Document:

<PAGE>

                                                                     Exhibit 4.3

     Security Agreement dated September 14, 2000 by and among Interfoods of
     America, Inc., Sailormen, Inc. and American Commercial Capital LLC. (all
     schedules and exhibits have been omitted other than the schedule of defined
     terms; such omitted schedules and exhibits will be furnished upon request)

                              SECURITY AGREEMENT
                                    made by

                  SAILORMEN, INC., a Florida corporation and
               INTERFOODS OF AMERICA, INC., a Nevada corporation
                            collectively, as Debtor
                                  in favor of
                       AMERICAN COMMERCIAL CAPITAL LLC,
       a Delaware limited liability company, its successors and assigns,
                               as Secured Party
                      Effective as of September 14, 2000

                               Loan No.: 00 0891
                                 Pod No.: 001

SECURITY AGREEMENT
                            INFORMATION CERTIFICATE
                            -----------------------
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
Loan Reference No.:                                          00 0891, Pod No.: 001
---------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>
Debtor:                                                      SAILORMEN, INC., a Florida corporation
                                                             and INTERFOODS OF AMERICA, INC., a
                                                             Nevada corporation
---------------------------------------------------------------------------------------------------------------------
Initial Principal Amount (Pod Note):                         $19,568,000.00
---------------------------------------------------------------------------------------------------------------------
Debtor Trade Name(s):                                        Popeyes Chicken and Biscuits
---------------------------------------------------------------------------------------------------------------------
Debtor Taxpayer I.D. No.:                                    59-2355214 and 59-3356011, respectively
---------------------------------------------------------------------------------------------------------------------
Debtor Social Security No.:                                  N/A
---------------------------------------------------------------------------------------------------------------------
Brand:                                                       Popeyes
---------------------------------------------------------------------------------------------------------------------
Brand Owner:                                                 AFC Enterprises, Inc.
---------------------------------------------------------------------------------------------------------------------
Principal Agreements:                                        See Schedule 11 attached hereto.
---------------------------------------------------------------------------------------------------------------------
Addresses of Unit:                                           See Exhibit A
---------------------------------------------------------------------------------------------------------------------
Counties of Unit:                                            See Exhibit A
---------------------------------------------------------------------------------------------------------------------
Debtor Chief Executive Office Addresses:                     9400 S. Dadeland Blvd., Suite 720, Miami,
                                                             Florida 33156
---------------------------------------------------------------------------------------------------------------------
Debtor Chief Executive Office County:                        Miami-Dade County
---------------------------------------------------------------------------------------------------------------------
Units Owned or Leased:                                       See Exhibit A
---------------------------------------------------------------------------------------------------------------------
Record Owners:                                               See Exhibit A
---------------------------------------------------------------------------------------------------------------------
Key Individuals ((S) 2.13)                                   Robert S. Berg and Steven M. Wemple
---------------------------------------------------------------------------------------------------------------------
Control Persons ((S) 2.26)                                   Robert S. Berg and Steven M. Wemple
---------------------------------------------------------------------------------------------------------------------
Minimum Debtor FCCR ((S) 2.14)                               1.10
---------------------------------------------------------------------------------------------------------------------
Target Debtor FCCR ((S) 2.14)                                1.30
---------------------------------------------------------------------------------------------------------------------
Minimum CU FCCR ((S) 2.14)                                   1.10
---------------------------------------------------------------------------------------------------------------------
Target CU FCCR ((S) 2.14)                                    1.30
---------------------------------------------------------------------------------------------------------------------
Minimum Unit FCCR ((S) 2.14)                                 1.10
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                   Debtors' Initials: __________
                                                               (Sailormen, Inc.)

                                                                      __________
                                                   (Interfoods of America, Inc.)
<PAGE>

SECURITY AGREEMENT

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                                  <C>
1    GRANT........................................................................................   1

2    REPRESENTATIONS, WARRANTIES AND COVENANTS....................................................   1
     2.1     Name.................................................................................   2
     2.2     Business and Location................................................................   2
     2.3     Real Property Rights.................................................................   2
     2.4     No Subsidiaries; Scheduled Affiliates................................................   2
     2.5     No Change............................................................................   2
     2.6     Organization.........................................................................   3
     2.7     Power and Authority..................................................................   3
     2.8     Execution and Enforceability.........................................................   3
     2.9     Financing Statements; Perfected Security Interest....................................   3
     2.10    No Conflict..........................................................................   3
     2.11    No Consent or Other Action Required..................................................   4
     2.12    Purpose for Loans....................................................................   4
     2.13    Operating Experience.................................................................   4
     2.14    Financial Coverages..................................................................   4
     2.15    Limitation on Indebtedness, Realty and Personalty Charges, and Payments to
             Affiliates...........................................................................   5
     2.16    Title; Sufficiency; No Liens.........................................................   5
     2.17    No Further Disposition...............................................................   6
     2.18    Principal Agreements.................................................................   6
     2.19    Renewal of Principal Agreements......................................................   6
     2.20    Maintenance of Collateral; Business..................................................   7
     2.21    Insurance............................................................................   7
     2.22    Casualty and Condemnation............................................................   7
     2.23    Compliance with Laws; Consents and Other Action; No Violation; Indemnity.............   9
     2.24    Tax Returns..........................................................................   9
     2.25    Litigation...........................................................................   10
     2.26    Capitalization; Solvency.............................................................   10
     2.27    Distributions and Redemptions........................................................   11
     2.28    Transactions with Affiliates.........................................................   11
     2.29    Banks; Payments......................................................................   11
     2.30    Costs and Expenses...................................................................   12
     2.31    Brokers and Financial Advisors.......................................................   12
     2.32    Compliance Certificates; Reports; Communications.....................................   12
     2.33    Accuracy of Information; Reasonable Assumptions......................................   13
     2.34    Bring Down of Representations; Survival of Warranties; Cumulative....................   14
     2.35    Notice of Material Adverse Changes...................................................   14
     2.36    Reports, Budgets, Forecasts..........................................................   14
</TABLE>

