Document:

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                                                                    EXHIBIT 10.1

PAGES WHERE CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED "CONFIDENTIAL
TREATMENT REQUESTED." THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE
COMMISSION, AND THE APPROPRIATE SECTION HAS BEEN MARKED AT THE APPROPRIATE PLACE
AND THE MARGIN WITH A STAR (*).

                         SEVENTH AMENDMENT TO CONVEYANCE
                                       OF
                              GAS PROCESSING RIGHTS

                            DATED AS OF APRIL 1, 2004

                                     BETWEEN

                         ENTERPRISE GAS PROCESSING, LLC,

                               SHELL OIL COMPANY,

                     SHELL EXPLORATION & PRODUCTION COMPANY,

                              SHELL OFFSHORE, INC.,

                   SHELL CONSOLIDATED ENERGY RESOURCES, INC.,

                          SHELL LAND & ENERGY COMPANY,

                         SHELL FRONTIER OIL & GAS, INC.

                                       AND

                            SHELL GULF OF MEXICO INC.

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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                                   <C>
1.   DEFINITIONS.................................................................................................      3
2.   TERM........................................................................................................      7
      2.1     Primary and Successive Terms.......................................................................      7
      2.2     Termination of Agreement...........................................................................      7
      2.3     Survival Provision.................................................................................      7
         2.3.1   Post Termination: Continuation as to Dedicated Leases...........................................      7
         2.3.2   Post Termination: Proposals for New Volumes.....................................................      8
3.   ASSIGNMENT OF GAS PROCESSING RIGHTS.........................................................................      8
      3.1     Grant of Processing Rights.........................................................................      8
      3.2     Attachment of Gas Processing Rights................................................................      9
      3.3     Producers' Nondisturbance Covenant; Prior Reservations or Contracts................................      9
      3.4     Processor's Right to Consume PTR...................................................................      9
      3.5     Title to Raw Make, Products, Processor's Retrograde and PTR........................................     10
      3.6     Limitations on Upstream Processing.................................................................     10
         3.6.1   Producer's Operational Requirements.............................................................     10
         3.6.2   Processor's Exclusive Rights....................................................................     10
         3.6.3   NGL Banks.......................................................................................     10
4.   PROCESSOR'S OBLIGATION TO PROCESS AND REDELIVER; LIMITATIONS................................................     11
      4.1     Processor's Obligation to Process and Redeliver Residue Gas........................................     11
      4.2     Temporary Cessation of Processing..................................................................     11
      4.3     Refused Volumes....................................................................................     11
         4.3.1   Insufficient Capacity; Option to Refuse Volumes.................................................     11
         4.3.2   Option to Reacquire Refused Volumes.............................................................     12
      4.4     Excludable Gas.....................................................................................     12
         4.4.1   Option to Exclude Certain Gas...................................................................     12
         4.4.2   Option to Reacquire Excludable Gas..............................................................     13
      4.5     Suspension in Case of Dangerous Condition..........................................................     13
5.   SPECIFICATIONS FOR GAS AND SLUG LIQUIDS.....................................................................     13
      5.1     Quality Specifications.............................................................................     13
      5.2     Testing............................................................................................     13
      5.3     Off-Spec Deliveries................................................................................     14
      5.4     Notification of Non-Conformity; Rejection of Delivery..............................................     14
      5.5     Acceptance of Nonconforming Product................................................................     14
      5.6     Processor's Limited Commitment to Accept Non-Conforming Product....................................     14
      5.7     Specifications for Residue Gas Redelivered by Processor............................................     14
      5.8     Off Spec Pipeline..................................................................................     15
6.   CONSIDERATION...............................................................................................     15
      6.1     Payment............................................................................................     15
      6.2     Consideration Basis................................................................................     15
      6.3     Consideration Timing...............................................................................     15
      6.4     Consideration Basis Updates........................................................................     15
      6.5     Processor Provided PTR.............................................................................     15
      6.6     Consideration Adjustment ..........................................................................     16
</TABLE>

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<TABLE>
<S>                                                                                                                   <C>
       6.7      Consideration Reduction..........................................................................     17
7.   PTR AND PTR TRANSPORTATION..................................................................................     18
8.   ROYALTY.....................................................................................................     18
      8.1     Responsibility for Royalty Payments................................................................     18
      8.2     Delivery of Royalty Taken In Kind..................................................................     19
      8.3     Compliance with Federal Acts.......................................................................     19
9.   METERING, ANALYSIS, AND ALLOCATION..........................................................................     19
      9.1     Gas Metering, Analysis and Reports.................................................................     19
      9.2     Liquids Metering and Analysis......................................................................     20
      9.3     Meter Failure......................................................................................     20
10.  INDEMNITY...................................................................................................     20
11.  CURTAILMENT.................................................................................................     20
      11.1    Mutual Agreement Not to Curtail or Withhold........................................................     20
      11.2    Limited Right to Interrupt Performance for Maintenance, etc........................................     20
12.  FORCE MAJEURE...............................................................................................     21
      12.1    Performance Excused................................................................................     21
      12.2    Force Majeure Defined..............................................................................     21
13.  AUDIT RIGHTS................................................................................................     21
14.  NOTIFICATIONS...............................................................................................     22
      14.1    Annual Information.................................................................................     22
      14.2    Notice of Material Changes to Annual Information...................................................     22
      14.3    Notice of Proposed Transfers of Dedicated Leases...................................................     22
      14.4    Notice of Pending Transportation Agreements........................................................     22
      14.5    Notice of Scheduled Plant Downtime.................................................................     22
15.  CONFIDENTIALITY.............................................................................................     22
      15.1    General............................................................................................     22
      15.2    Annual Information.................................................................................     23
16.  DISPUTE RESOLUTION..........................................................................................     23
      16.1    Arbitration. ......................................................................................     23
      16.2    Initiation of Procedures...........................................................................     23
      16.3    Negotiation Between Executives.....................................................................     24
      16.4    Binding Arbitration................................................................................     24
17.  TRANSFER AND ASSIGNMENT.....................................................................................     24
      17.1    Successors and Assigns.............................................................................     24
      17.2    Processor's Rights Under Leases....................................................................     25
      17.3    Affiliates of Producer Parties.....................................................................     25
      17.4    Excepted Leases....................................................................................     25
18.  MISCELLANEOUS...............................................................................................     25
      18.1    Title and Captions.................................................................................     25
      18.2    Pronouns and Plurals...............................................................................     25
      18.3    Separability.......................................................................................     25
      18.4    Successors.........................................................................................     26
      18.5    Further Actions....................................................................................     26
      18.6    Notices............................................................................................     26
      18.7    Amendment only in Writing..........................................................................     26
</TABLE>

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<TABLE>
<S>                                                                                                                   <C>
      18.8    Right of Ingress and Egress........................................................................     26
      18.9    No Special Damages.................................................................................     26
      18.10   Applicable Law.....................................................................................     27
      18.11   Entire Agreement...................................................................................     27
      18.12   Counterparts.......................................................................................     27
</TABLE>

EXHIBIT A         Dedicated Leases as of August 1, 1999
EXHIBIT B         Excluded Leases
EXHIBIT C         Consideration Bases
EXHIBIT D         Upstream Pipelines
EXHIBIT E         Letter of Attornment

                                      iii

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                         SEVENTH AMENDMENT TO CONVEYANCE
                            OF GAS PROCESSING RIGHTS

         THIS SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS (this
"AGREEMENT") dated as of April 1, 2004 ("EFFECTIVE DATE") is made by and between
Enterprise Gas Processing, LLC ("PROCESSOR"), a Delaware limited liability
company, on the one hand, and Shell Oil Company ("SOC"), Shell Exploration &
Production Company ("SEPCO"), Shell Offshore Inc., individually and as successor
in interest by merger to Shell Deepwater Development Inc. and Shell Deepwater
Production Inc. ("SOI"), Shell Consolidated Energy Resources Inc. ("SCERI"),
Shell Land & Energy Company ("SLEC"), Shell Frontier Oil & Gas Inc. ("SFOGI"),
and Shell Gulf of Mexico Inc. ("SGOM"), all Delaware corporations, on the other,
the latter seven parties and their respective Affiliates (as defined below),
successors and assigns being collectively referred to as "PRODUCER" or
"PRODUCERS". Producers and Processor are sometimes referred to as a "PARTY" or
collectively as the "PARTIES".

                                    RECITALS

         A.       Effective January 1, 1982, SOI and SOC executed that certain
Conveyance of Gas Processing Rights (the "ORIGINAL CONVEYANCE"), which granted
to SOC the right to process SOI's gas sold pursuant to certain identified gas
sale contracts.

         B.       Effective January 1, 1984, SOC assigned its rights under the
Original Conveyance to Shell Western E&P Inc. ("SWEPI").

         C.       Effective January 1, 1992, the Original Conveyance was amended
(the "FIRST AMENDMENT") to provide for a different method of calculating the
annual compensation to be paid to SOI by SWEPI and to provide that a list of
mineral leases, rather than gas sales contracts, to which the Original
Conveyance applied, would be updated annually.

         D.       Effective January 1, 1997, the First Amendment was amended
(the "SECOND AMENDMENT") solely with respect to certain mineral leases, the
production from which was dedicated for Processing at the Venice Plant of Venice
Energy Services Company, L.L.C., to confirm SWEPI's ownership of the Gas
Processing Rights for those mineral leases.

         E.       Effective January 1, 1998, the Second Amendment was amended in
its entirety (the "THIRD AMENDMENT") to (1) recognize and confirm SWEPI's
ownership of the Producers' Gas Processing Rights associated with the Equity Gas
attributable to the leases listed on Exhibit "A" to such Third Amendment,
including the right to Process Equity Gas, and receive the benefits therefrom,
with respect to such leases; (2) confirm that the transfer of such rights to
SWEPI was and is binding on Producers as SOI's successors and assigns, and their
respective Affiliates, notwithstanding non-compliance by Producer or SWEPI with
respect to any provision concerning annual notification requirements of the
First Amendment; (3) provide that SWEPI shall be conveyed without further act,
the Gas Processing Rights for Equity Gas from any Lease upon the earlier of that
point in time (x) when Gas production from such Lease is committed to be
transported in an Upstream Pipeline, (y) when such Lease (or unitized portion
thereof) begins

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Gas production to an Upstream Pipeline, or (z) when SWEPI requires a written
dedication of Gas Processing Rights for a Lease in connection with SWEPI's
efforts to provide Processing capacity for Gas production from such Lease,
regardless of whether Exhibit A is thereafter amended to include Leases; and (4)
to make such other changes to the Conveyance as specified in the Third
Amendment.

         F.       Effective January 12, 1998, SWEPI assigned to Tejas Holdings,
LLC all of its rights under the Third Amendment and Tejas Holdings, LLC
subsequently assigned all of such rights to Tejas Natural Gas Liquids, LLC.

         G.       Effective August 1, 1999, the Third Amendment was amended and,
as so amended, restated in its entirety (the "FOURTH AMENDMENT") to clarify the
respective rights and obligations of the Processor and Producers thereunder.

         H.       Effective September 30, 1999, Tejas Natural Gas Liquids LLC
changed its name to Enterprise Natural Gas Liquids, LLC.

         I.       Effective October 31, 1999, Enterprise Natural Gas Liquids,
LLC merged with and into Enterprise Products Operating L.P., with Enterprise
Products Operating L.P. being the surviving entity of such merger.

         J.       Effective March 31, 2001, Enterprise Products Operating L.P.
assigned all of its rights under the Fourth Amendment to its wholly-owned
subsidiary, Enterprise Gas Processing, LLC, which assignment was in all respects
approved and consented to by Producers.

         K.       Effective April 1, 2001, the Fourth Amendment was amended and,
as so amended, restated in its entirety (the "FIFTH AMENDMENT") to incorporate
certain changes in the respective rights and obligations of the Processor and
Producers thereunder.

         L.       Effective September 18, 2002, SGOM ratified and joined in the
Fifth Amendment as a Producer Party.

         M.       Effective March 1, 2003, the Fifth Amendment was amended and,
as so amended, restated in its entirety (the "SIXTH AMENDMENT") to incorporate
certain changes in the respective rights and obligations of the Processor and
Producers thereunder.

         L.       The Parties desire to further amend the Sixth Amendment to
incorporate further changes in their respective rights and obligations
thereunder and to restate the Conveyance in its entirety.

         NOW THEREFORE, in consideration of the mutual agreements, covenants and
conditions herein contained, the Parties hereby amend and restate the Conveyance
to read in its entirety as follows:

                                       2

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1.       DEFINITIONS.

         1.1      "AFFILIATE" means, with respect to any relevant Person, any
other Person that directly or indirectly controls, is controlled by, or is under
common control with, such relevant Person in question. As used herein, the term
"control" (including its derivatives and similar terms) means owning, directly
or indirectly, the power (1) to vote ten percent or more of the voting stock of
any such relevant Person and (2) to direct or cause the direction of the
management and policies of any such relevant Person.

         1.2.     "ANNUAL INFORMATION" has the meaning given it in Section 14.1.

         1.3.     "BTU" or "BRITISH THERMAL UNIT" means the quantity of heat
required to raise the temperature of one pound of pure water from 58.5 degrees
to 59.5 degrees on the Fahrenheit temperature scale at a constant pressure of
14.73 psia. The term "MMBTU" shall mean 1,000,000 BTU's.

         1.4      "COMMITMENT DATE" has the meaning given it in Section 3.2.

         1.5      "CONSIDERATION ADJUSTMENT" has the meaning given it in Section
6.6(a).

         1.6      "CONSIDERATION BASIS" has the meaning given it in Section 6.2.

         1.7      "CONSIDERATION PAYMENT" has the meaning given it in Section
6.6(a).

         1.8      "CONSIDERATION REDUCTION" has the meaning given it in Section
6.7.

         1.9      "CONVEYANCE" means the Original Conveyance, as amended to date
and by this Agreement, and as it may hereafter be amended from time to time.

         1.10     "CUBIC FOOT OF GAS" shall mean the volume of Gas contained in
one cubic foot of space at a standard pressure base of 14.73 pounds per square
inch absolute, and at a standard temperature base of 60 (Degree)F. Whenever the
conditions of pressure and temperature differ from the above standard,
conversion of the volume from these conditions to the above stated standard
conditions shall be made in accordance with the Ideal Gas Laws, corrected for
deviation due to supercompressibility by the methods set forth in ANSI/API 2530,
as revised or amended from time to time, and further detailed in American
Petroleum Institute Manual of Petroleum Measurement Standards (API MPMS) Chapter
14, Section 2, American Gas Association (AGA) Report Number 3, "Compressibility
Factors of Natural Gas and Other Related Hydrocarbons," as revised or amended
from time to time. The terms "MCF" and "MMCF" shall mean, respectively, 1,000
Cubic feet of Gas and 1,000,000 Cubic feet of Gas.

         1.11     "DEDICATED LEASE" means a Lease owned by a Producer as of or
after the Commitment Date as provided in Section 3.2.

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         1.12     "EQUITY GAS" means Gas that is produced from a Dedicated Lease
and is owned and marketed by, or on behalf of, Producers. Equity Gas shall also
include any lessor's royalty Gas produced from a Dedicated Lease that is not
taken "in-kind" by lessor and which is marketed by, or on behalf of, Producers.
Equity Gas shall also include Gas produced from units which include Dedicated
Leases or portions thereof, but only to the extent that unit Gas production is
allocated to a Producer under the applicable unit agreement or order creating
the unit, and which allocated share of unit Gas production is marketed by, or on
behalf of, Producers. Equity Gas shall exclude the following:

                  (i)      Gas consumed by a Producer in the development and
                           operation of Dedicated Leases, including, but not
                           limited to, the following operations: drilling;
                           deepening; reworking of wells; compression; Gas lift;
                           treating; separation; operationally integrated power
                           generation; maintenance of facilities; and consumed
                           as fuel in such operations.

                  (ii)     Gas provided by a Producer to another operator or
                           producer in the general vicinity of such Producer's
                           operations to be used by such operators or producers
                           for purposes similar to those set forth in (i) above;
                           provided, however, if Gas furnished by Producer is
                           used for such purposes, Producer shall keep Processor
                           whole from an economic standpoint for any volumes
                           that are so used.

                  (iii)    Gas used by a Producer as makeup or non-consent Gas
                           to or for the benefit of Third Parties as may be
                           required under joint operating, Gas balancing or
                           other similar agreements and produced from wells
                           covered by such agreements, or to settle Gas
                           imbalance claims with other mineral and/or leasehold
                           interest owners.

                  (iv)     Gas used by a Producer to make payment of royalty
                           and/or overriding royalty in kind if required in the
                           Dedicated Leases or instruments pursuant to which
                           such royalties and overriding royalties were created,
                           excluding any overriding royalties held by Affiliates
                           of Producer.

                  (v)      Gas attributable to overriding royalty interests
                           owned by a Producer in Dedicated Leases, where such
                           Producer is receiving net proceeds in payment of its
                           overriding royalty interest in lieu of taking Gas in
                           kind.

                  (vi)     Gas produced from units which include Dedicated
                           Leases or portions thereof, but only to the extent
                           that unit Gas production is allocated to Third
                           Parties under the applicable unit agreement or order
                           creating the unit.

                  (vii)    Gas which is actually used by pipelines for fuel to
                           transport lease production and/or is otherwise
                           flared, lost or unaccounted for prior to delivery to
                           a Plant.

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                  (viii)   Gas which is precluded from being produced or
                           Processed due to governmental intervention,
                           regulations, laws or judicial or administrative
                           orders.

         1.13     "EXCEPTED LEASES" has the meaning given it in Section 17.4.

         1.14     "EXCLUDABLE GAS" has the meaning given it in Section 4.4.1.

         1.15     "EXCLUDED LEASES" means the leases listed on Exhibit B.

         1.16     "EXISTING EQUITY GAS" has the meaning given it in Section
4.3.1.

         1.17     "FIELD DELIVERY POINT" means any point at which Gas being
transported in Upstream Pipelines is measured for the purpose of allocating PTR
and Products from a Plant.

         1.18     "GALLON" means one U.S. Standard Liquid Gallon of 231 cubic
inches, adjusted to a temperature of 60(degree) F and either the equilibrium
pressure of the product at 60(degree) F or 14.696 psia, whichever is greater.

         1.19     "GAS" means all vaporized hydrocarbons and vaporized
concomitant materials whether produced from wells classified as oil wells or Gas
wells.

         1.20     "GAS PROCESSING RIGHTS" has the meaning given it in Section
                  3.1.

         1.21     "GEOGRAPHICAL SCOPE" means that area (i) within the state
waters of Louisiana, Texas, Mississippi, Alabama and Florida, and/or (ii) within
the federal waters of the United States of America in the Gulf of Mexico,
including any portion thereof claimed by Mexico.

         1.22     "GPM" means Gallons per MCF of Gas.

         1.23     "INJECTED LIQUIDS" means liquid hydrocarbons and liquid
concomitant materials that are delivered into an Upstream Pipeline.

         1.24     "LEASE" means any oil, Gas, and/or mineral lease or interest
therein owned now or hereafter acquired, in whole or part, by Producers or their
Affiliates within the Geographical Scope, except for Excluded Leases.

         1.25     "NEW EQUITY GAS" has the meaning given it in Section 4.3.1.

         1.26     "NEW VOLUMES" has the meaning given it in Section 2.3.2.

         1.27     "OFF-SPEC DELIVERIES" has the meaning given it in Section 5.3.

                                       5

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         1.28     "PERSON" means any individual or entity, including, without
limitation, any corporation, limited liability company, partnership (general or
limited), joint venture, association, joint stock company, trust, unincorporated
organization or government (including any board, agency, political subdivision
or other body thereof).

         1.29     "PLANT" means a natural Gas processing plant.

         1.30     "PLANT DELIVERY POINT" means the point where an Upstream
Pipeline interconnects with a Plant.

         1.31     "PLANT REDELIVERY POINT" means the point at or near the
tailgate of a Plant at which the Residue Gas is delivered by a Plant into any
interstate or intrastate pipeline connected to that Plant.

         1.32     "PROCESS" or "PROCESSING" means the removal of liquefiable
hydrocarbons and/or impurities from Gas using mechanical separation, extraction,
condensation, compression, absorption, stripping, refrigeration, adiabatic
expansion, and/or other generally accepted natural Gas processing methods.

         1.33     "PROCESSING PARTY" means Enterprise Products Operating L.P.
and any other wholly owned subsidiary of Enterprise Products Operating L.P.,
including Processor.

         1.34     "PROCESSOR" means Enterprise Gas Processing, LLC, a Delaware
limited liability company, and its successors and assigns.

         1.35     "PROCESSOR'S RETROGRADE" means (i) liquefiable hydrocarbons
that condense from Equity Gas in the Upstream Pipelines listed in Exhibit D, and
(ii) any liquid hydrocarbons that are collected in a Plant prior to Processing.
Processor's Retrograde shall not include Injected Liquids but shall include any
lessor's royalty share of such liquefiable hydrocarbons in clauses (i) and (ii)
of this definition not taken "in kind" by lessor.

         1.36     "PRODUCER" means each of those entities listed in the first
paragraph of this Agreement and their respective Affiliates, successors and
assigns (but as to any such assigns, only to the extent such assigns acquire all
or part of a lessee's interest in a Dedicated Lease).

         1.37     "PRODUCTS" means the individual liquefied hydrocarbons
recovered from Equity Gas and/or Processor's Retrograde by Processing including,
but not by way of limitation, condensate, natural gasoline, butanes, propane,
ethane, and/or any unfractionated mixture thereof including, in each case, such
methane as is liquefied and incidentally recovered.

         1.38     "PTR" means Plant thermal reduction or the heat content stated
in MMBTU's removed from Equity Gas and/or Processor's Retrograde as a result of
Processing, including those MMBTU's (i) associated with extraction of Products,
(ii) consumed in the operation of a Plant, and (iii) flared, lost or otherwise
unaccounted for in the operation of a Plant.

                                       6

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         1.39     "QUALITY SPECIFICATIONS" has the meaning given it in Section
5.1.

         1.40     "RAW MAKE" means a combined stream of liquefied hydrocarbons
and concomitant materials extracted from Equity Gas by Processing, including
Processor's Retrograde if subsequently combined with the other Raw Make.

         1.41     "REFUSED VOLUMES" has the meaning given it in Section 4.3.1.

         1.42     "RESIDUE GAS" means the portion of Equity Gas remaining after
removal of PTR and available for redelivery to a pipeline at the Plant
Redelivery Point.

         1.43     "ROYALTY CHARGES" has the meaning given it in Section 8.1(a).

         1.44     "SLUG LIQUIDS" means free water, liquid hydrocarbons and other
concomitant materials which are separated from Gas upstream of the Plant
Delivery Point.

         1.45     "TERMINATION DATE" has the meaning given it in Section 2.2.

         1.46     "THIRD PARTY" means any Person that is not a Producer or
Processor.

         1.47     "THIRD PARTY CONTRACT" has the meaning given it in Sections
4.3.1 and 4.4.1.

         1.48     "UPSTREAM PIPELINE" means any pipeline that transports Gas
and/or Slug Liquids between the Field Delivery Points and the Plant Delivery
Points.

2.       TERM.

         2.1      PRIMARY AND SUCCESSIVE TERMS. The term of this Agreement shall
begin on August 1, 1999, and continue for a primary term of 20 years. At the end
of the primary term, the term of this Agreement shall be automatically extended
for ten successive two year terms, unless sooner terminated under Section 2.2.

         2.2      TERMINATION OF AGREEMENT. The Processor or any Producer shall
have the right, subject to Section 2.3, to terminate this Agreement as to such
Producer at the end of the primary term or at the end of any successive two year
term thereafter ("TERMINATION DATE") by giving written notice of termination, in
accordance with Section 18.6, no sooner than 20 nor later than 18 months prior
to the expiration of the then effective primary term or two year successive
term.

