment of Authenticating Agent......................................................37

ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY....................................................38
   Section 701.         Company to Furnish Trustee Names and Addresses of Holders................................38
   Section 702.         Preservation of Information; Communications to Holders...................................38
   Section 703.         Reports by Trustee.......................................................................39
   Section 704.         Reports by Company.......................................................................39

ARTICLE VIII CONSOLIDATION, MERGER AND SALE......................................................................39
   Section 801.         Company and Guarantor May Consolidate, Etc., Only on Certain Terms.......................39
   Section 802.         Successor Substituted....................................................................40
   Section 803.         Assignment of  Company's Obligations.....................................................40

ARTICLE IX SUPPLEMENTAL INDENTURES...............................................................................41
   Section 901.         Supplemental Indentures Without Consent of Holders.......................................41
   Section 902.         Supplemental Indentures with Consent of Holders..........................................42
   Section 903.         Execution of Supplemental Indentures.....................................................43
   Section 904.         Effect of Supplemental Indentures........................................................43
   Section 905.         Conformity with Trust Indenture Act......................................................43
   Section 906.         Reference in Securities to Supplemental Indentures.......................................43

ARTICLE X COVENANTS..............................................................................................43
   Section 1001.        Payment of Principal, Premium and Interest...............................................43
   Section 1002.        Maintenance of Office or Agency..........................................................43
   Section 1003.        Money for Securities Payments to Be Held in Trust........................................44
   Section 1004.        Corporate Existence......................................................................45
   Section 1005.        Limitation on Liens......................................................................45
   Section 1006.        Statement by Officers as to Default......................................................46
   Section 1007.        Waiver of Certain Covenants..............................................................46

ARTICLE XI REDEMPTION OF SECURITIES..............................................................................47
   Section 1101.        Applicability of Article.................................................................47
   Section 1102.        Election to Redeem; Notice to Trustee....................................................47
   Section 1103.        Selection by Trustee of Securities to Be Redeemed........................................47
</TABLE>

                                     -iii-
<PAGE>

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
   Section 1104.        Notice of Redemption.....................................................................47
   Section 1105.        Deposit of Redemption Price..............................................................48
   Section 1106.        Securities Payable on Redemption Date....................................................48
   Section 1107.        Securities Redeemed in Part..............................................................48

ARTICLE XII SINKING FUNDS........................................................................................48
   Section 1201.        Applicability of Article.................................................................49
   Section 1202.        Satisfaction of Sinking Fund Payments with Securities....................................49
   Section 1203.        Redemption of Securities for Sinking Fund................................................49

ARTICLE XIII DEFEASANCE..........................................................................................49
   Section 1301.        Applicability of Article.................................................................49
   Section 1302.        Legal Defeasance.........................................................................49
   Section 1303.        Covenant Defeasance......................................................................51
   Section 1304.        Deposited Money and U.S. Government Obligations to be Held in Trust......................52
   Section 1305.        Repayment to Company or the Guarantor....................................................53

ARTICLE XIV GUARANTEES OF SECURITIES.............................................................................53
   Section 1401.        Unconditional Guarantees.................................................................53
   Section 1402.        Execution and Delivery of Notation of Guarantees.........................................54
</TABLE>

                                      -iv-

<PAGE>

                                     PARTIES

         INDENTURE, dated as of [         ], among ANADARKO FINANCE COMPANY, an
unlimited liability company organized under the laws of the province of Nova
Scotia, Canada (the "Company"), having its principal office at 1201 Lake Robbins
Drive, The Woodlands, Texas 77380-1046, ANADARKO PETROLEUM CORPORATION, a
corporation duly organized and existing under the laws of the State of Delaware
(the "Guarantor"), having its principal office at 1201 Lake Robbins Drive, The
Woodlands, Texas 77380-1046, and The Bank of New York, a New York banking
corporation (the "Trustee").

                            RECITALS OF THE COMPANY:

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

         The Guarantor has duly authorized the execution and delivery of this
indenture to provide for the issuance from time to time of its guarantee of the
Securities issued by the Company under this Indenture.

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

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

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                   ARTICLE I

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

Section 101. Definitions.

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

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

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

         (3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted at the
date of this instrument; and

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

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

                                       1

<PAGE>

         "Act," when used with respect to any Holder, has the meaning specified
in Section 104.

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

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

         "Board of Directors" of any Person means either the board of directors
of such Person or any duly authorized committee of that board.

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

         "Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
to close.

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

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

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

         "Consolidated Net Tangible Assets" means the aggregate amount of assets
of the Guarantor and its Restricted Subsidiaries (less applicable reserves and
other properly deductible items but including investments in non-consolidated
Persons) after deducting therefrom (a) all current liabilities (excluding any
portion thereof constituting Funded Debt by reason of being renewable or
extendible at the option of the obligor) and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on a consolidated balance sheet of the Guarantor
and its consolidated Subsidiaries and computed in accordance with generally
accepted accounting principles.

         "Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
and which, at the date hereof, is located at 101 Barclay Street, Floor 21W, New
York, New York 10286, Attention: Corporate Trust Administration, or at such
other address as the Trustee may designate from time to time by notice to the
Holders and the Company, or the principal corporate trust office of any
successor Trustee.

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

                                       2
<PAGE>

         "Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary for the Securities of such
series by the Company pursuant to Section 301.

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

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

         "Funded Debt" means all indebtedness of the Company or the Guarantor
for money borrowed which is not by its terms subordinated in right of payment to
the prior payment in full of the Securities (in the case of indebtedness of the
Company) or the Guarantees (in the case of indebtedness of the Guarantor),
having a maturity of more than 12 months from the date as of which the amount
thereof is to be determined or having a maturity of less than 12 months but by
its terms being (i) renewable or extendible beyond 12 months from such date at
the option of the obligor or (ii) issued in connection with a commitment by a
bank or other financial institution to lend so that such indebtedness is treated
as though it had a maturity in excess of 12 months pursuant to generally
accepted accounting principles.

         "Global Security" means a Security evidencing all or part of a series
of Securities, issued to and registered in the name of the Depositary for the
Securities of such series or its nominee.

         "Guarantees" has the meaning specified in Section 1401(a).

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

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

         "Indebtedness" means any indebtedness for money borrowed or
representing the deferred purchase price of property or assets purchased.

         "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301.

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

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

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

         "Mortgage" means and includes any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.

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

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

                                       3
<PAGE>

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

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

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

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

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

                  (iv) Securities, except to the extent provided in Section 1302
         or 1303, as the case may be, with respect to which the Company has
         effected defeasance as provided in Article Thirteen, which continues in
         effect;

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

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

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

                                       4
<PAGE>

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

         "Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as contemplated by
Section 301.

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

         "Principal Property" means any manufacturing plant, processing plant,
property interest in oil, gas, coal or other minerals in place or in geothermal
resources in place, pipeline, warehouse, office building or interest in real
property which is located in the United States or offshore the United States and
owned by the Guarantor or any Restricted Subsidiary, the gross book value
(without deduction of any depreciation or depletion reserves) of which on the
date as of which the determination is being made exceeds 2% of Consolidated Net
Tangible Assets, other than any such plant, property interest, pipeline,
warehouse, office building or interest in real property, or any portion of the
foregoing, which, in the opinion of the Board of Directors of the Guarantor, is
not of material importance to the total business conducted by the Guarantor and
its Subsidiaries as an entirety.

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

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

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

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

         "Restricted Subsidiary" means a Subsidiary of the Guarantor except a
Subsidiary of the Guarantor which (a) neither transacts any substantial portion
of its business nor regularly maintains any substantial portion of its fixed
assets within the United States or offshore the United States or (b) is engaged
primarily in financing the operations of the Guarantor or its Subsidiaries, or
both.

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

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

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

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

                                       5
<PAGE>

         "Subsidiary" of any Person means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person, or by such Person
and one or more other Subsidiaries of such Person. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.

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

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed,
except as provided in Section 905.

         "U.S. Government Obligations" means direct obligations of the United
States for the payment of which the full faith and credit of the United States
is pledged.

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

Section 102. Compliance Certificates and Opinions.

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

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

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

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

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

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

Section 103. Form of Documents Delivered to Trustee.

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

                                       6
<PAGE>

         Any certificate or opinion of an officer of the Company or the
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows that the certificate or opinion or representations with respect to the
matters upon which his certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company or the Guarantor (as the case may be) stating that the
information with respect to such factual matters is in the possession of the
Company or the Guarantor (as the case may be), unless such counsel knows that
the certificate or opinion or representations with respect to such matters are
erroneous.

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

Section 104. Acts of Holders.

         (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company and
the Guarantor. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in favor of
the Trustee and the Company and the Guarantor, if made in the manner provided in
this Section.

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

         (c) The ownership of Securities shall be proved by the Security
Register.

         (d) If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by Board Resolution of the Company, fix in advance a record date
(which may be any date not less than 10 nor more than 60 days before such
solicitation) for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after the record date, but only the Holders of record at
the close of business on the record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of the
Outstanding Securities or a series thereof have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities or a series
thereof shall be computed as of the record date.

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

                                       7
<PAGE>

Section 105. Notices, Etc., to Trustee, Company and Guarantor.

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

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

         (2) the Company or the Guarantor by the Trustee or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this instrument or sent by facsimile transmission to (832) 636-7077
and confirmed by voice at (832) 636-7085, in either case to the attention of
Treasurer, or at any other address previously furnished in writing to the
Trustee by the Company.

Section 106. Notice to Holders; Waiver.

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

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

Section 107. Conflict with Trust Indenture Act.

         If any provision hereof limits, qualifies or conflicts with the duties
imposed by operation of Section 318(c) of the Trust Indenture Act, such imposed
duties shall control.

Section 108. Effect of Headings and Table of Contents.

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

Section 109. Successors and Assigns.

         All covenants and agreements in this Indenture by the Company and the
Guarantor shall bind their respective successors and assigns, whether so
expressed or not.

Section 110. Separability Clause.

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

                                       8
<PAGE>

Section 111. Benefits of Indenture.

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

Section 112. Governing Law.

         THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 113. Legal Holidays.

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

Section 114. Securities in a Composite Currency, Currency Unit, Foreign
             Currency.

         Unless otherwise specified in an officer's Certificate delivered
pursuant to Section 301 of this Indenture with respect to a particular series of
Securities, whenever for purposes of this Indenture any action may be taken by
the Holders of a specified percentage in aggregate principal amount of
Securities of all series or all series affected by a particular action at the
time Outstanding and, at such time, there are Outstanding Securities of any
series which are denominated in a coin, currency or currencies other than
Dollars (including, but not limited to, any composite currency, currency units,
Foreign Currency), then the principal amount of Securities of such series which
shall be deemed to be Outstanding for the purpose of taking such action shall be
that amount of Dollars that could be obtained for such amount at the Market
Exchange Rate. For purposes of this Section 114, the term "Market Exchange Rate"
shall mean the noon Dollar buying rate in The City of New York for cable
transfers of such currency or currencies as published by the Federal Reserve
Bank of New York as of the most recent available date. If such Market Exchange
Rate is not so available for any reason with respect to such currency, the
Trustee shall use, in its sole discretion and without liability on its part,
such quotation of the Federal Reserve Bank of New York or quotations or rates of
exchange from one or more major banks in The City of New York or in the country
of issue of the currency in question, which for purposes of euros shall be
Brussels, Belgium, or such other quotations or rates of exchange as the Trustee
shall deem appropriate. The provisions of this paragraph shall apply in
determining the equivalent principal amount in respect of Securities of a series
denominated in a currency other than Dollars in connection with any action taken
by Holders of Securities pursuant to the terms of this Indenture.

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

Section 115. Judgment Currency.

         The Company and the Guarantor agree, to the fullest extent that they
may effectively do so under applicable law, that (a) if for the purpose of
obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of or interest on the Securities of any series (the
"Required Currency") into a currency in which a judgment will be rendered (the
"Judgment Currency"), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York the Required Currency with the Judgment Currency on the day on which
final unappealable judgment is entered, unless such day is not a Banking Day,
then, to the extent permitted by applicable law, the rate of exchange used shall
be the rate at

                                       9
<PAGE>

which in accordance with normal banking procedures the Trustee could purchase in
The City of New York the Required Currency with the Judgment Currency on the
Banking Day next preceding the day on which final unappealable judgment is
entered and (b) its obligations under this Indenture to make payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment (whether or not entered in accordance with
subsection (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture.

Section 116. Interest Act (Canada)

         For the purposes of the informational requirements of the Interest Act
(Canada) only, if a rate of interest applicable to a Security is computed by
reference to a 360 day year, the annual rate of interest which is equivalent to
such rate is such rate multiplied by the actual number of days in the year and
divided by 360.

                                   ARTICLE II

                                 SECURITY FORMS

Section 201. Forms Generally.

         The Securities of each series and any notations thereon relating to the
Guarantees shall be in substantially the form set forth in this Article, or in
such other form or forms as shall be established by or pursuant to a Board
Resolution of the Company with respect to the Securities or the Guarantor with
respect to the notations thereon relating to the Guarantees or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities
or Guarantees, as evidenced by their execution of the Securities or Guarantees.
If the form or forms of Securities of any series or Guarantees is established by
action taken pursuant to a Board Resolution of the Company (with respect to the
Securities) and the Guarantor (with respect to the Guarantees), either an
Officers' Certificate of the Company and the Guarantor shall certify that such
action shall have been duly taken or a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company or the Guarantor, as applicable, and, in either case, delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by Section
303 for the authentication and delivery of such Securities.

         The Trustee's certificates of authentication and the Form of Guarantee
shall be in substantially the form set forth in this Article.

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

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

Section 202. Form of Face of Security.

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

                                       10
<PAGE>

[AND THE ORIGINAL ISSUE DISCOUNT FOR THE SHORT ACCRUAL PERIOD IS AND THE METHOD
USED TO DETERMINE THE YIELD THEREFOR IS ]]

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

         [If a Global Security, -- insert legend required by Section 204 of the
Indenture] [If applicable, insert -- UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]

                            ANADARKO FINANCE COMPANY
                          -----------------------------

No. .........                                                $.................