         2.3      SURVIVAL PROVISION.

                  2.3.1    POST TERMINATION: CONTINUATION AS TO DEDICATED
LEASES. Notwithstanding termination of this Agreement pursuant to Section 2.2
above, the Gas Processing Rights held by Processor and all the provisions of
this Agreement shall continue in full force and effect with respect to each
Lease which is a Dedicated Lease as of the Termination Date until the expiration
of each such Dedicated Lease.

                                       7

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                  2.3.2    POST TERMINATION: PROPOSALS FOR NEW VOLUMES. For a
period of 20 years after the Termination Date, as to Gas which is discovered and
is to be ultimately produced by Producers from Leases which were not Dedicated
Leases as of the Termination Date ("NEW VOLUMES"), Producers agree to provide
Processor, as soon as reasonably practicable, with notice of the estimated
quantity of New Volumes and the estimated date on which such New Volumes will be
available for Processing. Producers further agree that they will provide
Processor a nonexclusive opportunity to submit a proposal to Process the New
Volumes. If, in the sole discretion of the Producer offering the New Volumes,
the proposal of Processor is not acceptable, then the Producer will notify
Processor of such, without any obligation to disclose terms or conditions of, or
differences between, other proposals. The Producer will then enter into
negotiations with Processor for no more than a 15-day period in an effort to
enter into agreements concerning the New Volumes. If Processor and Producer do
not enter into such mutually agreeable Processing agreements within the 15-day
period, then Producer shall be free to deliver and/or dedicate said New Volumes,
in its sole discretion, and for any purpose, to a Third Party.

3.       ASSIGNMENT OF GAS PROCESSING RIGHTS.

         3.1      GRANT OF PROCESSING RIGHTS. Subject to the other provisions of
this Agreement, Producers hereby grant, sell, transfer, convey and assign to
Processor the following (the "GAS PROCESSING RIGHTS"):

                  (1)      the exclusive right to process any and all Equity Gas
                           for the extraction and retention of liquefiable
                           hydrocarbons and other constituents of Raw Make
                           and/or Products;

                  (2)      all title, interest and /or ownership in Raw Make
                           and/or Products recovered from Processing Equity Gas;
                           and

                  (3)      the right and option to assume, subject to this
                           Agreement, any contract for the Processing of Equity
                           Gas, including all of a Producer's rights and
                           obligations therein, that is assumed by a Producer in
                           connection with the acquisition of a Lease, provided
                           that Processor has given written notice to the
                           Producer of Processor's exercise of its option to
                           assume such contract within 90 days of Processor's
                           receipt of written notice from the Producer that
                           Producer has assumed or intends to assume such
                           contract in connection with its acquisition of a
                           Lease, which said notice shall be given by Producer
                           to Processor at a reasonable time.

It is the intention of the Parties to confer on the Processor, subject to this
Agreement, the Gas Processing Rights, and the economic benefits and burdens to
be derived therefrom, for all Gas from Leases, whether derived from (a) Leases
which are currently owned by a Producer and which are currently Dedicated Leases
or which subsequently become Dedicated Leases or (b) Leases which are
subsequently acquired by a Producer and which are Dedicated Leases as of the
date of acquisition or which subsequently become Dedicated Leases while still
owned by a Producer, subject only to (i) rights previously granted by the
transferors of subsequently acquired Leases to Third Parties as provided in
Section 3.3 and (ii) the right of Producers under Section

                                       8

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3.2 to transfer, free of Processor's rights under this Agreement, Leases that at
the time of transfer are not Dedicated Leases.

         3.2      ATTACHMENT OF GAS PROCESSING RIGHTS. This conveyance of Gas
Processing Rights shall be irrevocable as to Dedicated Leases, except for
Excluded Leases. A Lease shall be considered a Dedicated Lease upon the earliest
of that point in time (the "COMMITMENT DATE"): when (i) when a well is spud on
the Lease; (ii) a Plan of Exploration or similar document including all or part
of the Lease is submitted or amended to the appropriate regulatory agency and a
well is or has been spud on any of the Leases included in the Plan of
Exploration; (iii) a Development Operations Coordination Document or similar
document including all or part of the Lease is submitted or amended to the
appropriate regulatory agency; or (iv) Gas production begins from the Lease. A
Lease acquired by a Producer shall become a Dedicated Lease on the later of (1)
the effective date of the acquisition of such Lease by Producer if at any time
prior to such acquisition an event occurred that would constitute a Commitment
Date had the Producer owned an interest in such Lease at the time of such event,
or (2) the later Commitment Date for such Lease. Dedicated Leases as of August
1, 1999 are listed on Exhibit A. Producer shall have the right to transfer,
sell, assign, exchange or otherwise alienate a Lease free of any obligations
under this Agreement and without any obligation to the Processor with respect to
the Lease prior to its Commitment Date. In the case of a transfer, sale,
assignment, exchange or other alienation of a Lease or an interest therein to a
Third Party pursuant to what is generally known in the petroleum industry as a
"perform to earn" contract, said transfer, sale, assignment, exchange or other
alienation shall for purposes of this Agreement be considered to have taken
place on the date on which such fully executed and delivered perform to earn
contract is effective, not the later date on which the rights earned under said
perform to earn contract are earned, nor the date on which said transfer, sale,
assignment, exchange or other alienation is executed or made effective;
provided, however, in the event any such Lease or interest therein reverts to
Producer, it shall again be subject to this Agreement.

         3.3      PRODUCERS' NONDISTURBANCE COVENANT; PRIOR RESERVATIONS OR
CONTRACTS. Excepting Producers' rights to sell, assign, exchange or otherwise
alienate Leases as provided for in Section 3.2 and Producer's rights to enter
into agreements which could cause Gas to be excluded from Equity Gas under
Sections 1.12(i) through 1.12(viii), Producers agree not to make any assignment
or conveyance of, or enter into any other obligation concerning Gas Processing
Rights with respect to, any Lease to the prejudice of Processor or its rights
under this Agreement. Producers further agree that, in connection with the
acquisition of a Lease, they will not permit the transferor to reserve to itself
or convey to any Person other than a Producer any right to Process Equity Gas to
be produced from the Lease. However, as to any Lease acquired by a Producer
subject to a prior grant of rights to Process Equity Gas to be produced under
the Lease to Persons other than a Producer, Processor's rights under this
Agreement shall be subject to such rights previously granted, to the extent
thereof.

         3.4      PROCESSOR'S RIGHT TO CONSUME PTR. In conveying the Gas
Processing Rights under this Agreement, Producers acknowledge and agree that the
Equity Gas Processed in a Plant will be subject to a PTR incidental to the
exercising of the Gas Processing Rights, and Producers hereby grant to Processor
the rights to consume Equity Gas as PTR associated with Processor's Retrograde
and Products.

                                       9
<PAGE>

* CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY
FILED WITH THE COMMISSION, AND THE APPROPRIATE SECTION HAS BEEN MARKED AT THE
APPROPRIATE PLACE AND THE MARGIN WITH A STAR (*).

         3.5      TITLE TO RAW MAKE, PRODUCTS, PROCESSOR'S RETROGRADE AND PTR.
Producers hereby (i) represent and warrant to Processor that title to the
liquefiable hydrocarbons in Equity Gas is and will be free from all production
burdens, liens and adverse claims, (ii) warrant their right to sell the same and
(iii) agree to indemnify, defend and hold harmless Processor against all claims
to said liquefiable hydrocarbons arising (x) by, through, or under Producers or
(y) prior to Producers' delivery of said liquefiable hydrocarbons to Processor.
The transfer of title to the extracted liquefiable hydrocarbons shall pass to
Processor at the meters for Raw Make and/or Products, as appropriate, of the
applicable Plant. The Processor and Producers acknowledge and agree that title
to PTR does not pass to Processor.

         3.6      LIMITATIONS ON UPSTREAM PROCESSING.

                  3.6.1    PRODUCER'S OPERATIONAL REQUIREMENTS. Producers agree
         that, except as dictated by operational requirements, including the
         need to meet pipeline specifications (excepting when such need will be
         met by Processor under this Agreement), they will not remove or permit
         to be removed any liquefiable hydrocarbons from Equity Gas upstream of
         the Plants except for (i) liquefiable hydrocarbons that condense from
*        the Gas during transportation to the Plants and (ii) [REDACTED].

                  3.6.2    PROCESSOR'S EXCLUSIVE RIGHTS. The rights granted to
         Processor herein are exclusive, and Producers shall use their
         commercially reasonable efforts to ensure that no owner or operator of
         an Upstream Pipeline shall have or exercise any right or opportunity to
         Process, or extract Products from, Equity Gas as to which the Gas
         Processing Rights have been conveyed to Processor under this Agreement.

                  3.6.3    NGL BANKS. In the event that any Upstream Pipeline or
         the shippers on an Upstream Pipeline institute a bona fide mechanism to
         mitigate inequities that may occur between shippers on such Upstream
         Pipeline as a result of such shippers' Gas streams containing different
         liquifiable hydrocarbon compositions being commingled in a pipeline
         with multiple delivery points located upstream of Gas Processing Plants
         (an "NGL BANK"), Producers and Processor agree to participate in the
         NGL Bank so as to confer on Processor the financial benefits and
         detriments related to such liquifiable hydrocarbons under the terms of
         the NGL Bank. Producers and Processor agree to execute and deliver to
         one another such instruments as may be necessary or useful and to take
         such further actions as may be reasonably necessary to carry out or
         further evidence the intent of this Section 3.7. Pending execution of
         such instruments, Producers shall not be required to curtail any Equity
         Gas production. However, Producers shall ensure Processor receives all
         financial benefits and detriments referenced in this Section 3.7 from
         the date of initiation of the NGL Bank.

                                       10
<PAGE>

4.       PROCESSOR'S OBLIGATION TO PROCESS AND REDELIVER; LIMITATIONS.

         4.1      PROCESSOR'S OBLIGATION TO PROCESS AND REDELIVER RESIDUE GAS.
Subject to the provisions of this Agreement, throughout the term of this
Agreement and for any subsequent period of time as contemplated by Section
2.3.1, Processor agrees to Process, or cause to be Processed, all Equity Gas.
After Processing Equity Gas and/or Slug Liquids and the recovery of the Raw
Make, Products and Processor's Retrograde therefrom, Processor shall deliver or
cause to be delivered Producers' Residue Gas to Producers or Producers' designee
at the applicable Plant Redelivery Point.

         4.2      TEMPORARY CESSATION OF PROCESSING. If at any time or from time
to time Processor reasonably determines that the temporary cessation of
Processing Equity Gas at a Plant would not cause curtailment of the applicable
Equity Gas, then Processor shall have the option, in its sole discretion, to
temporarily cease Processing at that Plant. Processor shall provide Producer
with at least two business days' notice of any such election to temporarily
cease Processing or to subsequently recommence Processing at a Plant and shall
not change its election more than two times in a month.

         4.3      REFUSED VOLUMES.

                  4.3.1    INSUFFICIENT CAPACITY; OPTION TO REFUSE VOLUMES. If
Processor accepts or has previously accepted for Processing Equity Gas from a
Dedicated Lease, it may not thereafter refuse to Process any Equity Gas produced
from or allocated to such Dedicated Lease ("EXISTING EQUITY GAS") on the basis
of insufficient Plant capacity, except as provided hereafter in this Section
4.3.1. Processor may, at its option, to be exercised by Processor as soon as
reasonably practicable by providing the applicable Producer with written notice
of such election, elect to Process or not to Process a volume of ("REFUSED
VOLUMES"):

                  (i) Equity Gas produced from or allocated to a Dedicated Lease
                  from which it has not previously accepted Equity Gas for
                  Processing ("NEW EQUITY GAS") that exceeds or that Processor
                  reasonably expects to exceed its available Processing capacity
                  at a Plant; and/or

                  (ii) Existing Equity Gas to the extent and only to the extent
                  that (a) such Existing Equity Gas exceeds or is reasonably
                  expected by Processor to exceed 120 percent of the most recent
                  12 month average MCF volume of the aggregate of all such
                  Existing Equity Gas delivered to a Plant, as measured at the
                  applicable Field Delivery Point(s), or if a 12 month
                  volumetric history is not available for such Existing Equity
                  Gas, then 120 percent of the peak volume for such Existing
                  Equity Gas from the most recent 12 month forecast provided by
                  Producer, and (b) such Existing Equity Gas exceeds or is
                  reasonably expected by Processor to exceed its available
                  processing capacity at a Plant.

If Processor elects not to Process such Refused Volumes, Producer may,
nonetheless, by written notice to Processor, require that Processor and Producer
enter into exclusive good faith

                                       11
<PAGE>

negotiations for a period of 90 days from the date of the notice to negotiate
the terms and conditions of a mutually agreeable alternative Processing
arrangement for the Refused Volumes that would allow Processor in its sole
judgment to economically acquire or construct additional capacity at the Plant.
If within the 90-day period Processor and Producer are unable to negotiate and
execute a definitive agreement related thereto, Producer shall be free to
negotiate and enter into an agreement with any one or more Third Parties for
Processing services ("THIRD PARTY CONTRACT") for the Refused Volumes that
Processor has elected not to Process hereunder; provided that (i) the terms of
each such Third Party Contract are, taken as a whole, more favorable to the
Producer than the terms for Processing services last offered by Processor to
Producer during the 90-day period, and (ii) each such Third Party Contract
provides that Producer may at any time freely assign such Third Party Contract
to Processor, and that Processor shall succeed to all of Producer's rights and
obligations under the Third Party Contract that arise as of and after the
effective date of any such assignment.

                  4.3.2    OPTION TO REACQUIRE REFUSED VOLUMES. Processor shall
have the option, exercisable by written notice to Producer given at any time on
or before the later of the first anniversary of the (a) effective date of a
Third Party Contract, (b) date on which said Third Party Contract was fully
executed and delivered or (c) date Gas was first delivered under said Third
Party Contract, to take an assignment from Producer of a Third Party Contract,
effective on the first day of the third month following the month in which the
notice is given to Producer, provided that Processor shall promptly reimburse
Producer for all direct costs that were incurred by Producer in connection with
acquiring the Third Party Contract. Promptly following the execution and
delivery of a Third Party Contract, Producer shall furnish Processor with a copy
of the Third Party Contract and, to the extent not included in the Third Party
Contract, an itemized statement showing all of the direct costs incurred by
Producer in connection with acquiring the Third Party Contract. Equity Gas that
becomes subject to a Third Party Contract as Refused Volumes shall, upon
termination of such Third Party Contract, again be subject to this Agreement as
Existing Equity Gas.

         4.4      EXCLUDABLE GAS.

                  4.4.1    OPTION TO EXCLUDE CERTAIN GAS. Processor may, at its
option, elect to Process or not Process all or any part of New Equity Gas that
contains or that Processor reasonably expects to contain less than or equal to
0.5 GPM of ethane and heavier hydrocarbons as measured at a Field Delivery Point
("EXCLUDABLE GAS") and agrees to provide the applicable Producer with notice of
such election as soon as reasonably practicable. Processor may not elect to
refuse to Process any Existing Equity Gas under the provisions of this Section
4.4.1 as Excludable Gas. If Processor elects not to Process such Excludable Gas,
Producer may, nonetheless, by written notice to Processor, require that
Processor and Producer enter into exclusive good faith negotiations for a period
of 90 days from the date of the notice to negotiate the terms and conditions of
a mutually agreeable alternative Processing arrangement for the Excludable Gas.
If within the 90-day period Processor and Producer are unable to negotiate and
execute a definitive agreement related thereto, Producer shall be free to
negotiate and enter into an agreement with any one or more Third Parties for
Processing services ("THIRD PARTY CONTRACT") for the Excludable Gas that
Processor has elected not to Process hereunder; provided that (i) the terms of
each such Third Party Contract are, taken as a whole, more favorable to the

                                       12
<PAGE>

Producer than the terms for Processing services last offered by Processor to
Producer during the 90-day period, and (ii) each such Third Party Contract
provides that Producer may at any time freely assign such Third Party Contract
to Processor, and that Processor shall succeed to all of Producer's rights and
obligations under the Third Party Contract that arise as of and after the
effective date of any such assignment.

                  4.4.2    OPTION TO REACQUIRE EXCLUDABLE GAS. Processor shall
have the option, exercisable by written notice to Producer given at any time on
or before the later of the first anniversary of the (a) effective date of a
Third Party Contract, (b) date on which said Third Party Contract was fully
executed and delivered or (c) date Gas was first delivered under said Third
Party Contract, to take an assignment from Producer of a Third Party Contract,
effective on the first day of the third month following the month in which the
notice is given to Producer, provided that Processor shall promptly reimburse
Producer for all direct costs that were incurred by Producer in connection with
acquiring the Third Party Contract. Promptly following the execution and
delivery of a Third Party Contract, Producer shall furnish Processor a copy of
the Third Party Contract and, to the extent not included in the Third Party
Contract, an itemized statement showing all of the direct costs incurred by
Producer in connection with acquiring the Third Party Contract. Equity Gas that
becomes subject to a Third Party Contract as Excludable Gas shall, upon
termination of such Third Party Contract, again be subject to this Agreement as
Existing Equity Gas.

         4.5      SUSPENSION IN CASE OF DANGEROUS CONDITION. If any of
Producers' operations or any of the Equity Gas or Slug Liquids delivered
hereunder create a condition that, in the exclusive judgment of Processor, may
endanger a Plant or property of Processor or the lives or property of
Processor's employees or any Third Party, Processor may, without liability,
immediately discontinue receipt of such Equity Gas and/or Slug Liquids, as the
case may be, until the condition has been remedied to the reasonable
satisfaction of Processor.

5.       SPECIFICATIONS FOR GAS AND SLUG LIQUIDS.

         5.1      QUALITY SPECIFICATIONS. Producers shall deliver Equity Gas and
Injected Liquids to each Field Delivery Point in conformity with the
specifications (except for all specifications for liquefiable hydrocarbon
content) of the applicable Upstream Pipeline (the "QUALITY SPECIFICATIONS").

         5.2      TESTING. The determination as to the conformity of Equity Gas
or Injected Liquids to the Quality Specifications shall be made by Processor in
accordance with generally accepted procedures of the Gas Processing industry.
Such determinations shall be made as often as Processor deems necessary, and
Producer may witness such determinations or make joint determinations with its
own appliances. If, in a Producer's judgment, the result of any such test or
determination is inaccurate, Processor, at such Producer's request, will again
conduct the questioned test or determination, and the costs of such additional
test or determination shall be borne by said Producer unless same shows the
original test or determination to be materially inaccurate.

                                       13
<PAGE>

         5.3      OFF-SPEC DELIVERIES. If any of Equity Gas or Injected Liquids
delivered at a Field Delivery Point fail to meet the Quality Specifications
("OFF-SPEC DELIVERIES"), Processor, subject to the provisions of Sections 5.4,
5.5 and 5.6, at its sole option, may accept, or notify the appropriate Producer
to discontinue or curtail, such Off-Spec Deliveries. Processor's acceptance of
Off-Spec Deliveries shall not be deemed a waiver of Processor's right to later
reject such Off-Spec Deliveries, nor shall acceptance of Off-Spec Deliveries
from one Field Delivery Point require Processor to accept similar Off-Spec
Deliveries from any other Field Delivery Point.

         5.4      NOTIFICATION OF NON-CONFORMITY; REJECTION OF DELIVERY.
Processor shall notify a Producer of any Off-Spec Deliveries, and Producer shall
make a diligent effort to conform such Equity Gas and/or Injected Liquids to the
Quality Specifications. If any Producer reasonably concludes that it cannot
economically deliver Equity Gas and/or Injected Liquids conforming to the
Quality Specifications, then such Producer shall so advise Processor in writing
within 30 days after receipt of Processor's notice. Within 30 days after receipt
of Producer's notice, Processor shall give notice to the Producer in writing of
its election to accept or reject such Off-Spec Deliveries. If Processor rejects
such Off-Spec Deliveries, then upon receipt of Processor's notice of same by
such Producer, Processor may, without liability, refuse to accept delivery of
such Off-Spec Deliveries until such time as the Off-Spec Deliveries conform to
the Quality Specifications or Processor subsequently notifies such Producer of
its acceptance of the Off-Spec Deliveries.

         5.5      ACCEPTANCE OF NONCONFORMING PRODUCT. If Processor accepts such
Off-Spec Deliveries, Processor, after written notice to a Producer as specified
in Section 5.4, may charge such Producer any reasonable costs incurred by
Processor to monitor the quality of Equity Gas and/or Injected Liquids and bring
them within the Quality Specifications. Processor shall invoice such Producer on
a monthly basis for any such costs, the payment of which shall be due and
payable within 30 days after the Producer's receipt thereof.

         5.6      PROCESSOR'S LIMITED COMMITMENT TO ACCEPT NON-CONFORMING
PRODUCT. Notwithstanding the provisions of Sections 5.3, 5.4 and 5.5, Processor
agrees that it will use reasonable efforts to continue acceptance of a
Producer's Off-Spec Deliveries for Processing in those cases where (i) Section
4.6 does not apply and (ii) the acceptance of such Off-Spec Deliveries does not
(x) cause damage to a Plant, (y) render a Plant unable to meet applicable
specifications of the pipelines receiving Residue Gas at the Plant Redelivery
Points or of the purchaser or transporter of the Products from the Plant, or (z)
cause the Plant to violate applicable emissions permits or other regulatory
requirements.

         5.7      SPECIFICATIONS FOR RESIDUE GAS REDELIVERED BY PROCESSOR.
Processor will take commercially reasonable actions within its control to assure
that the Residue Gas redelivered by Processor complies with the specifications
in effect on the date of delivery to the pipeline transporter receiving such
Residue Gas at the applicable Plant Redelivery Point so long as the Equity Gas
attributable to such Residue Gas met the same specifications (except for all
specifications for liquefiable hydrocarbon content) at the applicable Field
Delivery Point.

                                       14
<PAGE>

* CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY
FILED WITH THE COMMISSION, AND THE APPROPRIATE SECTION HAS BEEN MARKED AT THE
APPROPRIATE PLACE AND THE MARGIN WITH A STAR (*).

         5.8      OFF SPEC PIPELINE. Nothing in this Agreement shall require
Processor to accept delivery of any Gas that does not conform to the Quality
Specifications at the Plant Delivery Point.

6.       CONSIDERATION.

         6.1      PAYMENT. For each calendar month during the term of this
Agreement, Processor agrees, for each Plant, to pay to each of the respective
Producers delivering Equity Gas to such Plant, a cash amount equal to the
product of:

                  (1)      the Consideration Basis, as defined in Section 6.2,
                           for the respective Plant; and

                  (2)      the PTR for (1) such Producer's Equity Gas Processed
                           at such Plant and (2) any Processor's Retrograde
                           associated with such Producer's Equity Gas.

         6.2      CONSIDERATION BASIS. For purposes of Section 6.1, the term
"CONSIDERATION BASIS" shall mean, and be defined as, for each calendar month
* during the term of this Agreement, the [REDACTED].

         6.3      CONSIDERATION TIMING. Processor shall pay to Producer the
applicable cash consideration set forth in Section 6.1 (as same may be adjusted
pursuant to Section 6.6 of this Agreement) no later than the third to last
business day of the second month following the month in which the subject PTR
and Processor's Retrograde is delivered to a Plant, such payment to be made by
wire transfer of immediately available funds to an account designated from time
to time by Producers at least fifteen days prior to the date any such payment is
due and payable by Processor. In the event a particular Producer owes an amount
hereunder to Processor, it may be netted by Processor against the applicable
amount owing to such Producer hereunder.