                                                 CUSIP No.

         ANADARKO FINANCE COMPANY, an unlimited liability company organized
under the laws of the province of Nova Scotia, Canada (herein called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
........... ......................, or registered assigns, the principal sum of
...... ............................................... Dollars on ........
......................................... [If the Security is to bear interest
prior to Maturity, insert -- , and to pay interest thereon from ........ .. or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on ...... and ...... in each year, commencing
......., at the rate of ...% per annum, until the principal hereof is paid or
made available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the .... or .... (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be filled by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture].

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

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

                                       11
<PAGE>

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

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

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

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

Dated:

                                       ANADARKO FINANCE COMPANY

                                       By:

Attest:

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

Section 203. Form of Reverse of Security.

         This Security is one of a duly authorized issue of senior securities of
the Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of [ ] (herein called the "Indenture"),
among the Company, Anadarko Petroleum Corporation, a Delaware corporation
(herein called the "Guarantor," which term includes any successor guarantor
under the Indenture), and The Bank of New York (herein called the "Trustee,"
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement, of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Guarantor, the Trustee and the Holders
of the Securities and of the terms upon which the Securities and the Guarantees
(as defined below) are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [, limited in
aggregate principal amount to $..........].

         The Securities are senior unsecured obligations of the Company and are
guaranteed pursuant to guarantees (the "Guarantees") by the Guarantor. Each of
the Guarantees is a senior unsecured obligation of the Guarantor. Certain
limitations to the obligations of the Guarantor are set forth in further detail
in the Indenture. References herein to the Indenture or the Securities shall be
deemed also to refer to the Guarantees set forth in the Indenture except where
the context otherwise requires.

                                       12
<PAGE>

         [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than .... days' notice by mail, [if applicable, insert,
-- (1) on .............. in any year commencing with the year .... and ending
with the year .... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [on
or after .........., 20...], as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before .......... ......, .....%, and if
redeemed] during the 12-month period beginning ... ..... of the years indicated,

<Table>
<Caption>
                               REDEMPTION                                   REDEMPTION
           YEAR                   PRICE                  YEAR                  PRICE
         --------           -----------------          --------          -----------------
<S>                        <C>                          <C>              <C>

</Table>

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

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

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

</Table>

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

         [If applicable, insert -- Notwithstanding the foregoing, the Company
may not, prior to ............, redeem any Securities of this series as
contemplated by [Clause (2) of] the preceding paragraph as a part of, or in
anticipation of,

                                       13
<PAGE>

any refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than ....% per annum.]

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

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

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

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

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

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantor and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company or the Guarantor with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.

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

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

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

         [If a Definitive Security, insert -- As provided in the Indenture and
subject to certain limitations therein set forth, the transfer of this Security
is registerable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company in [if
applicable, insert -- any place where the principal of and any premium and
interest on this Security are payable] [if applicable, insert -- The City of New

                                       14
<PAGE>

York[, or, subject to any laws or regulations applicable thereto and to the
right of the Company (limited as provided in the Indenture) to rescind the
designation of any such transfer agent, at the [main] offices of in and in or at
such other offices or agencies as the Company may designate]], duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.]

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

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

         Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         No recourse under or upon any obligation, covenant or agreement of or
contained in the Indenture or of or contained in any Security, or for any claim
based thereon or otherwise in respect thereof, or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company, the Guarantor or of any successor Person, either
directly or through the Company, the Guarantor or any successor Person, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment, penalty or otherwise; it being expressly understood that all
such liability is hereby expressly waived and released by the acceptance hereof
and as a condition of, and as part of the consideration for, the Securities and
the execution of the Indenture.

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

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

         The Securities are governed by the laws of The State of New York.

Section 204. Global Securities.

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

                  THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
                  INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
                  NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY
                  NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR
                  SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN
                  THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY
                  BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
                  IN THE INDENTURE. EVERY SECURITY

                                       15
<PAGE>

                  AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF,
                  OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY SHALL BE A
                  GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH
                  LIMITED CIRCUMSTANCES.

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

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

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

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

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

                                       The Bank of New York,
                                       as Trustee

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

Section 206. Form of Guarantee.

         The notation on Securities relating to the Guarantee shall be in
substantially the following form:

                              NOTATION ON SECURITY
                              RELATING TO GUARANTEE

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

                                       16
<PAGE>

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

                                       Guarantor:

                                       ANADARKO PETROLEUM CORPORATION

                                       By:
                                         --------------------------------------

                                  ARTICLE III

                                 THE SECURITIES

Section 301.      Amount Unlimited; Issuable in Series.

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

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

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

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

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

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

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

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

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

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

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

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

                                       17
<PAGE>

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

         (12) if other than the currency of the United States of America, the
currency or currencies, including composite currencies, currency units, Foreign
Currency, in which payment of the principal of (and premium, if any) and
interest on the Securities of the series shall be payable, and the manner in
which any such currencies shall be valued against other currencies in which any
other Securities shall be payable;

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

         (14) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Global Securities and, in such case, the
Depositary or Depositaries for such Global Security or Securities, which
Depositary shall be, if then required by applicable law or regulation, a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and any circumstances other than those set forth in Section 305 in
which any such Global Security may be transferred to, and registered and
exchanged for Securities registered in the name of, a Person other than the
Depositary for such Global Security or a nominee thereof and in which any such
transfer may be registered;

         (15) any deletions from, modifications of or additions to Events of
Default set forth in Section 501 and covenants of the Company set forth in
Article Ten with respect to the Securities of such series; and

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

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

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

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

         There shall be established in or pursuant to a Board Resolution of the
Guarantor and set forth in an Officers' Certificate of the Guarantor or
established in one or more indenture supplements hereto, prior to the issuance
of Securities of any series, that the Guarantor shall guarantee such Securities
in accordance with the terms of the Indenture.

         Securities of any one series may, without the consent of the Holders of
such series, be issued at various times, may, without the consent of the Holders
of such series, be reopened for the issuance of additional Securities of such
series and shall be substantially identical, except as may otherwise be provided
in or pursuant to such Board Resolution of the Company or the Guarantor, as
applicable, and set forth in such Officers' Certificate of the Company or the
Guarantor, as applicable, or in any such indenture supplemental hereto.

         At the election of the Company, payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.

         If any of the terms of the series are established by action taken
pursuant to a Board Resolution of the Company with respect to the notes or the
Guarantor with respect to the Guarantees, an Officers' Certificate of the
Company or Guarantor, as applicable, shall certify that such action shall have
been duly taken or a copy of an

                                       18
<PAGE>

appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and the Guarantor, as applicable and, in
either case, delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities. With respect to Securities of a series subject to a Periodic
Offering, such Board Resolution or Officer's Certificate may provide general
terms for Securities of such series and provide either that the specific terms
of particular Securities of such series shall be specified in a Company Order or
that such terms shall be determined by the Company, or one or more of the
Company's agents designated in an Officer's Certificate, in accordance with a
Company Order.

Section 302. Denominations.

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

Section 303. Execution, Authentication, Delivery and Dating.

         The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.

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

         At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities; provided,
however, that in the case of Securities offered in a Periodic Offering, the
Trustee shall authenticate and deliver such Securities from time to time in
accordance with such other procedures (including, without limitation, the
receipt by the Trustee of oral or electronic instructions from the Company or
its duly authorized agents, thereafter promptly confirmed in writing) acceptable
to the Trustee as may be specified by or pursuant to a Company Order delivered
to the Trustee prior to the time of the first authentication of Securities of
such series. If the forms or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions of the Company and
the Guarantor as permitted by Sections 201 and 301, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive such
documents as it may reasonably request. The Trustee shall also be entitled to
receive, and (subject to Section 601) shall be fully protected in relying upon,
an Opinion of Counsel stating,

         (a) if the form or forms of such Securities has been established in or
pursuant to Board Resolutions of the Company and the Guarantor as permitted by
Section 201, that each such form has been established or will, when established
in compliance with the Company Order, be established in conformity with the
provisions of this Indenture;

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

         (c) that such Securities and Guarantees, when authenticated and
delivered by the Trustee and issued by the Company and the Guarantor in the
manner and subject to any conditions specified in such Opinion of

                                       19
<PAGE>

Counsel, will constitute valid and legally binding obligations of the Company
and the Guarantor, enforceable in accordance with their terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization, liquidation, fraudulent conveyance or transfer and other laws of
general applicability relating to or affecting the enforcement of creditors'
rights, to general equity principles, (ii) rights of acceleration, if any, and
(iii) the availability of equitable remedies may be limited by equitable
principles of general application, and such counsel need express no opinion with
regard to the enforceability of Section 607 or of a judgment denominated in a
currency other than U.S. Dollars, and (iv) to such other matters as shall be
specified in such Opinion of Counsel.

If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee. With respect to Securities of
a series offered in a Periodic Offering, the Trustee may rely, as to the
authorization by the Company of any of such Securities, the form or forms and
terms thereof and the legality, validity, binding effect and enforceability
thereof, upon the Opinion of Counsel and the other documents delivered pursuant
to Sections 201 and 301 and this Section, as applicable, in connection with the
first authentication of Securities of such series.

         Each Security shall be dated the date of its authentication.

         No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.

Section 304. Temporary Securities.

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

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

Section 305. Registration, Registration of Transfer and Exchange.

         The Company shall cause to be kept in the office or agency of the
Company in the Borough of Manhattan, the City of New York required by Section
1002 a register (the register maintained in such office and in any other office
or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. is hereby appointed
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided. The Company may at any time replace such Security
Registrar, change such office or agency or act as its own Security Registrar.
The Company

                                       20
<PAGE>

will give prompt written notice to the Trustee of any change of the Security
Registrar or of the location of such office or agency.

         Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series and tenor, of any authorized denominations and of a like
aggregate principal amount.

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

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

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

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

         The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at, the
opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.

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

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

                                       21
<PAGE>

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

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

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

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

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

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

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

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

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

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

         If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security (with an endorsement of the Guarantee executed by the
Guarantor) of the same series and of like tenor and principal amount and bearing
a number not contemporaneously outstanding.

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

                                       22
<PAGE>

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

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

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

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

Section 307. Payment of Interest; Interest Rights Preserved.

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

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

         (1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon, the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities of such series
at his address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).

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

                                       23
<PAGE>

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

Section 308. Persons Deemed Owners.

         Prior to due presentment of a Security for registration of transfer,
the Company, the Guarantor, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Security is registered as the
owner of such Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Sections 305 and 307) any interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Guarantor, the Trustee nor any agent of
the Company, the Guarantor or the Trustee shall be affected by notice to the
contrary.

Section 309. Cancellation.

         All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company or the Guarantor may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company or the Guarantor has not issued and
sold, and all Securities so delivered shall be promptly canceled by the Trustee.
No Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section, except as expressly permitted
by this Indenture. All canceled Securities held by the Trustee shall be disposed
of in accordance with its customary practices.

Section 310. Computation of Interest.

         Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year of twelve 30-day months.

Section 311. CUSIP Numbers.

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

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture.

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

         (1) either

                  (A) all Securities theretofore authenticated and delivered
         (other than (i) Securities which have been destroyed, lost or stolen
         and which have been replaced or paid as provided in Section 306 and
         (ii)

                                       24
<PAGE>

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

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

                      (i) have become due and payable, or

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

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

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

         (2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and

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

         Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to Subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402, 606 and 1002 and
the last paragraph of Section 1003 shall survive.

Section 402. Application of Trust Money.

         Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.

                                   ARTICLE V

                                    REMEDIES

Section 501. Events of Default.

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

         (1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for a
period of 60 days; or

                                       25
<PAGE>

         (2) default in the payment of the principal of (or premium, if any, on)
any Security of that series at its Maturity; or

         (3) default in the payment of any sinking fund payments, when and as
due by the terms of a Security of that series, and continuance of such default
for a period of 60 days; or

         (4) default in the performance, or breach, of any covenant or warranty
of the Company or the Guarantor in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in this
Section specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that
series), and continuance of such default or breach for a period of 90 days after
there has been given, by registered or certified mail, to the Company and the
Guarantor by the Trustee or to the Company, the Guarantor and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Securities of
that series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or

         (5) default by the Company or the Guarantor in the payment of any
principal of any Funded Debt of the Company or the Guarantor outstanding in an
aggregate principal amount in excess of $50,000,000 as and when the same shall
become due and payable either at maturity, upon redemption, by declaration or
otherwise, the effect of which default is to cause such Funded Debt to become,
or to be declared, due prior to its stated maturity unless such default shall be
cured, by payment or otherwise, within 30 days after the receipt by the Company
and the Guarantor of written notice of such default from the Trustee or from the
Holders of at least 5% in principal amount of the Outstanding Securities of that
series; or

         (6) the Guarantee in respect of Securities of that series ceases to be
in full force and effect or becomes unenforceable or invalid or is declared null
and void (other than in accordance with the terms of such Guarantee) or the
Guarantor denies or disaffirms its obligations under such Guarantee; or

         (7) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or the Guarantor in an
involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company or the Guarantor a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or the Guarantor under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or the Guarantor or of any substantial part of the property of the
Company or the Guarantor, or ordering the winding up or liquidation of the
Company or the Guarantor, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
90 consecutive days; or

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

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

                                       26
<PAGE>

Section 502. Acceleration of Maturity; Rescission and Annulment.

         If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
of the Securities of that series to be due and payable immediately, by a notice
in writing to the Company and the Guarantor (and to the Trustee if given by
Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable. Notwithstanding the foregoing,
if an Event of Default specified in clause (7) or (8) of Section 501 occurs, the
Securities of any series at the time Outstanding shall be due and payable
immediately without further action or notice.

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

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

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

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

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

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

                  and

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

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

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

         The Company covenants that if

         (1) default is made in the payment of any installment of interest on
any Security or any deposit of any sinking fund payment when such becomes due
and payable and such default continues for a period of 60 days, or

         (2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition thereto, such

                                       27
<PAGE>

further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

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

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

Section 504. Trustee May File Proofs of Claim.