*        6.4      CONSIDERATION BASIS UPDATES. [REDACTED].

         6.5      PROCESSOR PROVIDED PTR. Producers and Processor acknowledge
and agree that, in lieu of, and as an alternative to, any cash payment required
under Section 6.1 to be paid by Processor to Producers, Processor shall have an
election to provide, from time to time, PTR at a particular Plant for
Processor's own account in respect of all of Producer's Equity Gas Processed at
such Plant. Processor agrees that any such election to provide PTR for its own
account shall be effective on the first day of a month, and that Processor shall
provide Producers with at least fifteen days' prior written notice of any such
election. If, for any particular month, Processor has elected to provide PTR for
its own account, Processor shall not be entitled to rescind, revoke or change
such election for such month. Processor agrees to provide any notifications with
respect

                                       15
<PAGE>

* CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY
FILED WITH THE COMMISSION, AND THE APPROPRIATE SECTION HAS BEEN MARKED AT THE
APPROPRIATE PLACE AND THE MARGIN WITH A STAR (*).

to such Processor-provided PTR that may be required by an Upstream Pipeline to
which Processor delivers such PTR.

         6.6      CONSIDERATION ADJUSTMENT.

                  (a)      The cash amount of the total of all payments to be
made by Processor to each of the respective Producers calculated under Section
6.1 (the "CONSIDERATION PAYMENT") shall be adjusted, proportionately for each
such payment, for each calendar month during the term of this Agreement as
follows (the "CONSIDERATION ADJUSTMENT"):

*                          (i)      [REDACTED]; or

*                          (ii)     [REDACTED]; or

*                          (iii)    [REDACTED]; or

*                          (iv)     [REDACTED].

                  (b)      Processor shall provide Producer with an estimate of
the Average Net Margin and the Products Volume for each calendar month, in
writing, no later than the fifth business day of the next calendar month
following the month in which the PTR and Processor's Retrograde is delivered to
a Plant.

                  (c)      For purposes of this Section 6.6, the following
definitions shall be applicable.

                           (i)      "AVERAGE NET MARGIN" means the Average Gross
                                    Margin less the Calculated Expenses.

                           (ii)     "AVERAGE GROSS MARGIN" means (A) the
                                    Products Value minus the PTR Value divided
                                    by (B) the Products Volume.

                           (iii)    "PRODUCTS VALUE" means the Products Volume
                                    multiplied by the Products Price.

                           (iv)     "PRODUCTS PRICE" means: (A) for natural gas
*                                   liquids, [REDACTED]; and (B) for condensate,
*                                   [REDACTED], divided by 42.

                                       16
<PAGE>

* CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY
FILED WITH THE COMMISSION, AND THE APPROPRIATE SECTION HAS BEEN MARKED AT THE
APPROPRIATE PLACE AND THE MARGIN WITH A STAR (*).

                           (v)      "PRODUCTS VOLUME" means the total volume of
                                    Products, in Gallons, allocated to Processor
                                    for Equity Gas in a calendar month,
*                                   [REDACTED].

                           (vi)     "PTR VALUE" means the sum, for a calendar
                                    month, of the product of the PTR and the
                                    Consideration Basis for each Plant where
                                    Equity Gas is Processed during such calendar
                                    month plus the total amount paid by
                                    Processor to Producers for transportation of
                                    PTR and Processor's Retrograde for such
                                    calendar month as set forth in Section 7
                                    below.

                           (vii)    "CALCULATED EXPENSES" means the monthly
                                    expenses associated with the Processing of
                                    Equity Gas, in cents per Gallon, calculated
                                    for each calendar month using the following
                                    formula:

*                                   [REDACTED]

                          Where:

                          X equals the index price, in dollars per million BTUs,
*                         [REDACTED]; and

*                         Y equals [REDACTED].

                  (d)      If for any reason any of the price indexes used in
this Section 6.6 cease to be published, then such affected index price(s) shall,
if available, be obtained from an alternative industry publication (private or
government) which publishes the same pricing information. If an index price is
no longer available, then Producer and Processor shall, within 60 days of the
first day of the month that the cessation occurred, agree upon an alternate
pricing mechanism for such affected index price(s). The alternate pricing
mechanism agreed upon shall apply retroactively to the first day of the month
that the former index terminated. If the Parties cannot agree on an alternate
pricing mechanism within the 60 day period, then the issue of how such affected
index price(s) should be determined shall be a Dispute under this Agreement. It
is the intent of the Parties that any replacement methodology or index shall
resemble as closely as possible the index being replaced.

         6.7      CONSIDERATION REDUCTION.

         For each calendar month during the term of this Agreement, and any
continuation thereof under Section 2.3.1, each Consideration Payment shall be
proportionately reduced by an amount equal to the product of V and W
("CONSIDERATION REDUCTION");

         Where:

                                       17
<PAGE>

* CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY
FILED WITH THE COMMISSION, AND THE APPROPRIATE SECTION HAS BEEN MARKED AT THE
APPROPRIATE PLACE AND THE MARGIN WITH A STAR (*).

*        V initially equals [REDACTED]; and

*        W equals [REDACTED]

7.       PTR AND PTR TRANSPORTATION.

         Producers shall provide, or cause to be provided, the PTR and the
transportation for (i) the PTR associated with the Processing of Equity Gas and
(ii) Processor's Retrograde from the wellhead to the Plant Delivery Point, for
all Equity Gas and Processor's Retrograde subject to the payment of
consideration under Article 6. Producers shall also pay for all necessary
facilities to cause the Equity Gas and/or Injected Liquids to meet the Quality
Specifications and all other costs associated with delivering such PTR and
Processor's Retrograde to the Plant Delivery Point. Processor shall pay
Producers, for transportation of the PTR and Processor's Retrograde referenced
in this Article 7, an amount equal to three cents ($0.03) per MMBTU. If
Processor provides PTR for its own account under Section 6.5, Processor shall
provide, or cause to be provided, transportation for such PTR at its sole
expense.

8.       ROYALTY.

         8.1      RESPONSIBILITY FOR ROYALTY PAYMENTS.

                  (a)      As between Processor and Producers, (i) Producers
shall be and remain fully liable for, and shall be fully responsible for
remitting any and all payments to the Department of the Interior, the Minerals
Management Service, the States of Louisiana, Texas, Mississippi, Alabama and
Florida, any other governmental agencies or authorities, and any private lessors
who are not federal or state lessors in respect of, any and all federal, state
or local royalties and/or severance taxes due on any or all hydrocarbon
production of Producers or which in any way relate to, or are in connection
with, any of the transactions under this Agreement, including, without
limitation, any such federal, state or local royalties and/or severance taxes
on, relating to, or calculated on the basis of, any value of (x) the PTR used by
Processor, (y) the Products extracted from the Equity Gas and (z) Processor's
Retrograde (collectively, "ROYALTY CHARGES"), and (ii) Processor shall have no
liability for or in respect of any such Royalty Charges.

                  (b)      Producers hereby agree to hold harmless and indemnify
Processor (and its Affiliates) from and against, and shall fully and promptly
reimburse Processor (and its Affiliates) for, any and all claims, demands, and
causes of action of any kind and all losses, damages, costs, and expenses
(including court costs and reasonable attorneys' fees) arising from, relating
to, or in connection with, any Royalty Charges.

                                       18
<PAGE>

         8.2      DELIVERY OF ROYALTY TAKEN IN KIND. Any request by a private,
state or federal governmental lessor to take royalty production in kind for any
Raw Make or Products recovered through Processing shall, if lawful, be fulfilled
by Processor's delivery to the lessor or its designee of such in kind royalty at
a specified location, all as may be required in accord with properly promulgated
notices, regulations, or lease terms and to the extent that such delivery by
Processor is approved (if required) by private, state or federal lessor. In such
case, Processor shall be entitled to recover all costs allowed by statute,
regulation or lease term including but not limited to costs of transportation
and administrative services. In the event that Processor is prohibited from
fulfilling such in kind royalty requests by the private state or federal lessor,
then Processor shall be relieved of such obligation but shall tender to
Producers an amount of Raw Make or Products recovered from Processing sufficient
to fulfill such obligations at a mutually agreeable delivery point.

         8.3      COMPLIANCE WITH FEDERAL ACTS. As between Processor and
Producers, Processor agrees to fulfill Producers' obligation under Section
8(b)(7) of the Outer Continental Shelf Lands Act of 1978 by offering Processor's
Retrograde and Products recovered through processing at the market value and
point of delivery provided by regulators to small and independent refiners as
defined in the Emergency Petroleum Allocations Act of 1973. Processor shall be
entitled to retain the proceeds derived from such sale. In the event Processor
is prevented for any reason from fulfilling this obligation, Processor shall
tender to Producers' sufficient volumes of such Processor's Retrograde and
Products sufficient for Producers themselves to fulfill such obligation, and
Producers shall reimburse Processor for such liquids at a mutually agreed price
which shall include the cost of handling and administration of such sales.
Producer shall be entitled to retain the proceeds derived from such sale.

9.       METERING, ANALYSIS, AND ALLOCATION.

         9.1      GAS METERING, ANALYSIS AND REPORTS.

                  9.1.1    Producers shall be responsible for the metering at
the Field Delivery Points of all Equity Gas and Injected Liquids, the
calibration of such meters and any disputes with respect to such metering.
Producers agree to use reasonable efforts to cause Gas meters to be tested on a
minimum 45-day frequency for correct calibration and agree to provide, or cause
to be provided, to Processor reasonable access to all meters.

                  9.1.2    Producers shall furnish to Processor such statements
as Processor may reasonably require to show the volume in MCF of Equity Gas
delivered to Upstream Pipelines during a month at each of Producers' Field
Delivery Points no later than the tenth business day of the month immediately
following the month in which such Gas is delivered to the Upstream Pipeline.
This information may be conveyed by facsimile transmission, with subsequent
written confirmation, if necessary to meet the aforesaid deadline.

                  9.1.3    Producers shall furnish to Processor a representative
sample of Equity Gas measured at each Field Delivery Point that identifies GPM
for each liquefiable hydrocarbon component in accordance with generally accepted
industry standards by no later than the tenth business day of the month
immediately following the month in which such Gas is delivered to

                                       19
<PAGE>

the Upstream Pipeline. This information may be conveyed by facsimile
transmission, with subsequent written confirmation, if necessary to meet the
aforementioned deadline.

         9.2      LIQUIDS METERING AND ANALYSIS. Processor shall be responsible
for the metering and analysis of all liquefiable hydrocarbons extracted from
Equity Gas, calibration of such meters and any disputes with respect to such
metering. Processor agrees to cause such liquids meters to be tested on a
minimum 45-day frequency for correct calibration and agrees to provide, or cause
to be provided to Producers, reasonable access to such meters.

         9.3      METER FAILURE. In the case of the failure of any measurement
meter of a Plant with multiple Gas suppliers, the residue stream attributable to
Equity Gas production shall be determined and allotted to Producers according to
the provisions of either the applicable agreement controlling the construction
and operation of the Plant involved or according to related agreements executed
between the owners of the Plant and the owners of any Upstream Pipeline.

10.      INDEMNITY.

         Processor hereby indemnifies and holds Producers harmless against any
and all claims, demands, and causes of action of any kind and all losses,
damages, costs, and expenses (including court costs and reasonable attorneys'
fees) arising from injuries to persons or property attributable to the Equity
Gas or Processor's Retrograde, after delivery thereof has been made to Processor
at a Plant Delivery Point. Producers hereby indemnify and hold Processor
harmless against any and all claims, demands, and causes of action of any kind
and all losses, damages, costs, and expenses (including court costs and
reasonable attorneys' fees) arising from injuries to persons or property
attributable to the Equity Gas or Injected Liquids, including but not limited to
Processor's Retrograde, prior to delivery to Processor at the Plant Delivery
Point(s) and after Producer's share of the Residue Gas and Products (if
applicable under Section 8.2) is delivered to Producer or Producer's designee at
the Plant Redelivery Point(s).

11.      CURTAILMENT.

         11.1     MUTUAL AGREEMENT NOT TO CURTAIL OR WITHHOLD. Producers agree
not to unreasonably or arbitrarily withhold production of Equity Gas solely to
prejudice the rights granted to Processor hereunder. However, Producers will
have no liability to Processor under this Agreement if production is restricted
or curtailed for any good faith reason. Likewise, Processor agrees not to
arbitrarily withhold Processing services solely to prejudice the rights granted
to Producer hereunder. In any such case, Processor shall have no liability to
Producer if Processing services are withheld for any good faith reason.

         11.2     LIMITED RIGHT TO INTERRUPT PERFORMANCE FOR MAINTENANCE, ETC.
Processor and any Producer may, without liability, interrupt its performance
hereunder for the purpose of making necessary or desirable inspections,
maintenance, repairs, alterations and replacements; and the Processor or
Producer requiring such relief shall give to the other reasonable notice of its
intention to interrupt its performance hereunder, except in cases of emergency
where such notice is impracticable or in cases where the operations of the other
Party will not be affected. The

                                       20
<PAGE>

Processor or Producer requiring such relief shall endeavor to arrange such
interruptions so as to minimize any adverse economic effect on the other Party.

12.      FORCE MAJEURE.

         12.1     PERFORMANCE EXCUSED. If either Processor or any Producer is
rendered unable, wholly or in part by Force Majeure to perform its obligations
under this Agreement, other than the obligation to make payments then due or
thereafter becoming due as a result of performance of an obligation prior to
such Force Majeure, it is agreed that performance of the respective obligations
of Processor and such Producer hereunder, so far as they are affected by such
Force Majeure, shall be suspended from the inception of any such inability until
it is corrected, but for no longer period. The Party claiming such inability
shall give notice thereof to the other Party as soon as reasonably practicable
after the occurrence of the Force Majeure. The Party claiming such inability
shall promptly correct such inability to the extent it may be corrected through
the exercise of reasonable diligence. Neither Party shall be liable to the other
for any losses or damages, regardless of the nature thereof and howsoever
occurring, whether such losses or damages be direct or indirect, immediate or
remote, by reason of, caused by, arising out of, or in any way attributable to
the suspension or performance of any obligation of either Party to the extent
that such suspension occurs because a Party is rendered unable, wholly or in
part, by Force Majeure to perform its obligations.

         12.2     FORCE MAJEURE DEFINED. For purposes of this Agreement, the
term "Force Majeure" shall mean an event, which (i) is not within the reasonable
control of the Party claiming suspension, and which by the exercise of
reasonable diligence such Party is unable to overcome or (ii) acts of God;
strikes, lockouts or other industrial disturbances, acts of the public enemy,
wars, blockades, insurrections, civil disturbances and riots, and epidemics;
landslides, lightning, earthquakes, fires, storms, hurricanes and threats of
hurricanes, floods and washouts; arrests, orders, requests, directives,
restraints and requirements of the government and governmental agencies, either
federal or state, civil or military; explosions, breakage or accident to
machinery, equipment or lines of pipe and outages (shutdowns) of equipment,
machinery or lines of pipe. The term "Force Majeure" shall also include any
event of force majeure occurring with respect to the facilities or services of
either Party's suppliers or customers delivering or receiving any Raw Make,
Products, Slug Liquids, Gas, fuel, or other substance necessary to the
performance of such Party's obligations, and shall also include curtailment or
interruption of deliveries or services by such Third Party suppliers or
customers as a result of an event of force majeure.

13.      AUDIT RIGHTS.

         For a period of two years following any statement or payment hereunder
or such other period of time, if any, as may be prescribed under applicable
COPAS standards, Producers or Processor or any Third Party representative
thereof shall have the right, at its expense, upon reasonable notice and at
reasonable times, to examine the books and records of the other Party hereto, to
the extent reasonably necessary to verify the accuracy of any such statement or
payment under this Agreement. In addition, Processor and Producer shall be
required to retain all records, contracts and files pertaining to royalty
payments for the period of time necessary to

                                       21
<PAGE>

comply with contractual or regulatory obligations to lessors, and the same shall
be made available upon reasonable notice to the other Parties hereunder.

14.      NOTIFICATIONS.

         14.1     ANNUAL INFORMATION. On or before September 1 of each year,
each Producer shall provide to Processor, without warranty as to accuracy, in
reasonable form and substance, Producer's projected volumes and Gas richness
(best available composition data) at each existing and projected Field Delivery
Point by prospect, Upstream Pipeline and year for the following ten year period.
Producers' current "C" volume exploration models or other statistical production
models shall be included but may be reported in aggregate. Such provided
information shall be referred to collectively as, the "ANNUAL INFORMATION".
Producers shall also inform Processor as part of the Annual Information of any
plans to purchase or sell Dedicated Lease(s).

         14.2     NOTICE OF MATERIAL CHANGES TO ANNUAL INFORMATION. Processor
and Producers shall review the Annual Information regularly. Producer shall
advise Processor as soon as reasonably practicable of any changes to the Annual
Information that could materially impact Processor's plans to Process the
projected Equity Gas Volumes.

         14.3     NOTICE OF PROPOSED TRANSFERS OF DEDICATED LEASES. In addition
to notifying Processor as a part of the Annual Information, Producers shall
notify Processor, as soon as reasonably practicable, of, but in any case prior
to, any efforts to sell, exchange, or otherwise assign any Dedicated Lease, and
Processor shall inform the Producer of its intent to reserve or release such
Dedicated Lease from this Agreement.

         14.4     NOTICE OF PENDING TRANSPORTATION AGREEMENTS. Each Producer
shall notify Processor as soon as reasonably practicable of any ongoing or
planned negotiation for the transportation of Equity Gas in an Upstream
Pipeline, in order to facilitate Processor's entering into a Gas Processing
Agreement for such Equity Gas. Processor and Producer agree to enter into such
transportation and Gas Processing contracts contemporaneously, to the extent
reasonably practicable and provided that a Producer shall not be obligated to
delay entry into any transportation contract when such Producer reasonably
believes such delay will result in curtailment of Equity Gas.

         14.5     NOTICE OF SCHEDULED PLANT DOWNTIME. Processor agrees to notify
Producers as soon as reasonably practicable of any scheduled Plant downtime that
could impact Producer's ability to continue to produce Equity Gas.

15.      CONFIDENTIALITY.

         15.1     GENERAL. Neither Producers nor Processor shall disclose the
terms of this Agreement (or the results of any audit pursuant to Article 13) to
a Third Party (other than the employees, lenders, counsel, consultants, or
accountants of a Processor or a Producer who have agreed to keep such terms
confidential) except (i) in order to comply with any applicable law, order,
regulation or exchange rule, (ii) in connection with bona fide negotiations with
a potential Third Party transferee of a Dedicated Lease or (iii) in connection
with bona fide negotiations

                                       22
<PAGE>

involving the acquisition or construction of Plant capacity or negotiations on
contracts for Third Party Gas Processing agreements. Each Party shall notify the
other Party of any proceeding of which it is aware which may result in
disclosure and use reasonable efforts to prevent or limit the disclosure. Such
confidentiality obligations shall terminate two years after the Termination
Date.

         15.2     ANNUAL INFORMATION. Processor hereby agrees to maintain Annual
Information as confidential and agrees to disclose Annual Information only (i)
to employees, lenders, counsel, consultants, or accountants of Processor or an
Affiliate of Processor, who need to know and agree to maintain the
confidentiality of such Annual Information, and (ii) to the extent necessary to
comply with any applicable law, order, regulation or exchange rule. Processor
shall notify the applicable Producers of any proceeding of which it is aware
which may result in disclosure and use reasonable efforts to prevent or limit
the disclosure. Such confidentiality obligations shall terminate two years after
the Termination Date.

16.      DISPUTE RESOLUTION.

         16.1     ARBITRATION. Producers and Processor hereby agree that any
claim, controversy or dispute arising among the Parties or their successors in
interest or between any of them relating to this Agreement, or any of their
respective rights, duties or obligations under or in connection with this
Agreement (a "DISPUTE"), if not resolved by the Parties in the ordinary course
of business or under the procedures set forth in Sections 16.2 and 16.3, shall
with reasonable promptness be submitted to and determined by binding arbitration
in Houston, Texas in accordance with the commercial arbitration rules of the
American Arbitration Association ("AAA") then in effect; and judgment upon any
arbitration award rendered pursuant to and in accordance with the arbitration
provisions of Section 16.4 may be entered in any court having jurisdiction over
such arbitration proceeding and over Producers and Processor; and any such Party
may institute proceedings in any court having jurisdiction for the specific
performance by any Party of any such arbitration award. Each of the Parties
specifically agrees to be bound by any arbitration award or determination made
in any such arbitration proceeding. This Section 16 will be the sole and
exclusive procedure for the resolution of any Dispute, except that any Party,
without prejudice to the following procedures, may file a complaint to seek
preliminary injunctive or other provisional judicial relief in a court of
competent jurisdiction, if in its sole judgment, that action is necessary to
avoid irreparable damage or to preserve the status quo; provided, however, that
any such provisional relief granted shall be vacated or extended upon and in
accordance with any determination of the arbitrators with respect thereto.

         16.2     INITIATION OF PROCEDURES. Any Party wishing to initiate the
dispute resolution procedures set forth in this Section 16 with respect to a
Dispute not resolved in the ordinary course of business must give written notice
of the Dispute to the other Parties ("DISPUTE NOTICE"). The Dispute Notice must
include (1) a statement of that Party's position and a summary of arguments
supporting that position, and (2) the name and title of (a) the executive
responsible for administering this Agreement or the matter in Dispute and who
will represent that Party and (b) any other person who will accompany the
executive in the negotiations under Section 16.3. Within 15 days after delivery
of the Dispute Notice, the receiving Parties will submit to the other a written
response. The response will include (1) a statement of that Party's position and
a summary of arguments supporting that position, and (2) the name and title of
(x)

                                       23
<PAGE>

the executive who will represent that Party and (y) any other person who
will accompany the executive in the negotiations conducted under Section 16.3.

         16.3     NEGOTIATION BETWEEN EXECUTIVES. If any Party has given a
Dispute Notice under Section 16.2, the Parties will attempt in good faith to
resolve the Dispute within 30 days after the receipt of the written response to
the Dispute Notice by negotiations between executives identified in Section
16.2. During the 30 days following the receipt of the written response to the
Dispute Notice, the executives (identified in Section 16.2) will meet no less
than eight hours a day and exhaustively negotiate in good faith and at the
expense of all other responsibilities.

         16.4     BINDING ARBITRATION. At the end of the 30-day period provided
in Section 16.3, if the executives have been unable to resolve the Dispute, and
if a disputing Party wishes to submit the Dispute to binding arbitration, the
disputing Party shall provide to the other disputing Party three business days'
prior written notice of such disputing Party's intention to submit the Dispute
to binding arbitration. The other disputing Party shall be entitled to join in
the submission of the Dispute to binding arbitration in accordance with the
commercial arbitration rules of the AAA (expedited procedures). The AAA shall be
instructed to choose an arbitrator who shall have a minimum of 15 years
experience in the oil and gas processing industry, or such other experience such
that he or she is considered an expert on the business of the Processor. Notice
of a disputing Party's submission of the matter for arbitration shall be given
to the other Party or Parties within three business days thereafter (the
"ARBITRATION NOTICE"). Upon delivery of the Arbitration Notice by the disputing
Party, each disputing Party shall have 30 days to provide the arbitrator (and
the disputing Party) with a statement of its position (with supporting
documentation) regarding the matter or matters in dispute together with its best
and final offer for settlement of the Dispute. The failure to provide a
statement of position within this period shall constitute a waiver of a
disputing Party's right to have such materials considered by the arbitrator. The
arbitrator shall consider the statements of position submitted by the disputing
Parties and shall, within 30 business days after receipt of such materials,
issue his or her decision in writing picking one of the statements of position
submitted by the disputing Parties as the position to be adopted to settle the
Dispute. All determinations made by the arbitrator shall be final, conclusive
and binding on the disputing Parties. Each of the disputing Parties will pay
one-half of the fees of the arbitrator and all other arbitration fees and
expenses and the fees of their respective arbitrators (if required).

17.      TRANSFER AND ASSIGNMENT.

         17.1     SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
Producers and Processor. Except for an assignment by Processor in connection
with a mortgage of its assets, a disposition of its assets by merger,
reorganization or consolidation, sale of all or a substantial part of its
assets, or transfer of its assets to an Affiliate, this Agreement shall not be
assignable by Processor except with the prior written consent of the affected
Producer, which consent shall not be unreasonably withheld or delayed. Except
for an assignment by a Producer in connection with a mortgage of its assets, a
disposition of its assets by merger, reorganization or consolidation, sale of
all or a substantial part of its Leases, or transfer of one or more of its
Leases to an Affiliate, this Agreement shall not be assignable by a Producer
except with the prior written consent of Processor, which consent shall not be
unreasonably withheld or delayed.

                                       24
<PAGE>

         17.2     PROCESSOR'S RIGHTS UNDER LEASES. Subject to Section 17.4,
Producers hereby agree that it is their intent that, to the extent permitted by
law, this Agreement constitutes a conveyance by Producers of a portion of their
rights as lessee under the Dedicated Leases and that this Agreement shall bind
all persons that now or at any time hereafter have any right as lessee or
otherwise under any Dedicated Leases, whether by voluntary transfer, involuntary
transfer, or otherwise of Leases; provided, however, that nothing in this
Section 17.2 or any other provision of this Agreement shall require, or be
deemed to require, Processor to pay, or be responsible for, any Royalty Charges,
it being the intent of the Parties to this Agreement that Producers shall pay,
and be responsible for, any and all Royalty Charges, as provided in Section 8.1.
Producers further agree (i) to make any transfer of any Dedicated Lease subject
to the terms and conditions of this Agreement and (ii) not to transfer
Producer's interest in a Dedicated Lease without first requiring the transferee
to execute and deliver to Producer and Processor a Letter of Attornment in the
form attached hereto as Exhibit E.

         17.3     AFFILIATES OF PRODUCER PARTIES. Subject to Section 17.4, it is
the intention of the Parties that this Agreement shall bind not only the
Producers who are made a Party to this Agreement but also their respective
Affiliates, successors and assigns. Each Producer covenants and agrees to
exercise its best efforts to have each of its Affiliates, successors and assigns
that acquires an interest in a Lease become and be made a Party to this
Agreement and to perform its obligations hereunder.

         17.4     EXCEPTED LEASES. As to any Dedicated Leases, or portions
thereof, or interests therein that were transferred or assigned by Producers to
Third Parties during the period of January 1, 1998 through the Effective Date,
inclusive, that were not made subject to the Conveyance as a condition of any
such transfer or assignment ("EXCEPTED LEASES"), Processor waives the
application of the Conveyance as to the Excepted Leases, and the Parties agree
that this Agreement shall not apply to the Excepted Leases unless and until an
Excepted Lease is subsequently reacquired by a Producer.

18.      MISCELLANEOUS.

         18.1     TITLE AND CAPTIONS. All section titles or captions in this
Agreement are for convenience of reference only. They are not intended to be
part of this Agreement or to in any way define, limit, extend, or describe the
scope or intent of any provisions of this Agreement. Except as specifically
provided otherwise, reference to "Sections" and "Exhibits" are to Articles and
Sections of and Exhibits to this Agreement.

         18.2     PRONOUNS AND PLURALS. Whenever the context so requires, any
pronoun used in this Agreement includes the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs includes the
plural and vice versa.

         18.3     SEPARABILITY. Each provision of this Agreement shall be
considered to be separable and, if, for any reason, any such provision, is
determined to be in whole or part invalid and contrary to any existing or future
applicable law, such invalidity shall not impair the operation of or affect
those portions of this Agreement that are valid, and this Agreement shall be

                                       25
<PAGE>

construed and enforced in all respects as if the invalid or unenforceable
provision had been omitted.

         18.4     SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and assigns but this
provision shall not be deemed to permit any assignment by a Party of any of its
rights or obligations under this Agreement except as expressly provided herein.

         18.5     FURTHER ACTIONS. Each Party agrees to execute and deliver such
further instruments and do such further acts and things as may be required or
useful to carry out or further evidence the intent and purpose of this Agreement
and which are not inconsistent with its terms.

         18.6     NOTICES. All notices or other communications hereunder must be
in writing and must be delivered either personally or by (i) facsimile means
(delivered during the recipient's regular business hours), (ii) registered or
certified mail (postage prepaid and return receipt requested), or (iii) express
courier or delivery service, addressed as follows:

<TABLE>
<S>          <C>                                  <C>        <C>
Producers:   [Producer]                           Processor: Enterprise Gas Processing, LLC
              --------                                       2727 North Loop West - 7th Floor
             c/o Shell Offshore, Inc.                        Houston, TX  77008
             200 N. Dairy Ashford                            Fax #: (713) 880-6570
             Houston, TX 77079                               Attn: President
             Fax #: (281) 544-3544
             Attn: Manager
                   Marketing & Transportation
</TABLE>

or at such other address and number as any Party shall have previously
designated by notice given to the other Parties in the manner provided in this
Section. Notices shall be deemed given when received during normal business
hours if sent by facsimile means (confirmation of such receipt by confirmed
facsimile transmission being deemed receipt of communications sent by facsimile
means), and when delivered and receipted for (or upon the date of attempted
delivery where delivery is refused), if hand-delivered, sent by express courier
or delivery service, or sent by certified or registered mail.

         18.7     AMENDMENT ONLY IN WRITING. No amendment, waiver, modification
or change of this Agreement shall be enforceable unless in writing signed by the
Party against whom enforcement is sought.

         18.8     RIGHT OF INGRESS AND EGRESS. To the extent Producers are able
to grant such rights, Processor shall have the right of ingress and egress to
and from the premises of Producers and to and from the Field Delivery Points for
all purposes necessary for the fulfillment of this Agreement.

         18.9     NO SPECIAL DAMAGES. No Party shall be liable for any
consequential, incidental, punitive, exemplary, or indirect damages in tort,
contract, under any indemnity provision or otherwise.

                                       26
<PAGE>

         18.10    APPLICABLE LAW. This Agreement shall be governed by, and
construed, interpreted and enforced in accordance with, the substantive law of
the state of Louisiana without regard to principles of conflicts of laws.

         18.11    ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between Producers and Processor and supersedes all prior
agreements and understandings relating to the subject matter hereof.

         18.12    COUNTERPARTS. This Agreement may be executed in one or more
counterparts and each of such counterparts, for all purposes, shall be deemed to
be an original, but all of such counterparts together shall constitute but one
and the same instrument, binding upon all Parties, notwithstanding that all of
the Parties may not have executed the same counterpart.

         IN WITNESS WHEREOF, the Parties hereto, by their duly authorized
representatives have executed this Agreement effective as of the Effective Date.

PRODUCERS:

SHELL OIL COMPANY                                  WITNESSES:

By:    /s/ B. K. Garrison                          M. J. Roedel
       ------------------------------              -----------------------------
Name:  B. K. Garrison                              Dave Harris
Title: Attorney-in-Fact                            -----------------------------

SHELL OFFSHORE INC.                                WITNESSES:

By:    /s/ J. W. Kimmel                            M. J. Roedel
       ------------------------------              -----------------------------
Name:  J. W. Kimmel                                Dave Harris
Title: Attorney-in-Fact                            -----------------------------

SHELL CONSOLIDATED ENERGY                          WITNESSES:
RESOURCES INC.

By:    /s/ J. W. Kimmel                            M. J. Roedel
       ------------------------------              -----------------------------
Name:  J. W. Kimmel                                Dave Harris
Title: Attorney-in-Fact                            -----------------------------

                                       27
<PAGE>

SHELL LAND & ENERGY COMPANY                        WITNESSES:

By:    /s/ J. W. Kimmel                            M. J. Roedel
       ------------------------------              -----------------------------
Name:  J. W. Kimmel                                Dave Harris
Title: Attorney-in-Fact                            -----------------------------

                                       28

<PAGE>

SHELL FRONTIER OIL & GAS INC.             WITNESSES:

By:    /s/ J. W. Kimmel                   M.J. Roedel
       ------------------------------     ---------------------------------
Name:  J. W. Kimmel                       Dave Harris
Title: Attorney-in-Fact                   ---------------------------------

SHELL EXPLORATION &                       WITNESSES:
PRODUCTION COMPANY

By:    /s/ W. T. Mooney                   M.J. Roedel
       ------------------------------     ---------------------------------
Name:  W. T. Mooney                       Dave Harris
Title: Vice President - Tax               ---------------------------------

SHELL GULF OF MEXICO INC.                 WITNESSES:

By:    /s/ J. W. Kimmel                   M.J. Roedel
       ------------------------------     ---------------------------------
Name:  J. W. Kimmel                       Dave Harris
Title: Attorney-in-Fact                   ---------------------------------

PROCESSOR:

ENTERPRISE GAS PROCESSING, LLC            WITNESSES:

By:    /s/ W. Ordemann                    M.J. Roedel
       ------------------------------     ---------------------------------
Name:  W. Ordemann                        Dave Harris
Title: Senior Vice President              ---------------------------------

                                       29
<PAGE>

STATE OF TEXAS
COUNTY OF HARRIS

BEFORE ME, the undersigned Notary Public, on this day personally appeared B. K.
Garrison, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he, being fully authorized to do so,
executed and delivered the same as Attorney-in-Fact for Shell Oil Company, a
Delaware corporation, on the day and year therein mentioned and as the act and
deed of said corporation, for the purpose and consideration therein expressed.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 2nd day of April, 2004.

                                            /s/ Gayle Kacal
                                            -------------------------------
                                            Notary Public

My Commission Expires: June 14, 2007.

STATE OF TEXAS
COUNTY OF HARRIS

BEFORE ME, the undersigned Notary Public, on this day personally appeared J. W.
Kimmel, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he, being fully authorized to do so,
executed and delivered the same as Attorney-in-Fact for Shell Offshore Inc., a
Delaware corporation, on the day and year therein mentioned and as the act and
deed of said corporation, for the purpose and consideration therein expressed.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 4th day of April, 2004.

                                            /s/ Maria Cristina Charles
                                            -------------------------------
                                            Notary Public

My Commission Expires: April 4, 2008.

                                       30
<PAGE>

STATE OF TEXAS
COUNTY OF HARRIS

BEFORE ME, the undersigned Notary Public, on this day personally appeared J. W.
Kimmel, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he, being fully authorized to do so,
executed and delivered the same as Attorney-in-Fact for Shell Consolidated
Energy Resources Inc., a Delaware corporation, on the day and year therein
mentioned and as the act and deed of said corporation, for the purpose and
consideration therein expressed.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 4th day of April, 2004.

                                            /s/ Maria Cristina Charles
                                            --------------------------------
                                            Notary Public

My Commission Expires: April 4, 2008.

STATE OF TEXAS
COUNTY OF HARRIS

BEFORE ME, the undersigned Notary Public, on this day personally appeared J. W.
Kimmel, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he, being fully authorized to do so,
executed and delivered the same as Attorney-in-Fact for Shell Land & Energy
Company, a Delaware corporation, on the day and year therein mentioned and as
the act and deed of said corporation, for the purpose and consideration therein
expressed.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 4th day of April, 2004.

                                            /s/ Maria Cristina Charles
                                            --------------------------------
                                            Notary Public

My Commission Expires: April 4, 2008.

                                       31
<PAGE>

STATE OF TEXAS
COUNTY OF HARRIS

BEFORE ME, the undersigned Notary Public, on this day personally appeared J. W.
Kimmel, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he, being fully authorized to do so,
executed and delivered the same as Attorney-in-Fact for Shell Frontier Oil & Gas
Inc., a Delaware corporation, on the day and year therein mentioned and as the
act and deed of said corporation, for the purpose and consideration therein
expressed.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 5th day of April, 2004.

                                            /s/ Maria Cristina Charles
                                            --------------------------------
                                            Notary Public

My Commission Expires: April 4, 2008.

STATE OF TEXAS
COUNTY OF HARRIS

BEFORE ME, the undersigned Notary Public, on this day personally appeared W. T.
Mooney, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he, being fully authorized to do so,
executed and delivered the same as Vice President, Tax of Shell Exploration &
Production Company, a Delaware corporation, on the day and year therein
mentioned and as the act and deed of said corporation, for the purpose and
consideration therein expressed.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 5th day of April, 2004.

                                            /s/ Maria Cristina Charles
                                            --------------------------------
                                            Notary Public

My Commission Expires: April 4, 2008.

                                       32
<PAGE>

STATE OF TEXAS
COUNTY OF HARRIS

BEFORE ME, the undersigned Notary Public, on this day personally appeared J. W.
Kimmel, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he, being fully authorized to do so,
executed and delivered the same as Attorney-in-Fact for Shell Gulf of Mexico
Inc., a Delaware corporation, on the day and year therein mentioned and as the
act and deed of said corporation, for the purpose and consideration therein
expressed.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 4th day of April, 2004.

                                            /s/ Maria Cristina Charles
                                            --------------------------------
                                            Notary Public

My Commission Expires: April 4, 2008.

STATE OF TEXAS
COUNTY OF HARRIS

BEFORE ME, the undersigned Notary Public, on this day personally appeared W.
Ordemann, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he, being fully authorized to do so,
executed and delivered the same as a Senior Vice President of Enterprise Gas
Processing, LLC, a Delaware limited liability company, on the day and year
therein mentioned and as the act and deed of said corporation, for the purpose
and consideration therein expressed.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 5th day of April, 2004.

                                            /s/ Maria Cristina Charles
                                            --------------------------------
                                            Notary Public

My Commission Expires: April 4, 2008.

                                       33
<PAGE>

                                    EXHIBIT A
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                      DEDICATED LEASES AS OF AUGUST 1, 1999
                                 FEDERAL LEASES

<TABLE>
<CAPTION>
                                                                  LEASE
AREA      BLOCK      LEASE #      CURRENT LEASE OPERATOR           DATE         SPUD DATE
-----------------------------------------------------------------------------------------
<S>       <C>        <C>         <C>                             <C>            <C>
 AC        0556       11607      Shell Deepwater Dev             10/01/89
           0557        8272      Shell Deepwater Dev             10/01/85
           0558        9263      Shell Deepwater Dev             10/01/87
 AC        0600        8580      Shell Deepwater Dev             10/01/86       04/15/96
 AC        0601        8581      Shell Deepwater Dev             10/01/86
 AC        0602        9266      Shell Deepwater Dev             10/01/87
 AC        0644       11609      Shell Deepwater Dev             10/01/89
 AC        0645        9268      Shell Deepwater Dev             10/01/87
 AC        0646       11610      Shell Deepwater Dev             10/01/89
 BA        0505       15724      IP Pet                          11/01/95       03/04/97
 BA        0577       17111      IP Pet                          01/01/97       08/12/97
 BA       A0019        3936      Shell Offshore                  03/01/79       11/26/79
 BA       A0020        3472      Shell Offshore                  08/01/77       05/23/94
 BA       A0023        3938      Shell Offshore                  03/01/79       07/19/79
 EC        0060        5359      Shell Offshore                  07/01/83       03/30/93
 EC        0126       15139      Shell Offshore                  07/01/95       08/04/98
 EC        0187       15142      Shell Offshore                  07/01/95       07/23/97
 EC        0276       12845      Walter O&G                      07/01/91       04/27/96
 EC        0287       16268      Newfield Exp                    06/01/96       10/20/97
 EI        0097       17964      Shell Offshore                  07/01/97       01/31/99
 EI        0136        3152      Shell Offshore                  07/01/75       09/04/97
 EI        0152       15244      Shell Offshore                  07/01/95       02/26/96
 EI        0157       11951      Shell Offshore                  05/01/90       07/05/94
 EI        0158        1220      Shell Offshore                  06/01/62       07/12/62
 EI        0176         445      Shell Offshore                  01/01/55       09/18/68
 EI        0183       17981      Elf Exp                         08/01/97       05/31/98
 EI        0184        5498      Elf Exp                         07/01/83       02/12/88
 EI        0331        2116      Shell Offshore                  01/01/71       02/10/71
 EW        0833       18167      Shell Offshore                  07/01/97
 EW        0834       18168      Shell Offshore                  07/01/97       07/11/98
 GA        0180        3228      Shell Offshore                  09/01/75       01/16/78
 GA        0213       17120      Basin Exp                       02/01/97       01/19/98
 GB        0083       11450      Shell Offshore                  12/01/89       03/02/90
 GB        0084       11451      Shell Offshore                  12/01/89       07/04/91
 GB        0127       11454      Shell Offshore                  12/01/89       01/28/95
 GB        0128       11455      Shell Offshore                  12/01/89       03/16/94
 GB        0168       15846      Shell Offshore                  11/01/95       01/05/99
 GB        0172       14221      Shell Offshore                  01/01/94       02/03/95
 GB        0215        9216      Amerada Hess                    10/01/87       03/23/88
 GB        0248       13815      Shell Deepwater Dev             10/01/92       10/04/97
 GB        0254       13816      Chevron USA                     12/01/92       06/15/93
 GB        0336       15877      Shell Deepwater Dev             11/01/95       07/31/96
 GB        0341       15879      Shell Deepwater Dev             02/01/96       12/01/98
 GB        0426        8241      Shell Deepwater Prod            10/01/85       05/09/88
 GB        0427        7493      Shell Deepwater Prod            09/01/84       06/03/87
 GB        0451       15898      Shell Deepwater Dev             11/01/95       01/23/98
 GB        0452       15899      Shell Deepwater Dev             11/01/95
 GB        0470        8248      Shell Deepwater Prod            10/01/85       07/08/87
 GB        0471        7498      Shell Deepwater Prod            09/01/84       02/23/87
 GB        0472       11528      Shell Deepwater Dev             10/01/89       07/13/99
</TABLE>

                                  Page 1 of 4

<PAGE>

                                    EXHIBIT A
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                      DEDICATED LEASES AS OF AUGUST 1, 1999
                                 FEDERAL LEASES

<TABLE>
<S>      <C>         <C>        <C>                             <C>            <C>
GB        0515       20792      Marathon Oil                    01/01/99       06/04/99
GB        0516        8252      Shell Deepwater Dev             10/01/85       09/21/95
GB        0559       11546      Shell Deepwater Dev             10/01/89       02/08/99
GB        0602       11553      Shell Deepwater Dev             10/01/89       09/13/95
GB        0919       11591      Shell Deepwater Dev             10/01/89
GB        0920       11592      Shell Deepwater Dev             10/01/89       06/07/99
GB        0963       11597      Shell Deepwater Dev             10/01/89
GB        0964       11598      Shell Deepwater Dev             10/01/89
GC        0019        4131      Shell Offshore                  10/01/79       02/09/80
GC        0065        5889      Shell Offshore                  07/01/83       08/04/83
GC        0069       13159      Shell Deepwater Dev             05/01/91       02/23/98
GC        0073        5897      Shell Deepwater Prod            07/01/83       05/26/85
GC        0108       14668      Shell Offshore                  07/01/94
GC        0109        5900      Shell Offshore                  07/01/83       06/02/84
GC        0110       14023      Shell Offshore                  07/01/93       04/09/95
GC        0112       15545      Shell Deepwater Dev             07/01/95       03/29/97
GC        0113       15546      Shell Deepwater Dev             09/01/95       08/08/97
GC        0116        5904      Shell Deepwater Prod            07/01/83       11/14/84
GC        0117        5905      Shell Deepwater Prod            07/01/83       07/15/85
GC        0155       16698      Shell Deepwater Dev             09/01/96       04/28/98
GC        0158        7995      Shell Deepwater Dev             07/01/85       12/23/88
GC        0177       16702      Spinnaker Exp                   09/01/96       07/08/99
GC        0200       12209      BP Exp & Oil                    05/01/90       03/16/97
GC        0201       12210      BP Exp & Oil                    05/01/90
GC        0202        7998      Shell Deepwater Dev             07/01/85       09/29/97
GC        0244       11043      BP Exp & Oil                    05/01/89       02/14/94
GC        0245        5916      BP Exp & Oil                    07/01/83       08/08/95
GC        0247       15564      Shell Deepwater Dev             09/01/95
GC        0248       15565      Shell Deepwater Dev             09/01/95       02/21/96
GC        0472        5097      Shell Deepwater Dev             04/01/82       12/08/88
GC        0473        5922      Shell Deepwater Dev             07/01/83       09/17/91
GC        0517        5923      Shell Deepwater Dev             07/01/83
GC        0644       11080      BP Exp & Oil                    05/01/89       12/20/98
GC        0645       11081      BP Exp & Oil                    05/01/89
GI        0110       13943      Anadarko Pet                    08/01/93       11/15/98
GI        0111       18069      Anadarko Pet                    07/01/97
GI        0116       13944      Anadarko Pet                    07/01/93       04/16/98
HI        0035       15768      IP Pet                          12/01/95       08/31/96
HI        0037       15769      IP Pet                          12/01/95       06/28/96
HI        0068       15771      IP Pet                          11/01/95       01/09/97
HI        0108       15776      IP Pet                          11/01/95       05/31/96
HI        0119       14882      Shell Offshore                  10/01/94       07/08/96
HI        0135         741      Shell Offshore                  05/01/60       03/21/64
HI        0136         742      Shell Offshore                  05/01/60       05/17/64
HI        0161         744      Shell Offshore                  05/01/60       06/26/61
HI        0179        3236      Shell Offshore                  09/01/75       02/14/76
HI        0194        6166      Shell Offshore                  10/01/83       06/16/84
HI        0201        4576      Shell Offshore                  01/01/81       06/19/82
HI       A0006        4734      Shell Offshore                  09/01/81       04/04/93
HI       A0350        2428      Shell Offshore                  08/01/73       08/15/73
MC        0108        9777      BP Exp & Oil                    07/01/88       04/02/89
MC        0110       18192      Shell Offshore                  08/01/97       03/12/98
MC        0119       14629      Shell Deepwater Dev             05/01/94       05/12/99
MC        0151        2643      Shell Offshore                  05/01/74       07/27/75
MC        0194        2638      Shell Offshore                  05/01/74       06/28/75
MC        0195        2639      Shell Offshore                  05/01/74       01/22/76
</TABLE>

                                  Page 2 of 4

<PAGE>

                                    EXHIBIT A
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                      DEDICATED LEASES AS OF AUGUST 1, 1999
                                 FEDERAL LEASES