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

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

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

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

         Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.

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

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

                                       28
<PAGE>

Section 506. Application of Money Collected.

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

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

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

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

Section 507. Limitation on Suits.

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

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

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

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

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

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

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

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

         Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Sections 305 and 307) interest on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.

                                       29
<PAGE>

Section 509. Restoration of Rights and Remedies.

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

Section 510. Rights and Remedies Cumulative.

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

Section 511. Delay or Omission Not Waiver.

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

Section 512. Control by Holders.

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

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

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

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

Section 513. Waiver of Past Defaults.

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

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

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

                                       30
<PAGE>

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

Section 514. Undertaking for Costs.

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

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

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

                                   ARTICLE VI

                                   THE TRUSTEE

Section 601. Certain Duties and Responsibilities.

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

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

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

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

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

                                       31
<PAGE>

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

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

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

         (4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

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

Section 602. Notice of Defaults.

         Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series, as their names and addresses appear in
the Security Register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Security of such series or in the payment of any
sinking fund installment with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as a trust
committee of Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders of Securities
of such series; and provided, further, that in the case of any default of the
character specified in Section 501(4) with respect to Securities of such series,
no such notice to Holders shall be given until at least 60 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.

Section 603. Certain Rights of Trustee.

         Subject to the provisions of Section 601:

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

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

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

                                       32
<PAGE>

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

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

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

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

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

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

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

         The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. The Trustee
or any Authenticating Agent shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.

Section 605. May Hold Securities.

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

Section 606. Money Held in Trust.

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

Section 607. Compensation and Reimbursement.

         The Company and the Guarantor jointly and severally agree:

                                       33
<PAGE>

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

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

         (3) to indemnify each of the Trustee or any predecessor Trustee and its
officers, directors, agents and employees for, and to hold it harmless against,
any and all loss, liability or expense, including taxes (other than taxes based
upon, measured by or determined by the earnings or income of the Trustee)
incurred without negligence or willful misconduct on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim (whether asserted by the Company, the Guarantor, or any Holder or any
other Person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder.

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

         When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 501(7) or Section 501(8), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services of the Trustee are intended to constitute expenses
of administration under any applicable Federal or state bankruptcy, insolvency
or other similar law.

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

Section 608. Disqualification; Conflicting Interests.

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

Section 609. Corporate Trustee Required; Eligibility.

         There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by Federal or
State authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. The
Trustee shall not be an obligor upon the Securities or an Affiliate thereof. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article Six.

Section 610. Resignation and Removal; Appointment of Successor.

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

                                       34
<PAGE>

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

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

         (d) If at any time:

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

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

         (3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (i) the Company by a Board Resolution of
the Company may remove the Trustee with respect to all Securities, or (ii)
subject to Section 514, any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.

         (e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company and the Guarantor,
by Board Resolutions of the Company and the Guarantor, shall promptly appoint a
successor Trustee or Trustees with respect to the Securities of that or those
series (it being understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of Section
611. If an instrument of acceptance by a successor Trustee shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
removal, the Trustee being removed may petition, at the expense of the Company
and the Guarantor, any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company, the Guarantor,
and the retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Company and the Guarantor. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company and
the Guarantor or the Holders and accepted appointment in the manner required by
Section 611, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.

         (f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.

                                       35
<PAGE>

Section 611. Acceptance of Appointment by Successor.

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

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

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

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

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

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

Section 613. Preferential Collection of Claims Against Company.

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

                                       36
<PAGE>

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

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

Section 614. Appointment of Authenticating Agent.

         At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and the Guarantor and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

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

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

         The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 614.

                                       37
<PAGE>

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

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

                                       The Bank of New York,

                                       As Trustee

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

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

                                  ARTICLE VII

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701. Company to Furnish Trustee Names and Addresses of Holders.

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

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

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

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

Section 702. Preservation of Information; Communications to Holders.

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

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

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

                  (ii) inform such applicants as to the approximate number of
         Holders whose names and addresses appear in the information preserved
         at the time by the Trustee in accordance with

                                       38
<PAGE>

         Section 702(a), and as to the approximate cost of mailing to such
         Holders the form of proxy or other communication, if any, specified in
         such application.

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

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

Section 703. Reports by Trustee.

         Any Trustee's report required pursuant to Section 313(a) of the Trust
Indenture Act shall be dated as of August 1, and shall be transmitted within 60
days after August 1 of each year, commencing with the year 2003, by mail to all
Holders, as their names and addresses appear in the Security Register. A copy of
each such report shall, at the time of such transmission to Holders, be filed by
the Trustee with each stock exchange upon which any Securities are listed, with
the Commission and with the Company. The Company will notify the Trustee when
any Securities are listed on any stock exchange.

Section 704. Reports by Company.

         The Guarantor shall file with the Trustee, within 15 days after the
Guarantor is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports which the Guarantor
may be required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended, or pursuant to Section
314 of the Trust Indenture Act. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's and the Guarantor's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates of the Company and the Guarantor).

                                  ARTICLE VIII

                         CONSOLIDATION, MERGER AND SALE

Section 801. Company and Guarantor May Consolidate, Etc., Only on Certain Terms.

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

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<PAGE>

         (1) (A) in the case of a merger, the Company is the surviving entity,
or (B) the Person formed by such consolidation or amalgamation or into which the
Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust, shall be organized and
existing under the laws of the United States of America, any State thereof, the
District of Columbia, Canada or any Province thereof, and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment of
the principal of and interest on all the Securities and the performance of every
covenant of this Indenture on the part of the Company to be performed or
observed and shall have expressly provided for conversion rights in respect of
any series of Outstanding Securities with conversion rights;

         (2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing; and

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

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

         (1) (A) in the case of a merger, the Guarantor is the surviving entity,
or (B) the Person formed by such consolidation or into which the Guarantor is
merged or the Person which acquires by conveyance or transfer, or which leases,
the properties and assets of the Guarantor substantially as an entirety shall be
a corporation, partnership or trust, shall be organized and existing under the
laws of the United States of America, any state thereof, or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of and interest on all the Securities
and the performance of every covenant of this Indenture on the part of the
Guarantor to be performed or observed;

         (2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing; and

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

Section 802. Successor Substituted.

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

Section 803. Assignment of  Company's Obligations.

         The Company may assign its obligations under the Securities and this
Indenture to any other wholly owned Subsidiary of the Guarantor at any time
without the consent of the Trustee or any Holder, provided that the assignee
agrees to be bound by the terms of this Indenture and the Securities, and the
Guarantees remain in full force and effect. Upon any such assignment by the
Company, the Person to whom such assignment is made shall succeed to,

                                       40
<PAGE>

and be substituted for, and may exercise every right and power of, the Company
under this Indenture and the Securities, with the same effect as if such Person
had been named as the Company herein and therein, and thereafter, the assignor
Person shall be relieved of all obligations and covenants under this Indenture
and the Securities. A copy of the agreement evidencing such assignment shall be
provided to the Trustee by the Company, promptly after the effective date of
such assignment.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures Without Consent of Holders.