<TABLE>
<S>       <C>        <C>        <C>                             <C>            <C>
MC        0311        2968      Shell Offshore                  12/01/74       12/21/74
MC        0383        7937      Shell Deepwater Dev             08/01/85       06/27/87
MC        0385        7938      Shell Deepwater Dev             07/01/85
MC        0429        7944      Shell Deepwater Dev             07/01/85       11/08/95
MC        0430        9808      Shell Deepwater Dev             05/01/88
MC        0496       14005      Shell Deepwater Dev             07/01/93       07/03/98
MC        0520        9821      Amoco Prod                      05/01/88       10/30/96
MC        0521        8822      Amoco Prod                      06/01/87
MC        0522        8823      Amoco Prod                      06/01/87       04/27/89
MC        0565       11002      Amoco Prod                      05/01/89
MC        0566        8831      Amoco Prod                      06/01/87
MC        0584       14010      Union Pacific Res               08/01/93       12/16/97
MC        0607        9837      Amoco Prod                      05/01/88       09/20/97
MC        0608        9838      Amoco Prod                      05/01/88
MC        0657        8496      Shell Deepwater Dev             06/01/86       11/07/87
MC        0686        5862      Shell Deepwater Prod            07/01/83       09/10/96
MC        0687        5863      Shell Deepwater Prod            07/01/83       12/19/95
MC        0730        7954      Shell Deepwater Prod            07/01/85       06/10/88
MC        0731        7955      Shell Deepwater Prod            07/01/85       11/20/86
MC        0762        7957      Shell Offshore                  07/01/85
MC        0763        7958      Shell Offshore                  07/01/85       01/13/89
MC        0764        8852      Shell Deepwater Dev             06/01/87       07/23/88
MC        0806        7962      Shell Deepwater Prod            07/01/85       04/10/91
MC        0807        7963      Shell Deepwater Prod            07/01/85       07/26/89
MC        0809        5868      Shell Deepwater Dev             07/01/83       07/19/93
MC        0810        9873      Shell Deepwater Dev             05/01/88       03/01/95
MC        0850        9881      Shell Deepwater Dev             05/01/88
MC        0851        9882      Shell Deepwater Dev             05/01/88
MC        0852        5870      Shell Deepwater Dev             07/01/83       12/07/83
MC        0853        5871      Shell Deepwater Dev             07/01/83
MC        0854        9883      Shell Deepwater Dev             05/01/88       07/10/90
MC        0890        7969      Shell Deepwater Dev             07/01/85       10/29/98
MC        0891        9889      Shell Deepwater Dev             05/01/88
MC        0898        9895      BP Exp & Oil                    05/01/88
MC        0899        9896      BP Exp & Oil                    05/01/88       01/25/91
MC        0911        9899      BP Exp & Oil                    05/01/88       08/03/97
MC        0912        9900      BP Exp & Oil                    05/01/88
MC        0934        7975      Shell Deepwater Dev             07/01/85       12/22/94
MC        0935        7976      Shell Deepwater Dev             07/01/85       01/28/94
MC        0942        9904      Shell Deepwater Dev             05/01/88       09/23/98
MC        0955        8862      Shell Deepwater Dev             06/01/87
MC        0956        8863      Shell Deepwater Dev             06/01/87
MC        0999        8866      Shell Deepwater Dev             06/01/87
MC        1000        8867      Shell Deepwater Dev             06/01/87
MO        0821        5058      Shell Offshore                  04/01/82       10/16/85
MP        0251        7823      Shell Deepwater Prod            08/01/85       11/16/86
MP        0252        7824      Shell Deepwater Prod            08/01/85       11/13/85
MP        0309        8760      Shell Offshore                  06/01/87       06/21/89
MP        0310        4126      Shell Offshore                  10/01/79       05/19/80
MP        0312       16520      Shell Offshore                  07/01/96       01/20/97
MP        0315        8467      Shell Offshore                  07/01/86       10/16/86
PN        0969        5953      Shell Offshore                  10/01/83       02/04/84
PN        0975       20603      Shell Offshore                  10/01/98       12/09/98
PN        0976        5954      Shell Offshore                  10/01/83       04/09/90
SA        0010        3958      Shell Offshore                  03/01/79       03/30/79
SA        0012       14590      IP Pet                          07/01/94       10/02/82
</TABLE>

                                  Page 3 of 4

<PAGE>

                                    EXHIBIT A
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                      DEDICATED LEASES AS OF AUGUST 1, 1999
                                 FEDERAL LEASES

<TABLE>
<S>       <C>        <C>        <C>                             <C>            <C>
SM        0130        2280      Shell Offshore                  02/01/73       04/05/73
SM        0131        2281      Shell Offshore                  01/01/73       02/21/73
SS        0076       15276      Mobil E&P SE                    08/01/95       11/04/95
SS        0201        5557      L L & E                         07/01/83       11/24/90
SS        0258        5560      Shell Frontier O&G              07/01/83       01/18/86
SS        0259        5044      Shell Frontier O&G              04/01/82       08/21/82
ST        0211       16435      IP Pet                          07/01/96
ST        0300        4240      Shell Offshore                  12/01/79       07/10/81
ST        0301        3594      Shell Offshore                  08/01/77       02/08/78
ST        0302        6779      Shell Offshore                  06/01/84       12/16/84
SX        0017        4143      Shell Offshore                  10/01/79       02/22/81
SX        0040        4745      Shell Offshore                  09/01/81       10/28/86
VK        0736       13987      Shell Offshore                  07/01/93       09/23/98
VK        0780        6884      Shell Offshore                  06/01/84       02/04/86
VK        0783        6886      Shell Deepwater Prod            06/01/84       11/02/84
VK        0784       13060      Shell Deepwater Prod            07/01/91       02/10/96
VK        0824       15436      Shell Offshore                  09/01/95       06/09/98
VK        0827        7910      Shell Deepwater Prod            09/01/85       09/14/98
VK        0867        6889      Amoco Prod                      07/01/84
VK        0871        8469      Amoco Prod                      06/01/86       05/26/94
VK        0872       19907      Shell Deepwater Dev             08/01/98       11/20/98
VK        0873       19908      Shell Deepwater Dev             08/01/98       12/15/98
VK        0911        6892      Shell Deepwater Prod            07/01/84       08/27/98
VK        0912        6893      Shell Deepwater Prod            07/01/84       03/01/85
VK        0915        6894      Amoco Prod                      06/01/84       04/14/93
VR        0161        1127      Samedan                         06/01/62       01/01/63
VR        0195       19760      Shell Offshore                  08/01/98
VR        0196       19760      Shell Offshore                  08/01/98       01/01/63
VR        0207       19760      Shell Offshore                  08/01/98
VR        0260       15197      Shell Offshore                  07/01/95       12/04/95
VR        0308       11892      Newfield Exp                    05/01/90       10/25/94
VR        0355       12876      Shell Offshore                  07/01/91       02/14/92
WC        0094       15054      IP Pet                          07/01/95       10/26/96
WC        0170        4085      CXY Energy Off                  10/01/79       06/25/80
WC        0182       15062      Seneca Res                      08/01/95       10/22/96
WC        0195       16123      IP Pet                          06/01/96       05/09/97
WC        0266       13838      Shell Offshore                  08/01/93       11/01/96
WC        0269       13563      Shell Offshore                  08/01/92       06/22/95
WC        0270       15073      Shell Offshore                  07/01/95       06/24/96
WC        0311       15079      IP Pet                          07/01/95       04/27/96
WC        0505       16200      LLOG Exp Off                    06/01/96       10/04/98
WC        0565        2015      Shell Offshore                  02/01/71       01/06/72
WC        0633        2238      Shell Offshore                  01/01/73       01/22/73
WD        0034        3414      Forcenergy                      01/01/77       01/30/77
</TABLE>

                                  Page 4 of 4

<PAGE>

                                    EXHIBIT A
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                      DEDICATED LEASES AS OF AUGUST 1, 1999
                          LEASES WITH OPERATING RIGHTS

<TABLE>
<CAPTION>
                                        CURRENT
                                         LEASE
AREA    BLOCK    LEASE #     LEASE      OPERATOR    LEASE DATE       Description of Operating Rights
-------------------------------------------------------------------------------------------------------
<S>     <C>      <C>         <C>       <C>          <C>            <C>
 EI      0088     10721      G10721    Burlington    07/01/89      N1/2; SE1/4; E1/2SW1/4; NW1/4SW1/4;
                                                                   E1/2SW1/4SW1/4, limited from the
                                                                   surface to a depth of 25,000'
                                                                   subsea; and W1/2SW1/4SW1/4, limited
                                                                   from a depth of 8,200' subsea to a
                                                                   depth of 25,000' subsea.

 EI      0089       044      G00044    Burlington    08/28/45      N1/2; SW1/4; W1/2SE1/4;
                                                                   W1/2E1/2SE1/4; NE1/4NE1/4SE1/4;
                                                                   SE1/4SE1/4SE1/4, Block 89, Eugene
                                                                   Island Area, limited from the
                                                                   surface to a depth of 25,000'
                                                                   subsea; and the SE1/4NE1/4SE1/4;
                                                                   NE1/4SE1/4SE1/4, limited from a
                                                                   depth of 8,200' subsea to a depth
                                                                   of 25,000' subsea.

 EI      0090       229      G00229    Burlington    11/19/48      SE1/4 of Block 90, Eugene Island
                                                                   Area, INSOFAR AND ONLY INSOFAR AS
                                                                   lease covers the following:
                                                                   NE1/4SE1/4; W1/2SE1/4;
                                                                   W1/2SE1/4SE1/4, limited from the
                                                                   surface to a depth of 25,000'
                                                                   subsea; and the E1/2SE1/4SE1/4,
                                                                   limited from a depth of 10,800'
                                                                   subsea to a depth of 25,000' subsea.

 EI      0093       228      G00228    Burlington    11/19/48      E1/2 of Block 93, Eugene Island
                                                                   Area, INSOFAR AND ONLY INSOFAR AS
                                                                   said lease covers the following:
                                                                   W1/2E1/2NE1/4; W1/2NE1/4; SE1/4,
                                                                   limited from the surface to a depth
                                                                   of 25,000' subsea; and the
                                                                   E1/2E1/2NE1/4, limited from a depth
                                                                   of 25,000' subsea.

 EI      0094      5488      G05488    Burlington    07/01/83      N1/2; SE1/4; N1/2SW1/4;
                                                                   N1/2S1/2SW1/4; S1/2SE1/4SW1/4;
                                                                   E1/4SW1/4SW1/4, limited from the
                                                                   surface to a depth of 25,000'
                                                                   subsea; and the SW1/4SW1/4SW1/4,
                                                                   limited from a depth of 10,800'
                                                                   subsea; to a depth of 25,000'
                                                                   subsea.

 EI      0095       046      G00046    Burlington    08/28/45      E1/2; E1/2W1/2; SW1/4SW1/4;
                                                                   S1/2NW1/4SW1/4; NW1/4NW1/4SW1/4;
                                                                   SW1/4NW1/4NW1/4; W1/2SW1/4NW1/4;
                                                                   Block 95, Eugene Island Area,
                                                                   limited from the surface to a depth
                                                                   of 25,000' subsea ; and the
                                                                   N1/2NW1/4NW1/4; SE1/4NW1/4NW1/4;
                                                                   E1/2SW1/4NW1/4; NE1/4NW1/4SW1/4;
                                                                   limited from a depth of 8,200'
                                                                   subsea to a depth of 25,000' subsea.

 EI      0109     17967      G17967       Tana       07/01/97      All of Block 109, Eugene Island
                                                                   Area, INSOFAR AND ONLY INSOFAR AS
                                                                   said lease covers that portion of
                                                                   Eugene Island Block 109 below
                                                                   17,000 feet true vertical depth
                                                                   (TVD) down to and including 35,000
                                                                   feet TVD;
</TABLE>

                                  Page 1 of 3
<PAGE>

                                    EXHIBIT A
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                      DEDICATED LEASES AS OF AUGUST 1, 1999
                          LEASES WITH OPERATING RIGHTS

<TABLE>
<S>     <C>       <C>        <C>       <C>           <C>           <C>
 EI      0255      1958      G01958      Forest      01/01/70      S1/2 of Block 255, Eugene Island
                                                                   Area, INSOFAR AND ONLY INSOFAR AS
                                                                   the operating rights affect the
                                                                   SW1/4SW1/4SW1/4 INSOFAR AND ONLY
                                                                   INSOFAR AS the "P" Sand which is
                                                                   defined in that certain Federal
                                                                   Unit Agreement (Contract No.
                                                                   14-08-0001-12325) Eugene Island
                                                                   Block 276 "P" Sand, Reservoir 'A',
                                                                   as the stratigraphic equivalent of
                                                                   that productive sand.

 GA      0394     13317      G13317      IP Pet      12/01/91      All of Block 394, Galveston Area,
                                                                   INSOFAR AND ONLY INSOFAR as the
                                                                   operating rights in the lease cover
                                                                   the depths from the surface of the
                                                                   earth down to the stratigraphic
                                                                   equivalent of 8,850 feet true
                                                                   vertical depth as seen in the
                                                                   Electric log for the OCS-G 13317
                                                                   Well No. 2.

 GA      0395     12508      G12508      IP Pet      10/01/90      All of Block 395, Galveston Area,
                                                                   INSOFAR AND ONLY INSOFAR AS the
                                                                   operating rights in the lease cover
                                                                   the depths from the surface of the
                                                                   earth down to the stratigraphic
                                                                   equivalent of 100 feet below the
                                                                   total depth drilled in the OCS-G
                                                                   12508 Well 1, which was drilled to
                                                                   a true vertical depth of 8,508
                                                                   feet.

 HI      0131     14863      G14863      Vastar      10/01/94      All of Block 131, High Island Area,
                                                                   INSOFAR AND ONLY INSOFAR AS said
                                                                   lease includes Assignor's operating
                                                                   rights from the surface to 8,000
                                                                   feet TVD in the W1/2 of the Lease;

 HI      0154     14159      G14159       SOI        01/01/94      N1/2 of block 154, High Island
                                                                   Area, INSOFAR AND ONLY INSOFAR as
                                                                   the lease covers the NW1/4;
                                                                   W1/2NE1/4 and W1/2E1/2NE1/4 of said
                                                                   Block 154, from below 8,000 TVD to
                                                                   30,000 TVD;

 HI      0154      2357      G02357    Northstar     08/01/73      S1/2 of Block 154, High Island
                                                                   Area, INSOFAR AND ONLY INSOFAR AS
                                                                   said lease covers all depths from
                                                                   the surface down to 100 feet below
                                                                   the base of the stratigraphic
                                                                   equivalent of that sand encountered
                                                                   at a measured depth of 9,815 feet
                                                                   in OCS-G 14159, Well No. 1.

 MC      0267      3799      G03799      Exxon       06/01/78      All of Block 267, Mississippi
                                                                   Canyon, INSOFAR AND ONLY INSOFAR AS
                                                                   the operating rights cover the W1/2
                                                                   of said block from the surface to
                                                                   the earth down to and including the
                                                                   stratigraphic equivalent of 12,135'
                                                                   MD, as seen in Shell OCS-G 3799 No.
                                                                   3 Sonic Log.

 MP      0131     13651      G13651       ATP        09/01/92      All of Block 131, Main Pass Area,
                                                                   INSOFAR AND ONLY INSOFAR AS the
                                                                   lease covers all depths below 8,000
                                                                   feet true vertical depth.

 MP      0303      4253      G04253       Oxy        12/01/79      INSOFAR AND ONLY INSOFAR AS the
                                                                   lease covers the S1/2S1/2 of Block
                                                                   303, Main Pass Area, South and East
                                                                   Addition, down to a depth of
                                                                   25,000'.
</TABLE>

                                  Page 2 of 3

<PAGE>

                                    EXHIBIT A
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                      DEDICATED LEASES AS OF AUGUST 1, 1999
                          LEASES WITH OPERATING RIGHTS

<TABLE>
<S>      <C>      <C>        <C>       <C>           <C>           <C>
 MP      0304      3339      G03339       Oxy        04/01/76      INSOFAR AND ONLY INSOFAR AS the
                                                                   lease covers the SW1/4SW1/4 and the
                                                                   W1/2SE1/4SW1/4 of Block 304, Main
                                                                   Pass Area, South and East Addition,
                                                                   down to a depth of 25,000'.

 MP      0313      4127      G04127     Chevron      10/01/79      All of Block 313, Main Pass Area,
                                                                   South & East Addition, INSOFAR AND
                                                                   ONLY INSOFAR AS said lease covers
                                                                   depths below a true vertical depth
                                                                   of 12,000'.

 SS      0202      5558      G05558       LL&E       07/01/83      All of Block 202, Ship Shoal Area,
                                                                   all intervals lying at depths
                                                                   greater than the stratigraphic
                                                                   equivalent of the top of the "MI"
                                                                   Sand at a depth 350' below the
                                                                   total depth of Conoco's Ship Shoal
                                                                   201 No. 1 Well, same being 12,450'
                                                                   TVD.

 SS      0356      5206      G05206     Soco Off     01/01/83      All of Block 356, Ship Shoal Area,
                                      (Delmar Op)                  INSOFAR BUT ONLY INSOFAR AS said
                                                                   lease covers depths below 8,600'.

 VR      0171      1130      G01130       LL&E       06/01/62      Block 171, Vermilion Area, INSOFAR
                                                                   BUT ONLY INSOFAR AS said lease
                                                                   covers depths from the surface down
                                                                   to a depth of 11,022' below the
                                                                   mean low wave of the Gulf of Mexico.

 VR      0241     15194      G15194       EEX        07/01/95      All of Block 241, Vermillion Area,
                                                                   INSOFAR AND ONLY INSOFAR AS said
                                                                   lease covers the NW1/4 as to all
                                                                   depths from the surface down to 100
                                                                   feet below the base of the
                                                                   stratigraphic equivalent of that
                                                                   sand encountered at a measured
                                                                   depth of 11,840 feet as seen in the
                                                                   OCS-G 5386, Well No. 1.

 VR      0332      9514      G09514     Samedan      07/01/88      All of Block 332, Vermilion Area,
                                                                   South Addition, INSOFAR AND ONLY
                                                                   INSOFAR AS the lease covers a depth
                                                                   from 12,000' subsea to 100,000'
                                                                   subsea.
</TABLE>

                                  Page 3 of 3
<PAGE>

                                    EXHIBIT A
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                      DEDICATED LEASES AS OF AUGUST 1, 1999
            OVERRIDING ROYALTY INTERESTS AND OTHER OIL AND GAS RIGHTS

<TABLE>
<CAPTION>
            BLOCK        LEASE #         LEASE     CURRENT LEASE OPERATOR       DATE       SPUD DATE
----------------------------------------------------------------------------------------------------
<S>         <C>         <C>             <C>        <C>                        <C>          <C>
BS           0050       LA. 16393       L06393     Log Exploration            02/15/99
EB           0642          9183         G09183     Kerr-McGee                 10/01/87         -
EB           0643          9184         G09184     Kerr-McGee                 10/01/87      11/25/97
EB           0688          9191         G09191     Kerr-McGee                 11/01/87      01/17/98
EB           0732          9194         G09194     Kerr-McGee                 10/01/87         -
EI           0116           478         G00478     Ocean Energy               01/01/55      09/05/97
EI           0172          5494         G05494     Newfield                   07/01/83      01/21/99
EI           0255          1958         G01958     Forest                     01/01/70      06/04/99
EI           0354         10752         G10752     Texaco                     05/01/89      10/03/97
EW           0921         12142         G12142     British-Borneo             05/01/90      02/05/99
EW           0963         13084         G13084     Marathon                   07/01/91      11/19/96
EW           0964         12144         G12144     British-Borneo             05/01/90      07/20/99
EW           0965         12145         G12145     British-Borneo             05/01/90      01/23/98
GA           0144         17119         G17119     Mariner                    01/01/97      08/23/98
GA           0321         11316         G11316     Apache                     11/01/89      01/23/92
GB           0117         12631         G12631     Flextrend                  10/01/90      11/04/96
GB           0200         15852         G15852     Amerada Hess               11/01/95      01/18/99
GI           0076          2161         G02161     Forcenergy                 10/01/72      01/05/78
GC           0020         15531         G15531     Reading & Bates            09/01/95      12/23/96
GC           0825          9981         G09981     Amoco                      05/01/88         -
GC           0826          9982         G09982     Amoco                      05/01/88      12/08/98
MP           0047       LA. 16392       L16392     Log Exploration            02/15/99
MP           0233         16509         G16509     Coastal Oil                09/01/96      04/07/98
MP           0255          7825         G07825     Snyder                     08/01/85      09/10/97
MP           0259          7827         G07827     Snyder                     09/01/85      11/03/98
MP           0260          7828         G07828     Snyder                     09/01/85      02/26/98
MC           0546         14642         G14642     British-Borneo             05/01/94      05/25/98
MC           0718          7952         G07952     Mariner                    08/01/85      06/03/95
MO          TR.92        ALA 705        A00705     Mobil                      07/19/88         -
MO          TR.74        ALA 703        A00703     Mobil                      07/19/88         -
MO          TR.75       1584/0130       A01584     Mobil
                         2865/585
                         2865/591
                         3322/346
MO          TR.93        ALA 706        A00706     Mobil                      07/19/88         -
MU          862-L      TX. M-98756      T98756                                10/07/97
MU          863-L      TX. M-98757      T98757                                10/07/97
SS           0103         18007         G18007     Basin                      07/01/97      04/03/99
SS           0321         12955         G12955     ATP                        05/01/91      04/24/97
SM           0255          9564         G09564     Seagull                    08/01/88      07/11/93
SM           0266          9565         G09565     Seagull                    08/01/88      09/23/93
VR           0159          3128         G03128     McMoran                    07/01/75      06/04/98
VR           0221          4424         G04424     TDC                        11/01/80      06/04/94
VR           0296          9511         G09511     Seneca Res                 06/01/88      03/11/93
VR           0370          2275         G02275     Transworld                 02/01/73      10/19/98
VR           0385         12880         G12880     Transworld                 07/01/91      06/04/96
VK           0692          7898         G07898     Snyder                     09/01/85         -
</TABLE>

                                  Page 1 of 2

<PAGE>

                                   EXHIBIT A
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                     DEDICATED LEASES AS OF AUGUST 1, 1999
           OVERRIDDING ROYALTY INTERESTS AND OTHER OIL AND GAS RIGHTS

<TABLE>
<S>          <C>          <C>           <C>        <C>                        <C>           <C>
VK           0693          7898         G07898     Snyder                     09/01/85      11/19/90
VK           0698          7901         G07901     Snyder                     08/01/85      06/07/97
WD           0137         14566         G14566     Sonat                      05/01/94      01/31/99
WC           0368          5315         G05315     Century Offshore           07/01/83      5/59/98
</TABLE>

                                  Page 2 of 2

<PAGE>

                                    EXHIBIT A
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                      DEDICATED LEASES AS OF AUGUST 1, 1999
                                  STATE LEASES

<TABLE>
<CAPTION>
                                                        LEASE
      AREA              BLOCK      LEASE #             OPERATOR              LEASE DATE
---------------------------------------------------------------------------------------
<S>                     <C>       <C>            <C>                         <C>
Mobile - Fairway         113       AL 531                 SOI                  4/2/81
Mobile - Fairway         132       AL 532                 SOI                  4/2/81
Mobile Bay               109       AL 627                 SOI                  8/14/84
South Pass                1        LA 988                 SOI                  4/25/47
Galveston               249 L     TX 98156       Spinnaker Exp Co, LLC         4/1/97
Galveston               249 L     TX 99204       Spinnaker Exp Co, LLC         4/7/98
Galveston               250 L     TX 98157       Spinnaker Exp Co, LLC         4/1/97
South Pass 31            31        LA14860                SOI                  1/17/95
South Pass 31            31        LA14861                SOI                  1/17/95
Main Pass                47       La 16392           Main Pass LLC             2/15/99
Breton Sound             50       La 16393           Main Pass LLC             2/15/99
</TABLE>

                                  Page 1 of 1

<PAGE>

                                    EXHIBIT A
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                      DEDICATED LEASES AS OF AUGUST 1, 1999
                            PARTICIPATION AGREEMENTS

<TABLE>
<CAPTION>
                                                                          LEASE        SPUD
AREA         BLOCK      LEASE #      LEASE    CURRENT LEASE OPERATOR       DATE        DATE
---------------------------------------------------------------------------------------------
<S>          <C>        <C>         <C>       <C>                        <C>         <C>
 HI          A545        17199      G17199    SOI                        01/01/97    09/12/97
 VK          0779        13673      G13673    ELF                        08/01/95    02/16/99
 VK          0823        10942      G10942    ELF                        07/01/89    07/17/99
 EI          0172         5494      G05494    NEWFIELD EXP               07/01/83    01/21/99
</TABLE>

                                  Page 1 of 1

<PAGE>

                                    EXHIBIT B
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                                 EXCLUDED LEASE

<TABLE>
<CAPTION>
SUPPLY SOURCE                    RECEIPT POINT                   LEASE NUMBER
-------------                    -------------                   ------------
<S>                              <C>                             <C>
Grand Isle 33                    Grand Isle 33                   OCS-G-4002

Sabine 10                        Sabine 10                       OCS-G-3958

Sabine 12                        Sabine 12                       OCS-G-14590

Sabine 17                        Sabine 10                       OCS-G-4143

East Breaks 641                  East Breaks 643                 OCS-G-21374

East Breaks 642                  East Breaks 643                 OCS-G-09183

East Breaks 643                  East Breaks 643                 OCS-G-09184

East Breaks 686                  East Breaks 643                 OCS-G-20729

East Breaks 688                  East Breaks 643                 OCS-G-09191

East Breaks 732                  East Breaks 643                 OCS-G-09194

NPI 969                          NPI 969                         OCS-G-5953

NPI 975                          NPI 969                         OCS-G-20603

NPI 976                          NPI 969                         OCS-G-5954

BR A-19                          BR A-19                         OCS-G-3936
</TABLE>

                                  Page 1 of 2

<PAGE>

                                    EXHIBIT B
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                                 EXCLUDED LEASE

<TABLE>
<S>                              <C>                             <C>
BR A-20                          BR A-19                         OCS-G-3476

WC 565                           WC 565                          OCS-G-2015

Mobile Block 113                 Yellowhammer                    AL-531

Mobile Block 132                 Yellowhammer                    AL-532
</TABLE>

                                  Page 2 of 2

<PAGE>

                                    EXHIBIT C
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                               CONSIDERATION BASIS

* CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY
FILED WITH THE COMMISSION, AND THE APPROPRIATE SECTION HAS BEEN MARKED AT THE
APPROPRIATE PLACE AND THE MARGIN WITH A STAR (*).

<TABLE>
<CAPTION>
         PLANT                      CONSIDERATION BASIS
         -----                      -------------------
       <S>                          <C>
*      [REDACTED]
</TABLE>

                                     Page 1

<PAGE>

                                    EXHIBIT D
            SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS
                 UPSTREAM PIPELINES WITH PROCESSOR'S RETROGRADE

<TABLE>
<CAPTION>
UPSTREAM PIPELINE                       GAS PLANT         COUNTY/PARISH
------------------                      ---------         -------------
<S>                                     <C>               <C>
Southern Natural Pipeline               Toca              St. Bernard, LA

Mississippi Canyon Gas Pipeline         Venice            Plaquemines, LA

Destin Pipeline                         Pascagoula        Jackson, MS
</TABLE>

                                     Page 1

<PAGE>

EXHIBIT E

SEVENTH AMENDMENT TO CONVEYANCE OF GAS PROCESSING RIGHTS

ATTORNMENT LETTER

[Name of Producer]                          [Name of Transferee of Lease]
[Address of Producer]                       [Address of Transferee of Lease]

Ladies and Gentlemen:

Subject: Transfer of Certain Leases
         Notification and Consent to Assignment

         1. AGREEMENT FOR TRANSFER OF LEASES. Per prior discussions, your
respective offices have been apprised that [name of producer] ("[name of
producer]") and [name of transferee] ("Successor Producer") have entered an
agreement by which [name of producer] will transfer to Successor Producer (the
"Transfer") those certain interests in and to certain properties and leases as
described on Exhibit A ( the "Properties").

         2. COGNIZANCE OF PRIOR CONVEYANCE OF PROCESSING RIGHTS. The parties
acknowledge that all gas processing rights associated with the Properties have
been conveyed to Processor by virtue of that certain Seventh Amendment to
Conveyance of Gas Processing Rights (as the same may be amended from time to
time after April 1, 2004, the "Conveyance of Processing Rights") dated April 1,
2004 by and between Enterprise Gas Processing, LLC ("Processor") and Shell Oil
Company and certain of its named affiliates (collectively, "Producers"), a copy
of which is attached hereto and made a part hereof as if set forth herein in its
totality.

         3. RESERVATION OF RIGHTS BY PROCESSOR. Processor hereby expressly
reserves all its rights under the Conveyance of Processing Rights with respect
to the Properties. Successor Producer hereby acknowledges and agrees that it is
acquiring the Properties subject to the rights conveyed to Processor in the
Conveyance of Processing Rights.

         4. ASSUMPTION OF PRODUCER'S OBLIGATIONS. Successor Producer hereby
assumes and agrees to perform all of the obligations of [name of producer] to
Processor, and receives and accepts all rights of [name of producer], under the
Conveyance of Processing Rights, insofar as they relate to the Properties.

         5. CONSENT TO TRANSFER. Processor hereby acknowledges and consents to
the Transfer and agrees to render to Successor Producer the performance of
Processor's obligations to Producers under the Conveyance of Processing Rights
insofar as they relate to the Properties.

<PAGE>

         6. COUNTERPARTS. This document may be executed in any number of
counterparts, each of which when combined and taken together, shall be
considered but one and the same document.

         7. COVENANTS RUNNING WITH THE LAND. The parties intend that, to the
extent permitted by law, this instrument and the Conveyance of Gas Processing
Rights shall be considered to be covenants running with the Properties which
shall inure to the benefit of, and be binding upon, the successors and assigns
of the parties' interests insofar as they relate to the Conveyance of Gas
Processing Rights or the Properties.

         Your prompt attention to this matter will be appreciated. Should you
have any questions or require further information in this regard, please contact
our office.

Yours very truly,

Name
[title]

[NAME OF TRANSFEREE]                       [NAME OF PRODUCER]

Agreed to and approved this ______         Agreed to and approved this ______
day of ______________________, 20__.       day of ______________________, 20__.

By: ___________________________            By: ___________________________

Title: _________________________           Title: _________________________

ENTERPRISE GAS PROCESSING, LLC

Agreed to and approved this ______
day of ______________________, 20__.

By: ___________________________

Title: __________________________<PAGE>

                                                                   EXHIBIT 4(i)a

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

                            COMMERCIAL METALS COMPANY

                                       TO

                         THE CHASE MANHATTAN BANK, N.A.,
                                     TRUSTEE

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

                                    INDENTURE

                            DATED AS OF JULY 31, 1995
                            -------------------------

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

<PAGE>

                            COMMERCIAL METALS COMPANY

                 CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
                   SECTIONS 310 THROUGH 318, INCLUSIVE, OF THE
                          TRUST INDENTURE ACT OF 1939:

<TABLE>
<CAPTION>
TRUST INDENTURE
   ACT SECTION                                                                                INDENTURE SECTION
--------------                                                                                -----------------
<S>                                                                                            <C>
Section 310(a)(1)............................................................................  609
     (a)(2)..................................................................................  609
     (a)(3)..................................................................................  Not applicable
     (a)(4)..................................................................................  Not applicable
        (b)..................................................................................  608, 610
Section 311(a)...............................................................................  613
        (b)..................................................................................  613
Section 312(a)...............................................................................  701, 702
        (b)..................................................................................  792(b)
        (c)..................................................................................  702(c)
Section 313(a)...............................................................................  703(a)
        (b)..................................................................................  703(a)
        (c)..................................................................................  703(a)
        (d)..................................................................................  703(b)
Section 314(a)...............................................................................  704
     (a)(4)..................................................................................  101, 1009
        (b)..................................................................................  Not applicable
     (c)(1)..................................................................................  102
     (c)(2)..................................................................................  102
     (c)(3)..................................................................................  Not applicable
        (d)..................................................................................  Not applicable
        (e)..................................................................................  102
Section 315(a)................................................................................ 601
        (b)..................................................................................  602
        (c)..................................................................................  601
        (d)..................................................................................  601
        (e)..................................................................................  514
Section 316(a)...............................................................................  101
  (a)(1)(A)..................................................................................  502, 512
  (a)(1)(B)..................................................................................  513
     (a)(2)..................................................................................  Not applicable
        (b)..................................................................................  508
        (c)..................................................................................  104(c)
Section 317(a)(1)............................................................................  503
     (a)(2)..................................................................................  504
        (b)..................................................................................  1003
Section 318(a)...............................................................................  107
</TABLE>

----------------
Note: This table of contents shall not, for any purposes, be deemed to be a part
of the Indenture.

                                       i

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<S>                                                                                                    <C>
PARTIES..........................................................................................      1

RECITALS OF THE COMPANY..........................................................................      1

                                           ARTICLE ONE

                     DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101       Definitions....................................................................      1
                  "Act"..........................................................................      2
                  "Affiliate"....................................................................      2
                  "Attributable Debt"............................................................      2
                  "Authenticating Agent".........................................................      2
                  "Board of Directors"...........................................................      2
                  "Board Resolution".............................................................      2
                  "Business Day".................................................................      2
                  "Capital Expenditure"..........................................................      2
                  "Capital Lease Obligation".....................................................      3
                  "Commission"...................................................................      3
                  "Company"......................................................................      3
                  "Company Request"; "Company Order".............................................      3
                  "Consolidated Net Tangible Assets".............................................      3
                  "Consolidated Subsidiaries"....................................................      3
                  "Consolidated Tangible Net Worth"..............................................      3
                  "Corporate Trust Office".......................................................      3
                  "corporation"..................................................................      4
                  "Debt".........................................................................      4
                  "Defaulted Interest"...........................................................      4
                  "Depositary"...................................................................      4
                  "Event of Default".............................................................      4
                  "Funded Debt"..................................................................      4
                  "Global Security"..............................................................      4
                  "Holder".......................................................................      4
                  "indebtedness".................................................................      5
                  "Indenture"....................................................................      5
                  "interest".....................................................................      5
                  "Interest Payment Date"........................................................      5
                  "Lien".........................................................................      5
                  "Maturity".....................................................................      5
                  "Net Available Proceeds".......................................................      5
                  "Officers' Certificate"........................................................      6
                  "Opinion of Counsel"...........................................................      6
                  "Original Issue Discount Security".............................................      6
                  "Outstanding"..................................................................      6
                  "Paying Agent".................................................................      7
                  "Place of Payment".............................................................      7
                  "Predecessor Security".........................................................      7
</TABLE>

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

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                    <C>
                  "Principal Property"...........................................................       7
                  "Principal Subsidiary".........................................................       8
                  "Redemption Date"..............................................................       8
                  "Redemption Price".............................................................       8
                  "Regular Record Date"..........................................................       8
                  "Responsible Officer"..........................................................       8
                  "Sale and Leaseback Transaction"...............................................       8
                  "Securities"...................................................................       8
                  "Security Register" and "Security Registrar"...................................       8
                  "Special Record Date"..........................................................       8
                  "Stated Maturity"..............................................................       8
                  "Subsidiary of the Company"....................................................       9
                  "Trustee"......................................................................       9
                  "Trust Indenture Act"..........................................................       9
                  "U.S. Government Obligations"..................................................       9
                  "Vice President"...............................................................       9
Section 102       Compliance Certificates and Opinions...........................................       9
Section 103       Form of Documents Delivered to Trustee.........................................      10
Section 104       Acts of Holders; Record Dates..................................................      10
Section 105       Notices, Etc., to Trustee and Company..........................................      12
Section 106       Notice to Holders; Waiver......................................................      12
Section 107       Conflict with Trust Indenture Act..............................................      12
Section 108       Effect of Headings and Table of Contents.......................................      13
Section 109       Successors and Assigns.........................................................      13
Section 110       Separability Clause............................................................      13
Section 111       Benefits of Indenture..........................................................      13
Section 112       Governing Law..................................................................      13
Section 113       Legal Holdings.................................................................      13

                                           ARTICLE TWO

                                         SECURITY FORMS

Section 201       Forms Generally................................................................      14
Section 202       Form of Face of Security.......................................................      14
Section 203       Form of Reverse of Security....................................................      16
Section 204       Form of Trustee's Certificate of Authentication................................      20

                                          ARTICLE THREE

                                         THE SECURITIES

Section 301       Amount Unlimited; Issuable in Series...........................................      20
Section 302       Denominations..................................................................      23
Section 303       Execution, Authentication, Delivery and Dating.................................      23
Section 304       Temporary Securities...........................................................      24
Section 305       Registration, Registration of Transfer and Exchange............................      25
Section 306       Mutilated, Destroyed, Lost and Stolen Securities...............................      26
Section 307       Payment of Interest; Interest Rights Preserved.................................      27
Section 308       Persons Deemed Owners..........................................................      28
</TABLE>

----------------
Note: This table of contents shall not, for any purposes, be deemed to be a part
of the Indenture.

                                      iii

<PAGE>

<TABLE>
<S>                                                                                                    <C>
Section 309       Cancellation...................................................................      28
Section 310       Computation of Interest........................................................      28

                                          ARTICLE FOUR

                                   SATISFACTION AND DISCHARGE

Section 401       Satisfaction and Discharge of Indenture........................................      29
Section 402       Application of Trust Money.....................................................      30
Section 403       Defeasance and Discharge of Securities of any Series...........................      30
Section 404       Defeasance of Certain Obligations..............................................      32
Section 405       Reinstatement..................................................................      34

                                          ARTICLE FIVE

                                            REMEDIES

Section 501       Events of Default..............................................................      34
Section 502       Acceleration of Maturity; Rescission and Annulment.............................      36
Section 503       Collection of Indebtedness and Suits for Enforcement by Trustee................      37
Section 504       Trustee May File Proof of Claim................................................      37
Section 505       Trustee May Enforce Claims Without Possession of Securities....................      38
Section 506       Application of Money Collected.................................................      38
Section 507       Limitation on Suits............................................................      38
Section 508       Unconditional Right of Holders to Receive Principal, Premium and Interest......      39
Section 509       Restoration of Rights and Remedies.............................................      39
Section 510       Rights and Remedies Cumulative.................................................      39
Section 511       Delay or Omission Not Waiver...................................................      40
Section 512       Control by Holders.............................................................      40
Section 513       Waiver of Past Defaults........................................................      40
Section 514       Undertaking for Costs..........................................................      41
Section 515       Waiver of Stay or Extension Laws...............................................      41

                                           ARTICLE SIX

                                           THE TRUSTEE

Section 601       Certain Duties and Responsibilities............................................      41
Section 602       Notice of Defaults.............................................................      42
Section 603       Certain Rights of Trustee......................................................      42
Section 604       Not Responsible for Recitals or Issuance of Securities.........................      43
Section 605       May Hold Securities............................................................      43
Section 606       Money Held in Trust............................................................      43
Section 607       Compensation and Reimbursement.................................................      43
Section 608       Disqualification; Conflicting Interests........................................      44
Section 609       Corporate Trustee Required; Eligibility........................................      44
Section 610       Resignation and Removal; Appointment of Successor..............................      45
Section 611       Acceptance of Appointment by Successor.........................................      46
Section 612       Merger, Conversion, Consolidation or Succession to Business....................      47
Section 613       Preferential Collection of Claims Against Company..............................      47
</TABLE>

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Note: This table of contents shall not, for any purposes, be deemed to be a part
of the Indenture.

                                       iv

<PAGE>

<TABLE>
<S>                                                                                                    <C>
Section 614       Appointment of Authenticating Agent............................................      48

                                          ARTICLE SEVEN

                        HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701       Company to Furnish Trustee Names and Addresses of Holders......................      49
Section 702       Preservation of Information; Communications to Holders.........................      49
Section 703       Reports by Trustee.............................................................      50
Section 704       Reports by Company.............................................................      50

                                          ARTICLE EIGHT

                      CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801       Company May Consolidate, Etc., Only on Certain Terms...........................      51
Section 802       Successor Substituted..........................................................      52

                                          ARTICLE NINE

                                     SUPPLEMENTAL INDENTURES

Section 901       Supplemental Indentures Without Consent of Holders.............................      52
Section 902       Supplemental Indentures with Consent of Holders................................      53
Section 903       Execution of Supplement Indentures.............................................      54
Section 904       Effect of Supplemental Indentures..............................................      54
Section 905       Conformity with Trust Indenture Act............................................      54
Section 906       Reference in Securities to Supplemental Indentures.............................      54

                                           ARTICLE TEN

                                            COVENANTS

Section 1001      Payment of Principal, Premium and Interest.....................................      55
Section 1002      Maintenance of Office or Agency................................................      55
Section 1003      Money for Securities Payments to Be Held in Trust..............................      55
Section 1004      Existence......................................................................      56
Section 1005      Maintenance of Properties......................................................      57
Section 1006      Payment of Taxes and Other Claims..............................................      57
Section 1007      Limitation on Liens............................................................      57
Section 1008      Limitation on Sale and Leaseback Transactions..................................      59
Section 1009      Statement of Officers as to Default............................................      59
Section 1010      Waiver of Certain Covenants....................................................      60
Section 1011      SEC Reports....................................................................      60
Section 1012      Limitation on Funded Debt of Principal Subsidiaries............................      60
</TABLE>

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of the Indenture.

                                       v

<PAGE>

<TABLE>
<S>                                                                                                    <C>
                                         ARTICLE ELEVEN

                                    REDEMPTION OF SECURITIES

Section 1101      Applicability of Article.......................................................      60
Section 1102      Election to Redeem; Notice to Trustee..........................................      60
Section 1103      Selection by Trustee of Securities to Be Redeemed..............................      61
Section 1104      Notice of Redemption...........................................................      61
Section 1105      Deposit of Redemption Price....................................................      62
Section 1106      Securities Payable on Redemption Date..........................................      62
Section 1107      Securities Redeemed in Part....................................................      62

                                         ARTICLE TWELVE

                                          SINKING FUNDS

Section 1201      Applicability of Article.......................................................      63
Section 1202      Satisfaction of Sinking Fund Payments with Securities..........................      63
Section 1203      Redemption of Securities for Sinking Fund......................................      63
</TABLE>

----------------
Note: This table of contents shall not, for any purposes, be deemed to be a part
of the Indenture.

                                       vi

<PAGE>

         INDENTURE, dated as of July , 1995, between COMMERCIAL METALS COMPANY,
a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 7800
Stemmons Freeway, Dallas, Texas 75247 and THE CHASE MANHATTAN BANK, N.A., a
national banking association having its principal office at 4 Chase MetroTech
Center, Brooklyn, New York 11245; Attention: Institutional Trust Group, as
Trustee (herein called 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
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.

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

                   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 ONE

             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
         such computation; 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.

                  "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

<PAGE>

         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,
         provided, that any Person who does not own, directly or indirectly,
         more than 5 % of the outstanding voting securities of the Company shall
         not be deemed to "control" the Company; and the terms "controlling" and
         "controlled" have meanings correlative to the foregoing.

                  "Attributable Debt" means the present value (discounted at the
         per annum rate of interest publicly announced by Bank of America
         National Trust and Savings Association, as its "Reference Rate" or
         "Prime Rate" on the date of any calculation made hereunder, provided,
         that if Bank of America National Trust and Savings Association, is no
         longer announcing a Reference Rate or a Prime Rate, the per annum rate
         of interest shall be the Prime Rate most recently published in The Wall
         Street Journal, in either case, compounded monthly) of the obligations
         for rental payments required to be paid during the remaining term of
         any lease of more than 12 months under which any Person is at the time
         liable.

                  "Authenticating Agent" means any Person authorized by the
         Trustee pursuant to Section 614 to act on behalf of the Trustee to
         authenticate Securities of one or more series.

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

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

                  "Business Day", when used with respect to any Place of
         Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday
         which is a day on which banking institutions in that Place of Payment
         are authorized or obligated by law or executive order to open.

                  "Capital Expenditure" means, for any period, any expenditure
         of the Company or its Subsidiaries (whether payable in cash, assets or
         property or accrued as a liability (but without duplication)) during
         such period that, in conformity with generally accepted accounting
         principles consistently applied, are required to be included in fixed
         asset accounts as reflected in the consolidated balance sheets of the
         Company or its Subsidiaries, as applicable.

                  "Capital Lease Obligation" of any Person means the obligation
         to pay rent or other payment amounts under a lease of (or other
         indebtedness arrangements conveying the right to use) real or personal
         property of such Person which is required to be classified and
         accounted for as a capital lease or a liability on the face of a
         balance sheet of such Person in accordance with generally accepted
         accounting principles. The stated maturity of such obligation, as of
         any date (the "measurement date"), shall be the date of the last
         payment of rent or any other amount due under such lease prior to the
         first date after the measurement date upon which such lease may be
         terminated by the lessee, at its sole option, without payment of a
         penalty.

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

                                       2
<PAGE>

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

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

                  "Consolidated Net Tangible Assets" means the net book value of
         all assets of the Company and its Consolidated Subsidiaries, excluding
         any amounts carried as assets for shares of capital stock held in
         treasury, debt discount and expense, goodwill, patents, trademarks and
         other intangible assets, less all liabilities of the Company and its
         Consolidated Subsidiaries (except Funded Debt, minority interests in
         Consolidated Subsidiaries, deferred taxes and general contingency
         reserves of the Company and its Consolidated Subsidiaries), which in
         each case would be included on a consolidated balance sheet of the
         Company and its Consolidated Subsidiaries as of the date of
         determination, all as determined on a consolidated basis in accordance
         with generally accepted accounting principles.

                  "Consolidated Subsidiaries" of any Person means all other
         Persons that would be accounted for as consolidated Persons in such
         Person's financial statements in accordance with generally accepted
         accounting principles.

                  "Consolidated Tangible Net Worth" means the total
         stockholders' equity of the Company and its Consolidated Subsidiaries,
         calculated in accordance with generally accepted accounting principles
         and reflected on the most recent balance sheet of the Company,
         excluding any amounts carried as assets for shares of capital stock
         held in treasury, debt discount and expense, goodwill, patents,
         trademarks and other intangible assets.

                  "Corporate Trust Office" means the principal office of the
         Trustee in Dallas, Texas or The City of New York, at which at any
         particular time its corporate trust business shall be administered.

                  "Corporation" means a corporation, association, company,
         joint-stock company or business trust.

                  "Debt" means (without duplication), with respect to any
         Person, (i) every obligation of such Person for money borrowed, (ii)
         every obligation of such Person evidenced by bonds, debentures, notes
         or other similar instruments, (iii) every reimbursement obligation of
         such Person with respect to letters of credit, bankers' acceptances or
         similar facilities issued for the account of such Person and (iv) every
         obligation of the type referred to in clauses (i) through (iii) of
         another Person the payment of which such Person has guaranteed or is
         responsible or liable for, directly or indirectly, as obligor,
         guarantor or otherwise (but only, in the case of this clause (iv), to
         the extent such Person has guaranteed or is responsible or liable for
         such obligations).

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

                  "Depositary" means, unless otherwise specified by the Company
         pursuant to Section 301, with respect to Securities of any series
         issuable or issued as a Global Security, The Depository Trust Company,
         New York, New York, or any successor thereto registered under the
         Securities Exchange Act of 1934, as amended, or other applicable
         statute or regulation.

                                       3
<PAGE>

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

                  "Funded Debt" means (a) all Debt of the Company and each
         Principal Subsidiary of the Company maturing on, or renewable or
         extendible at the option of the obligor to, a date more than one year
         from the date of the determination thereof, (b) Capital Lease
         Obligations payable on a date more than one year from the date of the
         determination thereof, (c) guarantees, direct or indirect, and other
         contingent obligations of the Company and each Principal Subsidiary of
         the Company in respect of, or to purchase or otherwise acquire or be
         responsible or liable for (through the investment of funds or
         otherwise), any obligations of the type described in the foregoing
         clauses (a) or (b) of others (but not including contingent liabilities
         on customers' receivables sold with recourse), and (d) amendments,
         renewals, extensions and refundings of any obligations of the type
         described in the foregoing clauses (a), (b) or (c).