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

         (1) to evidence the succession of another corporation to the Company or
the Guarantor and the assumption by any such successor of the covenants of the
Company or the Guarantor (as the case may be) herein and in the Securities and
in the Guarantees; or

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

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

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

         (5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or

         (6) to secure the Securities of any series pursuant to the requirements
of Section 1005 or otherwise; or

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

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

         (9) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under

                                       41
<PAGE>

this Indenture which shall not adversely affect the interests of the Holders of
Securities of any series in any material respect; or

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

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

Section 902. Supplemental Indentures with Consent of Holders.

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

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

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

          (3) modify any of the provisions of this Section 902, Section 513 or
Section 1007, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby, provided,
however, that this Clause (3) shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section, or the deletion of this proviso, in
accordance with the requirements of Sections 611 (b) and 901(8).

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

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

                                       42
<PAGE>

Section 903. Execution of Supplemental Indentures.

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

Section 904. Effect of Supplemental Indentures.

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

Section 905. Conformity with Trust Indenture Act.

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

Section 906. Reference in Securities to Supplemental Indentures.

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

                                   ARTICLE X

                                    COVENANTS

Section 1001. Payment of Principal, Premium and Interest.

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

Section 1002. Maintenance of Office or Agency.

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

         The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series 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 Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any

                                       43
<PAGE>

series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.

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

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

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

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

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

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

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

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

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

         Subject to any applicable escheat or abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on
any Security of any series and remaining unclaimed for one year after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company or the Guarantor on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company and
the Guarantor for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to

                                       44
<PAGE>

make any such repayment, may at the expense of the Company cause to be published
once, in a newspaper published in the English language, customarily published on
each Business Day and of general circulation in the Borough of Manhattan, The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company and the Guarantor.

Section 1004. Corporate Existence

         Subject to Article Eight, the Company and the Guarantor will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights (charter and statutory) and franchises;
provided, however, that neither the Company nor the Guarantor shall be required
to preserve any such right or franchise if the Board of Directors of the
Guarantor shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company or the Guarantor and that the loss
thereof is not disadvantageous in any material respect to the Holders.

Section 1005. Limitation on Liens.

         The Guarantor will not itself, and will not permit any Restricted
Subsidiary to, incur, issue, assume or guarantee any indebtedness for money
borrowed (all such indebtedness for money borrowed being hereinafter in this
Article called "Debt"), secured by a Mortgage on any Principal Property or on
any shares of stock or Indebtedness of any Restricted Subsidiary, without
effectively providing that the Securities of any series (together with, if the
Guarantor shall so determine, any other indebtedness of the Guarantor or such
Restricted Subsidiary which is not subordinate in right of payment to the prior
payment in full of the Securities of any series) shall be secured equally and
ratably with (or prior to) such secured Debt, so long as such secured Debt shall
be so secured, unless, after giving effect thereto, the aggregate amount of all
Debt so secured would not exceed 10% of Consolidated Net Tangible Assets as of a
date within 150 days prior to such determination; provided, however, that this
Section shall not apply to, and there shall be excluded from secured Debt in any
computation under this Section, Debt secured by:

         (1) Mortgages existing at the date of this Indenture;

         (2) Mortgages on property of, or on any shares of stock or Indebtedness
of, any corporation existing at the time such corporation becomes a Restricted
Subsidiary;

         (3) Mortgages in favor of the Guarantor or any Restricted Subsidiary;

         (4) Mortgages on property, shares of stock or Indebtedness existing at
the time of acquisition thereof (including acquisition through merger,
consolidation or other reorganization) or to secure the payment of all or any
part of the purchase price thereof or construction thereon or to secure any Debt
incurred prior to, at the time of, or within 180 days after the later of the
acquisition, the completion of construction or the commencement of full
operation of such property or within 180 days after the acquisition of such
shares or Indebtedness for the purpose of financing all or any part of the
purchase price thereof or construction thereon, it being understood that if a
commitment for such financing is obtained prior to or within such 180-day
period, the applicable Mortgage shall be deemed to be included in this Clause
(4) whether or not such Mortgage is created within such 180-day period;

         (5) Mortgages on property owned or leased by the Guarantor or a
Restricted Subsidiary in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political subdivision
of the United States of America or any State thereof, or in favor of any other
country or any political subdivision thereof, or in favor of holders of
securities issued by any such entity, pursuant to any contract or statute
(including without limitation, mortgages or easements on property of the
Guarantor or any Restricted Subsidiary related to the financing of such property
pursuant to Section 103 of the Internal Revenue Code of 1954, as amended or any
successor section thereto);

         (6) Mortgages to secure partial, progress, advance or other payments or
any Debt incurred for the purpose of financing all or any part of the purchase
price or cost of construction, development or repair, alteration or improvement
of the property subject to such Mortgage if the commitment for the financing is
obtained not later than

                                       45
<PAGE>

one year after the latter of the completion of or the placing into operation
(exclusive of test and start-up periods) of such constructed, developed,
repaired, altered or improved property;

         (7) Mortgages on oil, gas, coal or other minerals in place or on
geothermal resources in place, or on related leasehold or other property
interests, which are incurred to finance development, production or acquisition
costs (including but not limited to Mortgages securing advance sale
obligations);

         (8) Mortgages on equipment used or usable for drilling, servicing or
operation of oil, gas, coal or other mineral properties or of geothermal
properties;

         (9) Mortgages arising in connection with contracts or subcontracts
with, or made at the request of, the United States of America, any State thereof
or any department, agency or instrumentality of the United States or any State
thereof; and

         (10) any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any Mortgage referred to in
the foregoing Clauses (1) to (9) of this Section 1005, inclusive; provided,
however, that such extension, renewal or replacement Mortgage shall be limited
to all or a part of the same property, shares of stock or Restricted Subsidiary
Indebtedness that secured the Mortgage extended, renewed or replaced (plus
improvements on such property).

         The following transactions shall not be deemed to create Debt secured
by a Mortgage:

                  (i) the sale or other transfer of oil, gas, coal or other
         minerals in place for a period of time until, or in an amount such
         that, the transferee will realize therefrom a specified amount of money
         (however determined) or a specified amount of oil, gas, coal or other
         minerals, or the sale or other transfer of any other interest in
         property of the character commonly referred to as an oil, gas, coal or
         other mineral payment or a production payment; and

                  (ii) the sale or other transfer by the Guarantor or a
         Restricted Subsidiary of properties to a partnership, joint venture or
         other entity whereby the Guarantor or such Restricted Subsidiary would
         retain partial ownership of such properties.

Section 1006. Statement by Officers as to Default.

         Annually, within 120 days after the close of each fiscal year beginning
with the fiscal year ending December 31, 2001, the Company and the Guarantor
will each deliver to the Trustee a brief certificate (which need not include the
statements set forth in Section 102) from the principal executive officer,
principal financial officer or principal accounting officer of the Company or
the Guarantor (as the case may be) as to his or her knowledge of the Company's
or the Guarantor's (as the case may be) compliance (without regard to any period
of grace or requirement of notice provided herein) with all conditions and
covenants under the Indenture.

Section 1007. Waiver of Certain Covenants.

         The Company and the Guarantor may omit in any particular instance to
comply with any term, provision or condition set forth in Section 1004 or 1005
with respect to the Securities of any series if before the time for such
compliance the Holders of at least a majority in aggregate principal amount of
the Outstanding Securities of all affected series (voting as one class) shall,
by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the Guarantor and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.

         A waiver which changes or eliminates any term, provision or condition
of this Indenture which has expressly been included solely for the benefit of
one or more particular series of Securities, or which modifies the

                                       46
<PAGE>

rights of the Holders of Securities of such series with respect to such term,
provision or condition, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

Section 1101. Applicability of Article.

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

Section 1102. Election to Redeem; Notice to Trustee.

         The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution of the Company. In case of any redemption at the election
of the Company of less than all the Securities of any series, the Company shall,
at least five Business Days prior to the last date for the giving of notice of
such redemption (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date and of the principal amount of
Securities of such series to be redeemed. In the case of any redemption of
Securities (1) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture or (2)
pursuant to an election of the Company that is subject to a condition specified
in the terms of the Securities of the series to be redeemed, the Company shall
furnish the Trustee with an Officers' Certificate of the Company evidencing
compliance with such restriction or condition.

Section 1103. Selection by Trustee of Securities to Be Redeemed.

         If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 40 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.

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

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

Section 1104. Notice of Redemption.

         Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 15 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.

         All notices of redemption shall identify the Securities to be redeemed
(including the CUSIP numbers) and shall state:

                                       47
<PAGE>

         (1) the Redemption Date,

         (2) the Redemption Price,

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

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

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

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

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

Section 1105. Deposit of Redemption Price.

         Prior to 10:00 A.M. New York time on any Redemption Date, the Company
shall deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.

Section 1106. Securities Payable on Redemption Date.

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

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

Section 1107. Securities Redeemed in Part.

         Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and tenor, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

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<PAGE>

                                   ARTICLE XII

                                  SINKING FUNDS

Section 1201. Applicability of Article.

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

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

Section 1202. Satisfaction of Sinking Fund Payments with Securities.

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

Section 1203. Redemption of Securities for Sinking Fund.

         Not less than 45 days prior to each sinking fund payment date for any
series of Securities (unless a shorter period shall be satisfactory to the
Trustee), the Company will deliver to the Trustee an Officers' Certificate of
the Company specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.

                                  ARTICLE XIII

                                   DEFEASANCE

Section 1301. Applicability of Article.

         The provisions of this Article shall be applicable to each series of
Securities (and the related Guarantees) except as otherwise specified as
contemplated by Section 301 for Securities of such series.

Section 1302. Legal Defeasance.
\
         In addition to discharge of the Indenture pursuant to Section 401, the
Company shall be deemed to have paid and discharged the entire indebtedness on
all the Securities of such a series (and the Guarantor shall be deemed to have
satisfied its obligations under the Guarantees with respect to the Securities of
such series) on the 91st day after the date of the deposit referred to in Clause
(1) below (and the Trustee, at the expense of the Company, shall upon a Company
Request execute proper instruments acknowledging same), and the provisions of
this Indenture with respect to the Securities of such series (and the related
Guarantees) shall no longer be in effect, except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of

                                       49
<PAGE>

Outstanding Securities of such series to receive, solely from the trust fund
described in Section 1304 and as more fully set forth in such Section, payments
in respect of the principal of (and premium, if any) and interest on such
Securities when such payments are due, (B) the Company's obligations with
respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (C) the
rights, powers, trusts, duties, and immunities of the Trustee hereunder and (D)
this Article Thirteen, if the conditions set forth below are satisfied
(hereinafter, "defeasance"):

         (1) The Company has irrevocably deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section 609
who shall agree to comply with the provisions of this Article Thirteen
applicable to it) as trust funds in trust for the purposes of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Securities of such series (i) cash in an
amount, or (ii) in the case of any series of Securities the payments on which
may only be made in legal coin or currency of the United States, U.S. Government
Obligations which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, cash in an amount, or (iii) a
combination thereof, sufficient, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge (A) the principal of (and
premium, if any, on) and interest on and each installment of principal of (and
premium, if any, on) and interest on the Outstanding Securities of such series
on the Stated Maturity of such principal or installment of principal or
interest, as the case may be, or on any Redemption Date established pursuant to
Clause (3) below, and (B) any mandatory sinking fund or analogous payments on
the dates on which such payments are due and payable in accordance with the
terms of the Indenture and the Securities of such series. For this purpose,
"U.S. Government Obligations" means securities that are (x) direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged or (y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America, which,
in either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as
custodian with respect to any such U.S. Government Obligation or a specific
payment of principal of or interest on any such U.S. Government Obligation held
by such custodian for the account of the holder of such depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.

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

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

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

         (5) Such defeasance shall not cause the Trustee for the Securities of
such series to have a conflicting interest as defined in Section 310(b) of the
Trust Indenture Act.

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

         (7) Such defeasance shall not cause any Securities of such series then
listed on any registered national securities exchange under the Securities
Exchange Act of 1934, as amended, to be delisted.

                                       50
<PAGE>

         (8) Such defeasance shall be effected in compliance with any additional
terms, conditions or limitations which may be imposed on the Company in
connection therewith pursuant to Section 301.

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

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

         Notwithstanding the foregoing, if an Event of Default specified in
Subsection 501(5) or 501(7), or an event which with lapse of time would become
such an Event of Default, shall occur during the period ending on the 91st day
after the date of the deposit referred to in Clause (1) or, if longer, ending on
the day following the expiration of the longest preference period applicable to
the Company in respect of such deposit, then, effective upon such occurrence,
the defeasance pursuant to this Section 1302 and such deposit shall be rescinded
and annulled, and the Company, the Guarantor, the Trustee and the Holders of the
Securities of such series shall be restored to their former positions.

Section 1303. Covenant Defeasance.

         The Company, the Guarantor and any other obligor, if any, shall be
released on the 91st day after the date of the deposit referred to in Clause (1)
below from its obligations under Sections 704, 801, 1004 and 1005 with respect
to the Securities of any series (and the related Guarantees) on and after the
date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the Securities of such series (and the related Guarantees)
shall thereafter be deemed to be not "Outstanding" for the purposes of any
request, demand, authorization, direction, notice, waiver, consent or
declaration or other action or Act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
Outstanding for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Securities of such series (and the
related Guarantees), the Company and the Guarantor may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such Section, whether directly or indirectly by reason of any
reference elsewhere herein to such Section or by reason of any reference in such
Section to any other provision herein or in any other document and such omission
to comply shall not constitute a Default or an Event of Default under Section
501, but, except as specified above, the remainder of this Indenture and the
Securities of such series shall be unaffected thereby. The following shall be
the conditions to application of this Section 1303;

         (1) The Company has irrevocably deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section 609
who shall agree to comply with the provisions of this Article Thirteen
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Securities of such series (i) cash in an
amount, or (ii) in the case of any series of Securities the payments on which
may only be made in legal coin or currency of the United States, U.S. Government
Obligations which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, cash in an amount, or (iii) a
combination thereof, sufficient, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge (A) the principal of (and
premium, if any, on) and interest on and each installment of principal of (and
premium, if any, on) and interest on the Outstanding Securities of such series
on the Stated Maturity of such principal or installment of principal or
interest, as the case may be, or on any Redemption Date established pursuant to
Clause (2) below, and (B) any mandatory sinking fund payments on the date on
which such payments are due and payable in accordance with the terms of the
Indenture and the Securities of such series.