                  "Global Security" means a Security issued to evidence all or a
         part of any series of Securities which is executed by the Company and
         authenticated and delivered by the Trustee to the Depositary (or its
         nominee or other representative) or pursuant to the Depositary's
         instruction, all in accordance with this Indenture and pursuant to a
         Company Order, which shall be registered as to principal and interest
         in the name of the Depositary or its nominee.

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

                  "Indebtedness", with respect to any Person, includes all
         indebtedness of another Person the payment of which such Person has
         guaranteed or is responsible or liable for, directly or indirectly, as
         obligor, guarantor or otherwise (but only to the extent such Person has
         guaranteed or is responsible or liable for such obligations).

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

                  "Lien" means, with respect to any property or assets, any
         mortgage or deed of trust, pledge, hypothecation, assignment, security
         interest, lien, encumbrance or other security arrangement of any kind
         or nature whatsoever on or with respect to such property or assets
         (including any conditional sale or other title retention agreement
         having substantially the same economic effect as any of the foregoing).

                  "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.

                                       4
<PAGE>

                  "Net Available Proceeds" from any Sale Transaction by any
         Person means cash or readily marketable cash equivalents received
         (including by way of sale or discounting of a note, installment
         receivable or other receivable, but excluding any other consideration
         received in the form of assumption by the acquiree of indebtedness or
         obligations relating to the properties or assets that are the subject
         of such Sale Transaction or received in any other noncash form)
         therefrom by such Person, net of (i) all legal, title and recording tax
         expenses, commissions and other fees and expenses incurred and all
         federal, state, provincial, foreign and local taxes required to be
         accrued as a liability as a consequence of such Sale Transaction, (ii)
         all payments made by such Person or its Principal Subsidiaries on any
         indebtedness which is secured in whole or in part by any such
         properties and assets in accordance with the terms of any Lien upon or
         with respect to any such properties and assets or which must, by the
         terms of such Lien, or in order to obtain a necessary consent to such
         Sale Transaction or by applicable law, be repaid out of the proceeds
         from such Sale Transaction, and (iii) all distributions and other
         payments made to minority interest holders in Principal Subsidiaries of
         such Person or joint ventures as a result of such Sale Transaction.

                  "Officers' Certificate" means a certificate signed by Chairman
         of the Board, a Vice Chairman of the Board, the President or a Vice
         President, and by the Treasurer, an Assistant Treasurer, the Secretary
         or an Assistant Secretary, of the Company, and delivered to the
         Trustee. One of the officers signing an Officers' Certificate given
         pursuant to Section 1009 shall be the principal executive, financial or
         accounting officer of the Company.

                  "Opinion of Counsel" means a written opinion of counsel, who
         may be David M. Sudbury, general counsel for the Company and who may be
         Haynes and Boone, L.L.P., and who shall be reasonably acceptable to the
         Trustee.

                  "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 cancelled 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 in accordance with Section 401;
                  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 for whose payment or redemption
                  money or U.S. Government Obligations in the necessary amount
                  has been theretofore deposited with the Trustee (or another
                  trustee satisfying the requirements of Section 609) in trust
                  for the Holders of such Securities in accordance with Section
                  403; and

                                       5
<PAGE>

                           (iv)     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;

         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, (i) the principal amount of an Original Issue Discount
         Security that shall be deemed to be Outstanding shall be the amount
         upon acceleration of the Maturity thereof pursuant to Section 502, (ii)
         the principal amount of Security denominated in one or more foreign
         currencies or currency units shall be the U.S. dollar equivalent,
         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 on the date of original issuance of such Security of
         the amount determined as provided in (i) above) of such Security, and
         (iii) Securities owned by the Company or any other obligor upon the
         Securities or any Affiliate of the Company or of such other obligor
         shall be disregarded and deemed not to be Outstanding, except that, in
         determining whether the Trustee shall be protected in relying upon any
         such request, demand, authorization, direction, notice, consent or
         waiver, only Securities which a Responsible Officer of the Trustee
         actually knows to be so owned shall be so disregarded. Securities so
         owned which have been pledged in good faith may be regarded as
         Outstanding if the pledgee establishes to the satisfaction of the
         Trustee the pledgee's right so to act with respect to such Securities
         and that the pledgee is not the Company or any other obligor upon the
         Securities or any Affiliate of the Company or of such other obligor.

                  "pari passu", when used with respect to the ranking of any
         indebtedness of any Person in relation to other indebtedness of such
         Person, means that each such indebtedness (a) either (i) is not
         subordinate in right of payment to any other indebtedness of such
         Person or (ii) is subordinate in right of payment to the same
         indebtedness of such person as is the other and is so subordinate to
         the same extent and (b) is not subordinate in right of payment to the
         other or to any indebtedness of such Person as to which the other is
         not so subordinate.

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

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

                  "Place of Payment" when used with respect to the Securities of
         any series, means New York, New York.

                  "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 Securities authenticated and delivered under Section
         306 in exchange for or in lieu of 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 facility (together with the
         land on which it is erected and fixtures comprising a part thereof)
         used primarily for manufacturing, processing, research, warehousing or
         distribution, owned or leased by the Company or a Subsidiary of the
         Company and (i) having a net book value in excess of 3 % of
         Consolidated Net Tangible Assets, other than

                                       6
<PAGE>

         any such facility or portion thereof which is a pollution control
         facility financed by state or local government obligations or is not of
         material importance to the total business conducted or assets owned by
         the Company and its Subsidiaries as an entirety, or (ii) any assets or
         properties acquired with Net Available Proceeds from a Sale and
         Leaseback Transaction that has been irrevocably designated by the
         Company as a Principal Property, which designation shall be in writing
         to the Trustee.

                  "Principal Subsidiary" means any Subsidiary of the Company
         that owns or leases a Principal Property or owns or controls stock
         which under ordinary circumstances has the voting power to elect a
         majority of the Board of Directors of a Principal Subsidiary.

                  "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", means 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", means any vice president, assistant
         vice president or corporate trust officer of the Corporate Trust
         Department of the Trustee 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.

                  "Sale and Leaseback Transaction" of any Person means an
         arrangement with any lender or investor or to which such lender or
         investor is a party providing for the leasing by such Person of any
         Principal Property that, within 12 months of the start of such lease
         and after the Reference Date, has been and is being sold, conveyed,
         transferred or otherwise disposed of by such Person to such lender or
         investor or to any Person to whom funds have been or are to be advanced
         by such lender or investor on the security of such property. The term
         of such arrangement, as of any date (the "measurement date"), shall end
         on the date of the last payment of rent or any other amount due under
         each arrangement on or prior to the first date after the measurement
         date on which such arrangement may be terminated by the lessee, as its
         sale option, without payment of a penalty. "Sale Transaction" means any
         such sale, conveyances, transfer or other disposition. The "Reference
         Date" means, for any property that becomes a Principal Property, the
         last day of the sixth month after the date of the acquisition,
         completion of construction and commencement of operation of such
         property.

                  "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 Default 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.

                                       7
<PAGE>

                  "Subsidiary of the Company" means any corporation of which the
         Company directly or indirectly owns or controls stock which under
         ordinary circumstances (not dependent upon the happening of a
         contingency) has the voting power to elect a majority of the board of
         directors of such corporation.

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

                  "U.S. Government Obligations" means securities which are (i)
         direct obligations of the United States of America for the payment of
         which its full faith and credit is pledged or (ii) obligations of a
         Person controlled or supervised by and acting as an agency or
         instrumentality of the United States of America the payment of which is
         unconditionally guaranteed as a full faith and credit obligation by the
         United States of America, which, in either case, are not callable or
         redeemable at the option of the issuer thereof, and shall also include
         a depository receipt issued by a bank (as defined in Section 3(a)(2) of
         the Securities Act of 1933, as amended) as custodian with respect to
         any such U.S. Government Obligation or a specific payment of interest
         on or principal of any U.S. Government Obligation held by such
         custodian for the account of the holder of a 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
         interest on or principal of the U.S. Government Obligation evidenced by
         such depository receipt.

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

Section 102       Compliance Certificates and Opinions

         Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

         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
         definition herein relating thereto;

                                       8
<PAGE>

                  (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, such individual has made such examination or investigation
         as is necessary to enable such individual 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.

         Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's 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 stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate 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; Record Dates

         (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. 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, 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 such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall

                                       9
<PAGE>

also constitute sufficient proof of such signer's 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 Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders of Securities of any series entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by any person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders of
one or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action.

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

         (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 Securities issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.

Section 105       Notices, Etc., to Trustee and Company

         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 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 Department, or

                  (2)      the Company 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 at any
         other address previously furnished in writing to the Trustee by the
         Company, to the attention of the Treasurer with a copy to the
         Secretary.

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, or by facsimile
transmission to each Holder affected by such event, at such Holder's address as
it appears in the Security Register, not later than the latest date (if any),
and not earlier than the earliest date (if any), prescribed for the giving of
such notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect 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

                                       10
<PAGE>

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.
Notice may be given to the Trustee by facsimile transmission at telephone number
(718) 242-5886, and to the Company at telephone number (214) 689-4326.

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

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 shall
bind its 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.

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 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, but without regard to
principles of conflicts of laws.

Section 113       Legal Holdings

         In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section)) 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 as if made on the Interest

                                       11
<PAGE>

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.

                                   ARTICLE TWO

                                 SECURITY FORMS

Section 201       Forms Generally

         The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and 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 definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.

Section 202       Form of Face of Security

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

         UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.]

         [if the Security is an Original Issue Discount Security, insert - FOR
PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY
IS ______% OF ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS ____________, 19__[,]
[AND] THE YIELD TO MATURITY IS ____%[, THE METHOD USED TO DETERMINE THE YIELD IS
____________ AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT
ACCRUAL

                                       12
<PAGE>

PERIOD OF ___________, 19__ TO __________, 19__ IS ____% OF THE PRINCIPAL AMOUNT
OF THIS SECURITY].

                            COMMERCIAL METALS COMPANY
                               __________________

No. _________                                                      $____________

         Commercial Metals Company, a corporation duly organized and existing
under the laws of the Delaware (herein called the "Company"), which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ________________________ or registered
assigns, the principal sum of ________________________ Dollars on
___________________ [if the Security is to bear interest prior to Maturity,
insert - and to pay interest thereon from ____________________ or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on ______________________ and _________________ in each year,
commencing __________________, at the rate of ______% per annum, until the
principal hereof is paid or made available for payment [if applicable, insert -,
and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of ____% per annum on any overdue principal and premium
and on any overdue installment of interest]. 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 fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
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 paid 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.]

         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 [if applicable, insert
-; provided however that at the option of the Company payment of interest may be
made by check mailed on or prior to an Interest Payment Date to the address of
the Person entitled thereto as such address shall appear in the Security
Register].

                                       13
<PAGE>

         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:                                         COMMERCIAL METALS COMPANY

                                               By:______________________________

ATTEST:

Section 203       Form of Reverse of Security

         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated __________, 1995 (herein called the
"Indenture"), between the Company and The Chase Manhattan Bank, N.A., as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate principal amount to
$_____________].

         [If applicable, insert - The Securities of this series are subject to
redemption upon not less than 30 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 ____________, 19___], 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 year
indicated,

        Year      Redemption Price          Year        Redemption Price
       ------     ----------------         ------       ----------------

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

                                       14
<PAGE>

Securities, of record at the close of business on the relevant Record Dates as
referred to on the face hereof, all as provided in the Indenture].

         [if applicable, insert - The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on _______________ in
any year commencing with the year _____ and ending with the year _____ through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [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,

                                                      Redemption Price For
                      Redemption Price For          Redemption Otherwise Than
                  Redemption Through Operation          Through Operation
      Year             of the Sinking Fund             of the Sinking Fund
      ----             -------------------             -------------------

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.]

         [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, 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.]

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

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

         [If the Security is an Original Issue Discount Security, insert - If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such

                                    15
<PAGE>

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 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 rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company 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
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 hereof or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any interest hereof on or
after the respective due dates expressed herein.

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

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more
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 only in minimum denominations of $100,000 and any integral
multiple of $1,000 in excess thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.

                                       16
<PAGE>

         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.

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

Section 204       Form of Trustee's Certificate of Authentication

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

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

                                                 THE CHASE MANHATTAN BANK, N.A.,

                                                 as Trustee

                                                 By:____________________________

                                  ARTICLE THREE

                                 THE SECURITIES

Section 301       Amount Unlimited; Issuable in Series

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

         The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

                  (1)      the title of the Securities of the series (which
         shall distinguish the Securities of the series from Securities of any
         other series);

                  (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 Section 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);

                                       17
<PAGE>

                  (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, or the method or methods by which such rate
         or rates shall be determined, if any, 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 any interest
         payable on any Interest Payment Date;

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

                  (7)      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;

                  (8)      if other than denominations of $100,000 and any
         integral multiple of $1,000 in excess thereof, the denominations in
         which Securities of the series shall be issuable;

                  (9)      the currency, currencies or currency units in which
         payment of the principal of and any premium and interest on any
         Securities of the series shall be payable if other than the currency of
         the United States of America and the manner of determining the
         equivalent thereof in the currency of the United States of America for
         purposes of the definition of "Outstanding" in Section 101;

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

                  (11)     whether the Securities of the series shall be issued
         in whole or in part in the form of a Global Security and, in such case,
         the Depositary with respect to such Global Security or Securities and
         the circumstances under which any such Global Security may be
         registered for transfer for exchange, or authenticated and delivered,
         in the name of a Person other than such Depositary or its nominee, if
         other than as set forth in Section 305;

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

                  (13)     if other than the entire 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; and

                                       18
<PAGE>

                  (14) any other terms of the series (which terms shall not be
         inconsistent with the provisions of this Indenture, except as permitted
         by Section 901(5)).

         All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Be rd Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto. The terms of the
Securities of any series may provide, without limitation, that the Securities
shall be authenticated and delivered by the Trustee on original issue from time
to time upon telephonic or written order of persons designated in the Officers'
Certificate or supplemental indenture (telephonic instructions to be promptly
confirmed in writing by such person) and that such persons are authorized to
determine, consistent with such Officers' Certificate or any applicable
supplemental indenture, such terms and conditions of the Securities of such
series as are specified in such Officers' Certificate or supplemental indenture.

         Except as otherwise provided with respect to any series of Securities,
at the option of the Company, interest on the Securities of any series that
bears interest may be paid by mailing a check, on or before the applicable
Interest Payment Date, to the address of the person entitled thereto as such
address shall appear in the Securities Register.

         If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to delivery of the Officers' Certificate
setting forth the terms of the series.

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 $100,000 and any integral multiple of $1,000 in excess 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 Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Treasurer or Secretary or one of its Assistant Treasurers or 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. If the
form or terms of the Securities of the series have been established in or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Article 6) shall be fully protected in
relying upon, an Opinion of Counsel stating:

                                       19
<PAGE>

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

                  (b)      if the terms of such Securities have been established
         by or pursuant to Board Resolution as permitted by Section 301, that
         such terms have been' established in conformity with the provisions of
         this Indenture; and

                  (c)      that such Securities, when authenticated and
         delivered by the Trustee and issued by the Company in the manner and
         subject to any conditions specified in such Opinion of Counsel, will
         constitute valid and legally binding obligations of the Company
         enforceable in accordance with their terms, subject to bankruptcy,
         insolvency, fraudulent transfer, reorganization, moratorium and similar
         laws of general applicability relating to or affecting creditors'
         rights and to general equity principles.

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.

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

         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. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered 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

                                       20
<PAGE>

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 one or more definitive Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount and tenor. Until so exchanged the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.

Section 305       Registration, Registration of Transfer and Exchange

         The Company shall cause to be kept at the Corporate Trust Office of the
Trustee 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. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

         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, the name
of the designated transferee or transferees, one or more new Securities of the
same series, of any authorized denominations and of a like aggregate principal
amount and tenor.

         At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor, 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 such Holder's 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 the foregoing, no Global Security shall be registered
for transfer or exchange, or authenticated and delivered, whether pursuant to
this Section, Section 304, 306, 906 or 1107 or otherwise,

                                       21
<PAGE>

in the name of a Person other than the Depositary for such Global Security or
its nominee until (i) the Depositary with respect to a Global Security notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or the Depositary ceases to be a clearing agency registered
under the Exchange Act, (ii) the Company executes and delivers to the Trustee a
Company Order that such Global Security shall be so transferable and
exchangeable, or (iii) there shall have occurred and be continuing an Event of
Default with respect to the Securities of such series. Upon the occurrence in
respect of any Global Security of any series of any one or more of the
conditions specified in clauses (i), (ii) or (iii) of the preceding sentence or
such other conditions as may be specified as contemplated by Section 301 for
such series, such Global Security may be registered for transfer or exchange for
Securities registered in the names of, or authenticated and delivered to, such
Persons as the Depositary with respect to such series shall direct.

         Except as provided in the preceding paragraph, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any Global Security, whether pursuant to this Section,
Section 304, 306, 906 or 1107 or otherwise, shall also be a Global Security and
bear the legend specified in Section 202.

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 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 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 or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

         In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security. Upon the issuance of any
new Security under this Section, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.

         Every new Security 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, 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

         Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any

                                       22
<PAGE>

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 Securities 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 to 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 for 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 such Holder's 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.

         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 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 any premium
and (subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

                                       23
<PAGE>

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 cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and 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 has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of unless otherwise directed by
a Company Order.

Section 310       Computation of Interest

         Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

Section 401       Satisfaction and Discharge of Indenture

         This Indenture shall upon Company request cease to be of further effect
(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) 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,

                                       24
<PAGE>

                  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 the purpose an amount sufficient to pay and
                  discharge the entire indebtedness on such Securities not
                  theretofore delivered to the Trustee for cancellation, for
                  principal and any premium and interest to the date of such
                  deposit (in the case of Securities which have become due and
                  payable) or to the Stated Maturity or Redemption Date, as the
                  case may be;

                  (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 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 or U.S.
Government Obligations shall have been deposited with the Trustee in accordance
with Section 403 or 404, the obligations of the Company to the Trustee under
Section 402(b), 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 and the last paragraph of Section 1003 shall survive.

Section 402       Application of Trust Money

         (a)      Subject to the provisions of the last paragraph in Section
1003, all money deposited with the Trustee pursuant to Section 401, all money
and U.S. Government Obligations deposited with the Trustee pursuant to Section
403 or 404 and all money received by the Trustee in respect of U.S. Government
Obligations deposited with the Trustee pursuant to Section 403 or 404, 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 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 or
received by the Trustee or to make mandatory sinking fund payments or analogous
payments as contemplated by Section 403 or 404.

         (b)      The Company shall pay and shall indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against U.S. Government
Obligations deposited pursuant to Section 403 or 404 or the interest and
principal received in respect of such obligations other than any payable by or
on behalf of Holders.

         (c)      The Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it as
provided in Section 403 or 404 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are then in excess of the amount thereof which
then would have been required to be deposited for the purpose for which such
money or U.S. Government Obligations were deposited or received.

Section 403       Defeasance and Discharge of Securities of any Series

         The Company may elect, at its option by Board Resolution at any time,
to have this Section 403 be applicable to Securities of any series. Upon the
Company's exercise of the option to have this Section 403 applied to Securities
of any series, then notwithstanding Section 401, the Company shall be deemed

                                       25
<PAGE>

to have paid and discharged the entire indebtedness on all the Outstanding
Securities of that series, the provisions of this Indenture as it relates to
such Outstanding Securities (except as to the rights of Holders of Securities to
receive, from the trust funds described in subparagraph (1) below, payment of
the principal of (and premium, if any) or interest on such Securities on the
Stated Maturity of such principal or installment of principal or interest or any
mandatory sinking fund payments or analogous payments applicable to the
Securities of that series on the day on which such payments are due and payable
in accordance with the terms of the Indenture and of such Securities, the
Company's obligations with respect to such Securities under Sections 304, 306,
1002 and 1003 and the rights, powers, trusts, duties and immunities of the
Trustee hereunder) shall no longer be in effect, and the Trustee, at the expense
of the Company, shall, upon Company Request, execute proper instruments
acknowledging the same, provided that the following conditions have been
satisfied:

                  (1)      the Company has deposited or caused to be deposited
         with the Trustee (or another trustee satisfying the requirements of
         Section 609), irrevocably (irrespective of whether the conditions in
         subparagraphs (2), (3), (4), (5), (6), (7) and (8) below have been
         satisfied, but subject to the provisions of Section 402(c) and the last
         paragraph of Section 1003), as trust funds in trust, specifically
         pledged as security for, and dedicated solely to, the benefit of the
         Holders of the Securities of that series, with reference to this
         Section 403, (A) money in an amount, or (B) U.S. Government Obligations
         which through the payment of interest and principal in respect thereof
         in accordance with their terms will provide not later than the opening
         of business on the due date of any payment referred to in clause (i) or
         (ii) of this subparagraph (1) money in an amount, or (C) a combination
         thereof, sufficient, in the opinion of a nationally recognized firm of
         independent public accountants expressed in a written certification
         thereof delivered to the Trustee, to pay and discharge (i) the
         principal of (and premium, if any) and each installment of principal
         (and premium, if any) and interest on such Outstanding Securities on
         the Stated Maturity of such principal or installment of principal or
         interest and (ii) any mandatory sinking fund payments or analogous
         payments applicable to Securities of such series on the day on which
         such payments are due and payable in accordance with the terms of this
         Indenture and of such Securities;

                  (2)      such deposit will not result in a breach or violation
         of, or constitute a default under, any other agreement or instrument to
         which the Company is a party or by which it is bound, which breach,
         violation or default is material to the interests of the Holders of the
         Securities of that series;

                  (3)      no Event of Default or event which with the giving of
         notice or lapse of time, or both, would become an Event of Default with
         respect to the Securities of that series (other than an Event of
         Default under Section 501(4) with respect to any of Sections 1005
         through 1008, inclusive, and Section 801) shall have occurred and be
         continuing on the date of such deposit and no Event of Default under
         Section 501(6) or Section 501(7) or event which with the giving of
         notice or lapse of tine or both, would become an Event of Default under
         Section 501(6) or Section 501(7) shall have occurred and be continuing
         on the 91st day after such date;

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

                                       26
<PAGE>

                  (5)      if the Securities of that series are then listed on
         the New York Stock Exchange, Inc., the Company shall have delivered to
         the Trustee an Officers' Certificate to the effect that such deposit,
         defeasance and discharge will not cause such Securities to be delisted;

                  (6)      the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent provided for relating to the defeasance and discharge of the
         entire indebtedness on all Outstanding Securities of any such series as
         contemplated by this Section have been complied with;

                  (7)      such deposit, defeasance and discharge shall not
         cause the Trustee to have a conflicting interest within the meaning of
         the Trust Indenture Act; and

                  (8)      such deposit, defeasance and discharge shall not
         result in the trust arising from such deposit constituting an
         investment company within the meaning of the Investment Company Act of
         1940, as amended, unless such trust shall be qualified under such Act
         or exempt from regulation thereunder.