                                       51
<PAGE>

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

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

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

         (5) Such defeasance shall not cause the Trustee for the Securities of
such series to have a conflicting interest as defined in Section 310(b) of the
Trust Indenture Act.

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

         (7) Such defeasance shall not cause any Securities of such series then
listed on any registered national securities exchange under the Securities
Exchange Act of 1934, as amended, to be delisted.

         (8) Such defeasance shall be effected in compliance with any additional
terms, conditions or limitations which may be imposed on the Company in
connection therewith pursuant to Section 301.

         (9) The Company shall have delivered to the Trustee an Officer's
Certificate stating that all conditions precedent provided for relating to the
covenant defeasance contemplated by this provision have been complied with.

         Notwithstanding the foregoing, if an Event of Default specified in
Subsection 501(5) or 501(7), or an event which with lapse of time would become
such an Event of Default, shall occur during the period ending on the 91st day
after the date of the deposit referred to in Clause (1) or, if longer, ending on
the day following the expiration of the longest preference period applicable to
the Company in respect of such deposit, then, effective upon such occurrence,
the defeasance pursuant to this Section 1303 and such deposit shall be rescinded
and annulled, and the Company, the Guarantor, the Trustee and the Holders of the
Securities of such series shall be restored to their former positions.

Section 1304. Deposited Money and U.S. Government Obligations to be Held in
              Trust.

         Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee -- collectively, for purposes of
this Section 1304, the "Trustee") pursuant to Section 1302 or 1303 in respect of
the Outstanding Securities of such series shall be held in trust and applied by
the Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
(and premium, if any) and interest, but such money need not be segregated from
other funds except to the extent required by law.

         The Company and the Guarantor shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 1302 or 1303 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
Outstanding Securities of such series.

                                       52
<PAGE>

Section 1305. Repayment to Company or the Guarantor.

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

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

                                  ARTICLE XIV

                            GUARANTEES OF SECURITIES

Section 1401. Unconditional Guarantees.

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

         (b) Failing payment when due of any amount guaranteed pursuant to the
Guarantees, for whatever reason, the Guarantor will be obligated to pay the same
immediately to the Trustee, without set-off or counterclaim or other reduction
whatsoever (whether for taxes, withholding or otherwise). Each Guarantee
hereunder is intended to be a general, unsecured, senior obligation of the
Guarantor and will rank pari passu in right of payment with all Indebtedness of
the Guarantor that is not, by its terms, expressly subordinated in right of
payment to the Guarantee of the Guarantor. The Guarantor hereby agrees that its
obligations hereunder shall be full, irrevocable, unconditional and absolute,
irrespective of the validity, regularity or enforceability of the Securities,
the Guarantees or this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of the Guarantor. The Guarantor hereby agrees
that in the event of a default in payment of the principal of, or premium, if
any, or interest on the Securities of any series or any other amounts payable
under this Indenture and the Securities by the Company, whether at the Stated
Maturity, upon redemption or by declaration of acceleration or otherwise, legal
proceedings may be instituted by the Trustee on behalf of the Holders or,
subject to Section 5.07 hereof, by the Holders, on the terms and conditions set
forth in this Indenture, directly against the Guarantor to enforce the
Guarantees without first proceeding against the Company.

         (c) To the fullest extent permitted by applicable law, the obligations
of the Guarantor under this Article XIV shall be as aforesaid full, irrevocable,
unconditional and absolute and shall not be impaired, modified, discharged,
released or limited by any occurrence or condition whatsoever, including,
without limitation, (i) any compromise, settlement, release, waiver, renewal,
extension, indulgence or modification of, or any change in, any of the
obligations and liabilities of the Company or the Guarantor contained in any of
the Securities or this Indenture, (ii) any impairment, modification, release or
limitation of the liability of the Company, the Guarantor or any of their
estates in bankruptcy, or any remedy for the enforcement thereof, resulting from
the operation of any present or future provision of any applicable Bankruptcy
Law, as amended, or other statute or from the decision of any court,

                                       53
<PAGE>

(iii) the assertion or exercise by the Company, the Guarantor or the Trustee of
any rights or remedies under any of the Securities or this Indenture or their
delay in or failure to assert or exercise any such rights or remedies, (iv) the
assignment or the purported assignment of any property as security for any of
the Securities, including all or any part of the rights of the Company or the
Guarantor under this Indenture, (v) the extension of the time for payment by the
Company or the Guarantor of any payments or other sums or any part thereof owing
or payable under any of the terms and provisions of any of the Securities or
this Indenture or of the time for performance by the Company or the Guarantor of
any other obligations under or arising out of any such terms and provisions or
the extension or the renewal of any thereof, (vi) the modification or amendment
(whether material or otherwise) of any duty, agreement or obligation of the
Company or the Guarantor set forth in this Indenture, (vii) the voluntary or
involuntary liquidation, dissolution, sale or other disposition of all or
substantially all of the assets, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other similar
proceeding affecting, the Company or the Guarantor or any of their respective
assets, or the disaffirmance of any of the Securities, the Guarantees or this
Indenture in any such proceeding, (viii) the release or discharge of the Company
or the Guarantor from the performance or observance of any agreement, covenant,
term or condition contained in any of such instruments by operation of law, (ix)
the unenforceability of any of the Securities, the Guarantees or this Indenture,
(x) any change in the name, business, capital structure, corporate existence, or
ownership of the Company or the Guarantor, or (xi) any other circumstance which
might otherwise constitute a defense available to, or a legal or equitable
discharge of, a surety or the Guarantor.

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

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

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

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

Section 1402. Execution and Delivery of Notation of Guarantees.

         To further evidence the Guarantees, the Guarantor hereby agrees that a
notation of such Guarantees shall be endorsed on each Security authenticated and
delivered by the Trustee and executed by either manual or facsimile signature of
an Officer of the Guarantor.

                                       54
<PAGE>

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

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

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

                                       55

<PAGE>

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

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

                                        COMPANY:

                                        ANADARKO FINANCE COMPANY

                                        By:
                                           -------------------------------------

                                        Name:
                                            ------------------------------------

                                        Title:
                                             -----------------------------------

                                        GUARANTOR:

                                        ANADARKO PETROLEUM
                                        CORPORATION

                                        By:
                                           -------------------------------------

                                        Name:
                                            ------------------------------------

                                        Title:
                                             -----------------------------------

                                        TRUSTEE:

                                        THE BANK OF NEW YORK

                                        By:
                                           -------------------------------------

                                        Name:
                                            ------------------------------------

                                        Title:
                                             -----------------------------------

                                       56

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