Section 404       Defeasance of Certain Obligations

         The Company may elect, at its option by Board Resolution at any time,
to have this Section 404 be applicable to Securities of any series. Upon the
Company's exercise of the option to have this Section 404 applied to the
Securities of any series, the Company may omit to comply with and shall have no
liability in respect of any term, provision or condition set forth in Sections
1005 through 1008, inclusive (whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein), and Section 501(4) (with
respect to any term, provision or condition set forth in Sections 1005 through
1008, inclusive and Section 801) and 501(5) shall be deemed not to be an Event
of Default, in each case with respect to the Securities of that series, provided
that the following conditions have been satisfied:

                  (1)      the Company has deposited or caused to be deposited
         with the Trustee (or another trustee satisfying the requirements of
         Section 609), irrevocably (irrespective of whether the conditions in
         subparagraphs (2), (3), (4), (5), (6), (7) and (8) below have been
         satisfied, but subject to the provisions of Section 402(c) and the last
         paragraph of Section 1003), as trust funds in trust, specifically
         pledged as security for, and dedicated solely to, the benefit of the
         Holders of the Securities of that series, with reference to this
         Section 404, (A) money in an amount, or (B) U.S. Government Obligations
         which through the payment of interest and principal in respect thereof
         in accordance with their terms will provide not later than the opening
         of business on the due date of any payment referred to in clause (i) or
         (ii) of this subparagraph (1) money in an amount, or (C) a combination
         thereof, sufficient, in the opinion of a nationally recognized firm of
         independent public accountants expressed in a written certification
         thereof delivered to the Trustee, to pay and discharge (i) the
         principal of (and premium, if any) and each installment of principal
         (and premium, if any) and interest on such Outstanding Securities on
         the Stated Maturity of such principal or installment of principal or
         interest and (ii) any mandatory sinking fund payments or analogous
         payments applicable to Securities of such series on the day on which
         such payments are due and payable in accordance with the terms of this
         Indenture and of such Securities;

                  (2)      such deposit will not result in a breach or violation
         of, or constitute a default under, any other agreement or instrument to
         which the Company is a party or by which it is bound, which breach,
         violation or default is material to the interests of the Holders of the
         Securities of that series;

                                       27
<PAGE>

                  (3)      no Event of Default or event which with the giving of
         notice or lapse of time, or both, would become an Event of Default with
         respect to the Securities of that series (other than an Event of
         Default under Section 501(4) with respect to any of Sections 1005
         through 1008, inclusive, and Section 801) shall have occurred and be
         continuing on the date of such deposit and no Event of Default under
         Section 501(6) or Section 501(7) or event which with the giving of
         notice or lapse of tine or both, would become an Event of Default under
         Section 501(6) or Section 501(7) shall have occurred and be continuing
         on the 91st day after such date;

                  (4)      the Company has delivered to the Trustee an Opinion
         of Counsel to the effect that the Holders of the Securities of that
         series will not recognize income, gain or loss for federal income tax
         purposes as a result of such deposit or the elimination of the
         Company's obligations to comply with the terms and provisions as
         contemplated above 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 elimination of the Company's
         obligations to comply as contemplated above had not occurred;

                  (5)      if the Securities of that series are then listed on
         the New York Stock Exchange, Inc., the Company shall have delivered to
         the Trustee an Officers' Certificate to the effect that such deposit
         and elimination of the Company's obligations to comply as contemplated
         above will not cause such Securities to be delisted;

                  (6)      the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent provided for relating to the defeasance and elimination of
         the Company's obligations to comply as contemplated above have been
         complied with;

                  (7)      such deposit and defeasance shall not cause the
         Trustee to have a conflicting interest within the meaning of the Trust
         Indenture Act; and

                  (8)      such deposit and defeasance shall not result in the
         trust arising from such deposit constituting an investment company
         within the meaning of the Investment Company Act of 1940, as amended,
         unless such trust shall be qualified under such Act or exempt from
         regulation thereunder.

Section 405       Reinstatement

         If the Trustee or any Paying Agent is unable to apply any money from
any deposit under Section 403 or 404 in accordance with Section 402(a) with
respect to the Securities of the series entitled thereto by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations under
this Indenture and such Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 403 or 404 with respect to such
Securities until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 402(a) with respect to such
Securities in accordance with Section 402(a); provided, however, that if the
Company makes any payment of principal of or any interest on any such Security
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money so held in trust.

                                       28
<PAGE>

                                  ARTICLE FIVE

                                    REMEDIES

Section 501       Events of Default

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

                  (1)      default in the payment of any interest upon any
         Security of that series when it becomes due and payable, and
         continuance of such default for a period of 30 days; or

                  (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 deposit of any sinking fund payment,

         when and as due by the terms of a Security of that series; or

                  (4)      default in the performance, or breach, of any
         covenant or warranty of the Company 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 60 days after there has been given,
         by registered or certified mail, to the Company by the Trustee or to
         the Company 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)      a default under any bond, debenture, note or other
         evidence of indebtedness for money borrowed by the Company or any
         Principal Subsidiary of the Company having an aggregate principal
         amount outstanding in excess of an amount equal to 3% of Consolidated
         Net Tangible Assets or under any mortgage, indenture or instrument
         under which there may be issued or by which there may be secured or
         evidenced any indebtedness for money borrowed by the Company or any
         Principal Subsidiary of the Company having an aggregate principal
         amount outstanding in excess of an amount equal to 3% of Consolidated
         Net Tangible Assets, whether such indebtedness now exists or shall
         hereafter be created, which default shall constitute a failure to pay
         any portion of the principal of such indebtedness when due and payable
         after the expiration of any applicable grace period with respect
         thereto (which grace period, if such portion of the principal is less
         than an amount equal to 1% of Consolidated Net Tangible Assets in the
         aggregate, shall be deemed to be no less than 5 days) or shall have
         resulted in such indebtedness becoming or being declared due and
         payable prior to the date on which it would otherwise have become due
         and payable, without such indebtedness having been discharged, or such
         acceleration having been rescinded or annulled, within a period of 10
         days after there shall have been given, by registered or certified
         mail, to the Company by the Trustee or to the Company and the Trustee
         by the Holders of at least 25 % in principal amount of the Outstanding
         Securities a written notice specifying such default and requiring the
         Company to cause such indebtedness to be discharged or cause such
         acceleration to be rescinded or annulled and stating that such notice
         is a "Notice of Default" hereunder; or

                                       29
<PAGE>

                  (6)      the entry by a court having jurisdiction in the
         premises of (A) a decree or order for relief in respect of the Company
         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 a bankrupt or insolvent, or
         approving as properly filed a petition seeking reorganization,
         arrangement, adjustment or composition of or in respect of the Company
         under any applicable Federal or State law, or appointing a custodian,
         receiver, liquidator, assignee, trustee, sequestrator or other similar
         official of the Company or of any substantial part of its property, or
         ordering the winding up or liquidation of its affairs, and the
         continuance of any such decree or order for relief or any such other
         decree or order unstayed and in effect for a period of 60 consecutive
         days; or

                  (7)      the commencement by the Company 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 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 other similar
         official of the Company or of any substantial part of its property, 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 in
         furtherance of any such action; or

                  (8)      any other Event of Default provided with respect to
         Securities of that series.

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 any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (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.

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

                  (1)      the Company 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,

                                       30
<PAGE>

                           (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 interest on any
         Security when such interest becomes due and payable and such default
         continues for a period of 30 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 any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

         If the 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 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 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 o: 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 Proof of Claim

         In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in

                                       31
<PAGE>

order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.

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

Section 505       Trustee May Enforce Claims Without Possession of Securities

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

Section 506       Application of Money Collected

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

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

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

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,
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;

                                       32
<PAGE>

                  (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
         reasonable indemnity 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 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 any availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders, or to obtain or seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all of such Holders.

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

         Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307)
any 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.

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 Trustee and the Holder shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holder 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.

                                       33
<PAGE>

Section 511       Delay or Omission Not Waiver

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

Section 512       Control by Holders

         The Holders of a majority in 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 that

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

                  (2)      such Holder or Holders provide the Trustee an
         indemnity reasonably satisfactory to the Trustee against any loss,
         liability or expense, and

                  (3)      the Trustee may take any other action deemed proper
         by the Trustee which is not inconsistent with such direction.

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 a default

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

                  (2)      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.

         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

         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, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess cost against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act, provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.

                                       34
<PAGE>

Section 515       Waiver of Stay or Extension Laws

         The Company 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 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 the Company (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 SIX

                                   THE TRUSTEE

Section 601       Certain Duties and Responsibilities

         The duties and responsibilities of the Trustee shall be provided by the
Trust Indenture Act and this Indenture. Notwithstanding the foregoing, 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. 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.

         The Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture with respect to Securities of such
series, and no implied covenants or obligations shall be read into this
Indenture against the Trustee with respect to such series.

Section 602       Notice of Defaults

         If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, 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 30 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 rely and shall be protected in acting
         or refraining from acting upon any resolution, certificate, statement,
         instrument, opinion, report, notice, request, direction, consent,
         order, bond, debenture, note, other evidence of indebtedness or other
         paper or document believed by it to be genuine and to have been signed
         or presented by the proper party or parties;

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

                                       35
<PAGE>

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

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

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

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

                  (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.

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
608 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 with the Company.

                                       36
<PAGE>

Section 607       Compensation and Reimbursement

         The Company agrees

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

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

                  (3)      to indemnify the Trustee and its officers, directors,
         employees and agents for, and to hold them harmless against, any loss,
         liability or expense incurred without negligence or bad faith 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 any of them against any claim or liability in
         connection with the exercise or performance of any of its powers or
         duties hereunder.

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

         When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Article 5, the expenses (including the
reasonable fees and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable bankruptcy, insolvency or other similar law. The obligations of the
Company set forth in this Section 607 and any lien arising hereunder shall
survive the resignation or removal of any Trustee.

         In the event that the Trustee is also acting as Paying Agent or
Transfer Agent and Security Registrar hereunder, the rights and protections
afforded to the Trustee pursuant to this Article 6 shall also be afforded to
such Paying Agent or Transfer Agent and Security Registrar.

Section 608       Disqualification; Conflicting Interests

         If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.

Section 609       Corporate Trustee Required; Eligibility

            There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $25,000,000 and its Corporate
Trust Office, or an office or agency thereof, in Dallas, Texas or in The City of
New York. If such Person 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 Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance

                                       37
<PAGE>

with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.

Section 610       Resignation and Removal; Appointment of Successor

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

         (b)      The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. 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 for the appointment of a successor Trustee with
respect to the Securities of such series.

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

         (d)      If at any time:

                  (1)      the Trustee shall fail to comply with Section 608
         after written request therefor by the Company or by any Holder who has
         been a bona fide Holder of a Security for at least six months, or

                  (2)      the Trustee shall cease to be eligible under Section
         609 and shall fail to resign after written request therefor by the
         Company 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 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 itself 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, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company 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

                                       38
<PAGE>

supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company 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 itself 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
to all Holders of Securities of such series in the manner provided in Section
106. 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.

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

                                       39
<PAGE>

         (c)      Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraphs (a) and (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.

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

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

Section 614       Appointment of Authenticating Agent

         The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and 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 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 $25,000,000 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 the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such

                                       40
<PAGE>

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. 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. 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 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 Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.

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

         This is one of the Securities of the series designated therein referred
to in the withinmentioned Indenture.

                                   THE CHASE MANHATTAN BANK, N.A.,
                                   As Trustee

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

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

                                  ARTICLE SEVEN

                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 later than 15 days after each Regular
Record Date for each series of Securities at the time Outstanding, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders as of such Regular Record Date (or a date to be determined pursuant
to Section 301 for Original Issue Discount Securities); and

                                       41
<PAGE>

         (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 for so long as the Trustee is
the Security Registrar for any Series, no such list need be furnished with
respect to such Series.

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)      The rights of the Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and privileges of the Trustee, shall be as provided by
the Trust Indenture Act.

         (c)      Every Holder of Securities, by receiving and holding 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 any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.

Section 703       Reports by Trustee

         (a)      The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant thereto
within 60 days after July 1 of each year commencing July 1, 1996.

         (b)      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 Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.

                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

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

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

                                       42
<PAGE>

any Person to consolidate with or merge into the Company or convey, transfer or
lease its properties and assets substantially as an entirety to the Company,
unless:

         (1)      in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation 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 (for purposes of this Article Eight, a
"Successor Company") shall be a corporation, partnership or trust, shall be
organized and validly 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 or observance of every
covenant of this Indenture on the part of the Company to be performed or
observed;

         (2)      immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or a
Principal Subsidiary of the Company as a result of such transaction as having
been incurred by the Company or such Principal Subsidiary at the time of 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 happened and be
continuing;

         (3)      if, as a result of any such consolidation or merger of such
conveyance, transfer or lease, properties or assets of the Company or any
Principal Subsidiary of the Company would become subject to a Lien which would
not be permitted by this Indenture, the Company or if applicable the Successor
Company, as the case may be, shall take such steps as shall be necessary
effectively to secure the Securities equally and ratably with (or prior to) all
Debt secured by such Lien; and

         (4)      the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
complies 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 with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company 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 under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.

                                       43
<PAGE>

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

Section 901       Supplemental Indentures Without Consent of Holders

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

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

                  (2)      to add to the covenants of the Company for the
         benefit of the Holders of all of or any series of Securities (and if
         such covenants 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

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

                  (4)      to add to or change 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
         to permit or facilitate the issuance of Securities in uncertificated
         form; or

                  (5)      to add to, change or eliminate any of the provisions
         of this Indenture in respect of one or more series of Securities,
         provided that any such addition, change or elimination (i) shall
         neither (A) apply to any Security of any series created prior to the
         execution of such supplemental indenture and entitled to the benefit of
         such provision nor (B) modify the rights of the Holder of any such
         Security with respect to such provision or (ii) shall become effective
         only when there is no such Security Outstanding; or

                  (6)      to secure the Securities pursuant to the requirements
         of Section 1007 or otherwise; or

                  (7)      to establish the form or terms of Securities of any
         series as permitted by Section 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 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 this Indenture, provided that such action
         pursuant to this clause (9) shall not adversely affect the interests of
         the Holders of Securities of any series in any material respect.

Section 902       Supplemental Indentures with Consent of Holders

                                       44
<PAGE>

         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 and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders 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 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, Section
         513 or Section 1010, 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 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 and Section 1010, 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 provisions, 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.

Section 903       Execution of Supplement Indentures

         In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Article 6) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

                                       45
<PAGE>

Section 904       Effect of Supplemental Indentures

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

Section 905       Conformity with Trust Indenture Act

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

Section 906       Reference in Securities to Supplemental Indentures

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

                                   ARTICLE TEN

                                    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 any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.

Section 1002      Maintenance of Office or Agency

         The Company will maintain in each 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 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.

                                       46
<PAGE>

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 or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

         Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.

         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 (i) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the mailing of any payment in respect of the
Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series. The Company may at any
time, for the purpose of obtaining 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.

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

Section 1004      Existence

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

                                       47
<PAGE>

Section 1005      Maintenance of Properties

         The Company will cause all properties used or useful in the conduct of
its business or the business of any Principal Subsidiary of the Company to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company desirable in the conduct of
its business or the business of any Principal Subsidiary of the Company and not
disadvantageous in any material respect to the Holders.

Section 1006      Payment of Taxes and Other Claims

         The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.

Section 1007      Limitation on Liens

         (a)      The Company shall not, and shall not permit any Principal
Subsidiary of the Company to, incur or suffer to exist any Lien upon any
Principal Property, or upon any shares of stock of any Principal Subsidiary of
the Company (whether such Principal Property or shares are now owned or
hereafter acquired), to secure any Debt without making, or causing such
Principal Subsidiary to make, effective provision for securing the Securities
(and no other indebtedness of the Company or any Principal Subsidiary of the
Company except, if the Company shall so determine, any other indebtedness of the
Company which is not subordinate in right of payment to the Securities or of
such Principal Subsidiary) (x) equally and ratably with such Debt as to such
Principal Property or shares for as long as such Debt shall be so secured unless
(y) such Debt is Debt of the Company which is subordinate in right of payment to
the Securities, in which case prior to such Debt as to such Principal Property
or shares for as long as such Debt shall be so secured.

         The foregoing restrictions will not apply to Liens existing at the date
of this Indenture or to:

                  (i)      Liens securing only the Securities;

                  (ii)     Liens in favor of only the Company;

                  (iii)    Liens on property of a Person existing at the time
         such Person is merged into or consolidated with the Company or any
         Principal Subsidiary of the Company (but only to the extent such Liens
         cover such property);

                  (iv)     Liens on property existing immediately prior to the
         time of acquisition thereof (and not in anticipation of the financing
         of such acquisition);

                                       48
<PAGE>

                  (v)      any Lien upon a Principal Property (including any
         property that becomes a Principal Property after acquisition thereof)
         to secure Debt incurred for the purpose of financing all or any part of
         the purchase price or the cost of construction or improvement of the
         property subject to such Lien; provided, however, that (A) the
         principal amount of any Debt secured by such Lien (1) does not exceed
         100% of such purchase price or cost and (2) is incurred not later than
         six months after such purchase or the completion of such construction
         or improvement, whichever is later, and (B) such Lien does not extend
         to or cover any other property other than such item of property and any
         improvements on such item;

                  (vi)     Liens to secure Debt incurred to extend, renew,
         refinance or refund (or successive extensions, renewals, refinancings
         or refundings), in whole or in part, Debt secured by any Lien referred
         to in the foregoing Clauses (i) to (v) as long as such Lien does not
         extend to any other property and the original amount of the Debt so
         secured in not increased; and

                  (vii)    any Lien securing Debt owing by the Company to a
         wholly owned Principal Subsidiary of the Company (provided that such
         Debt is at all times held by a person which is a wholly owned Principal
         Subsidiary of the Company); provided, however, that for purposes of
         this Section 1007 and 1008 hereof, upon either (A) the transfer or
         other disposition of a Debt secured by a Lien so permitted to a Person
         other than the Company or another wholly owned Principal Subsidiary of
         the Company or (B) the issuance, sale, lease, transfer or other
         disposition of shares of capital stock of any such wholly owned
         Principal Subsidiary to a Person other than the Company or another
         wholly owned Principal Subsidiary of the Company, the provisions of
         this Clause (vii) shall no longer be applicable to such Lien and such
         Lien shall be subject (if otherwise subject) to the requirements of
         this Section 1007 without regard to this Clause (vii).

         (b)      In addition to the foregoing, the Company and its Principal
Subsidiaries may incur and suffer to exist a Lien to secure any Debt or enter
into a Sale and Leaseback Transaction without equally and ratably securing the
Securities if, after giving effect thereto, the sum of (i) the principal amount
of Debt secured by all Liens incurred after the date of this Indenture and
otherwise prohibited by this Indenture and (ii) the Attributable Debt of all
Sale and Leaseback Transactions entered into after the date of this Indenture
and otherwise prohibited by this Indenture does not exceed 10% of the
Consolidated Net Tangible Assets of the Company.

         (c)      If the Company shall hereafter be required under this Section
1007 to make (or cause to be made) effective provision for securing the
Securities, then (i) the Company will promptly deliver to the Trustee an
Officers' Certificate and Opinion of Counsel stating that this Section 1007 has
been complied with and that any instruments executed by the Company or any
Principal Subsidiary of the Company in the performance of this Section 1007
shall comply with the requirements hereof, and (ii) the Trustee is hereby
authorized to enter into an indenture or agreement supplemental hereto and to
take such action, if any, as it may deem advisable to enable it to enforce the
rights of the Holders of the Securities as so secured.

Section 1008      Limitation on Sale and Leaseback Transactions

         The Company shall not, and shall not permit any Principal Subsidiary of
the Company to, enter into any Sale and Leaseback Transaction (except for a
period not exceeding 36 months) unless:

                  (1)      The Company or such Principal Subsidiary would be
         entitled to enter into such Sale and Leaseback Transaction pursuant to
         the provisions of Section 1007(b) hereof without equally and ratably
         securing the Securities; or

                                       49
<PAGE>

                  (2)      The Company or such Principal Subsidiary applies or
         commits to apply, within 270 days before or after the Sale Transaction
         pursuant to such Sale and Leaseback Transaction, an amount equal to the
         Net Available Proceeds therefrom to any combination of the following:
         (i) the repayment of Funded Debt, (ii) the purchase of other property
         which will constitute Principal Property that has an aggregate value of
         at least the consideration paid therefor or (iii) Capital Expenditures
         with respect to any Principal Property; provided that the amount to be
         applied or committed to the repayment of such Funded Debt shall be
         reduced by (a) the principal amount of any Securities delivered within
         six months before or after such Sale Transaction to the Trustee for
         retirement and cancellation, and (b) the principal amount of such
         Funded Debt as is voluntarily retired by the Company within six months
         before or after such Sale Transaction (it being understood that no
         amount so applied or committed and no Securities so delivered or
         indebtedness so retired may be counted more than once for such
         purpose); provided, further, that no repayment or retirement referred
         to in this Clause (2) may be effected by payment at maturity or
         pursuant to any mandatory sinking fund payment or any mandatory
         prepayment provision.

Section 1009      Statement of Officers as to Default

         The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

Section 1010      Waiver of Certain Covenants

         The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1007 and 1008 with respect to
the Securities of any series if before the time for such compliance the Holders
of at least a majority in principal amount of the Outstanding Securities of such
series 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 duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.

Section 1011      SEC Reports

         The Company shall deliver to the Trustee within 15 days after it files
the same with the Commission, copies of all reports and information (or copies
of such portions of any of the foregoing as the Commission may by rules and
regulations prescribe), if any, which the Company is required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act.

Section 1012      Limitation on Funded Debt of Principal Subsidiaries

         (a)      The Company shall not permit any Principal Subsidiary to incur
or assume any Funded Debt if, immediately after the incurrence or assumption of
such Funded Debt, the aggregate outstanding principal amount of all Funded Debt
(other than Funded Debt of a Principal Subsidiary to the Company or directly or
indirectly wholly owned Subsidiary) of Principal Subsidiaries exceeds thirty
percent (30%) of Consolidated Tangible Net Worth. Notwithstanding the foregoing,
any Principal Subsidiary may incur Funded Debt (i) payable to the Company or to
another Principal Subsidiary, (ii) secured by Liens permitted pursuant to
Section 1007(a)(i) through (vii), or (iii) to extend, renew or replace Funded
Debt of

                                       50
<PAGE>

such Principal Subsidiary, provided that the principal amount of the Funded Debt
so incurred pursuant to this clause (iii) does not exceed the principal amount
of the Funded Debt extended, renewed or replaced thereby immediately prior to
such extension, renewal or replacement plus any premium, accrued and unpaid
interest or capitalized interest payable thereon.

         (b)      Any corporation which becomes a Principal Subsidiary after the
date hereof shall for all purposes of this Section 1012 be deemed to have
created, assumed or incurred at the time it becomes a Principal Subsidiary all
Funded Debt of such corporation existing immediately after it becomes a
Principal Subsidiary.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

Section 1101      Applicability of Article

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

Section 1102      Election to Redeem; Notice to Trustee

         The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution or by action taken pursuant to a Board Resolution. 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 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.

Section 1103      Selection by Trustee of Securities to Be Redeemed

         If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 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. If less than
all of the Securities of such series and of a specified tenor are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.

         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.

                                       51
<PAGE>

         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 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at such Holder's address
appearing in the Security Register.

         All notices of redemption shall state:

                  (1)      the Redemption Date,

                  (2)      the Redemption Price,

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

                  (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 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 as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor

                                       52
<PAGE>

Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.

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

Section 1107      Securities Redeemed in Pan

         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 such
Holder's attorney duly authorized in writing), and the Company shall execute,
and the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series and of
like tenor, of any authorized denomination as required by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.

                                 ARTICLE TWELVE

                                  SINKING FUNDS

Section 1201      Applicability of Article

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

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

Section 1202      Satisfaction of Sinking Fund Payments with Securities

         The 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.

                                       53
<PAGE>

Section 1203      Redemption of Securities for Sinking Fund

         Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 and not more than 60 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.

         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, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

                                           COMMERCIAL METALS COMPANY

                                           By: /s/ Stanley A. Rabin
                                               Name: Stanley A. Rabin
                                               Title: __________________________

Attest:

/s/ David M. Sudbury

                                           THE CHASE MANHATTAN BANK, N.A.,
                                              AS TRUSTEE

                                           By: /s/ C. J. Heinzelmann
                                               Name: C. J. Heinzelmann
                                               Title: Vice President
Attest:

                                       54

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