                                      ii
<PAGE>

<TABLE>
<S>                                                                                                        <C>
 3.  SPECIAL PROVISIONS ON EQUIPMENT; INSPECTION RIGHTS
     3.1 Equipment Covenants. With respect to the Equipment..............................................  15
     3.2 Inspection; Access to Premises..................................................................  15
 4   SPECIAL PROVISIONS CONCERNING COLLATERAL REVENUES...................................................  16

 5  SPECIAL PROVISIONS CONCERNING RIGHTS AND DUTIES WHILE IN POSSESSION OF COLLATERAL....................  17
     5.1 Debtor's Possession.............................................................................  17
     5.2 Secured Party's Possession......................................................................  17

 6   EVENTS OF DEFAULT...................................................................................  18
     6.1 Debtor Default..................................................................................  18
     6.2 Scheduled Affiliate Default.....................................................................  19
     6.3 Other Defaults of Debtor and Other Liable Parties...............................................  19

 7   REMEDIES............................................................................................  19
     7.1    Cumulative Rights and Remedies...............................................................  19
     7.2    Acceleration of Obligations..................................................................  20
     7.3    Additional Rights of Secured Party...........................................................  20
     7.4    Application of Proceeds; Deficiency..........................................................  21
     7.5    Required Notice of Sale......................................................................  22

 8   RIGHT TO CURE; POST-DEFAULT POWER OF ATTORNEY.......................................................  22
     8.1 Right to Cure...................................................................................  22
     8.2 Power of Attorney...............................................................................  22

 9   DISCLOSURE..........................................................................................  23

10   INDEMNIFICATION.....................................................................................  23

11   OBLIGATIONS AND SECURITY INTEREST ABSOLUTE..........................................................  24

12   ASSIGNMENT; SUBSTITUTION OF COLLATERAL..............................................................  25
     12.1 Assignment.....................................................................................  25
     12.2 Substitution of Collateral.....................................................................  25

13   FURTHER ASSURANCES..................................................................................  26

14   TERM................................................................................................  27
15   MISCELLANEOUS.......................................................................................  27
     15.1 FINAL AGREEMENT; Amendments, Consents, Authorizations..........................................  27
     15.2 Notices........................................................................................  28
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>                                                                                                   <C>
15.3  Reasonableness................................................................................  28
15.4  Recovery of Sums Required To Be Paid..........................................................  29
15.5  WAIVERS.......................................................................................  29
15.6  GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF TRIAL BY JURY...............................  29
15.7  Waiver of Notices.............................................................................  30
15.8  Relationship..................................................................................  31
15.9  Waiver of Counterclaims.......................................................................  31
15.10 No Conflict with Principal Agreements.........................................................  31
15.11 Time is of the Essence........................................................................  31
15.12 LIMITATION OF INTEREST........................................................................  31
15.13 Binding Effect; Jurisdiction; Summary Judgment................................................  32
15.14 Severability..................................................................................  33
15.15 Counterparts; Captions; Construction..........................................................  33
15.16 Exhibits and Schedules........................................................................  34
15.17 Cross-Default; Cross-Collateralization........................................................  34
15.18 Cooperation...................................................................................  34
15.19 Public Announcement...........................................................................  35
15.20 Re-Imaging Requirements.......................................................................  35
15.21 RMS Note - Sinking Fund Requirements..........................................................  36
15.22 Liquidity Requirement.........................................................................  36
</TABLE>

                                      iv
<PAGE>

SCHEDULES LIST
--------------

DEFINITIONS SCHEDULE (Introduction)
INFORMATION CERTIFICATE ((S)(S) 2.1, 2.2, 2.3 and 2.26)
SCHEDULE I MERGERS, CONSOLIDATIONS, ACQUISITIONS ((S) 2.1)
SCHEDULE 2 OTHER BUSINESSES ((S)(S) 2.2 and 2.5)
SCHEDULE 3 SCHEDULED AFFILIATES ((S) 2.4)
SCHEDULE 4 FILING OFFICES ((S)(S) 2.9 and 5.13)
SCHEDULE 5 PERMITTED ENCUMBRANCES ((S) 2.16)
SCHEDULE 6 CONSENTS AND OTHER ACTION ((S) 2.23)
SCHEDULE 7 LITIGATION ((S) 2.25)
SCHEDULE 8 BANKS ((S)(S) 2.29,2.30, and 4)
SCHEDULE 9 BROKERS AND FINANCIAL ADVISORS ((S) 2.3 1)
SCHEDULE 10 UCC FILINGS ((S) 2.16)
SCHEDULE 11 PRINCIPAL AGREEMENTS ((S)(S) 2.18 and 2.19)
SCHEDULE 12 MISSING CONSENTS OR OTHER ACTIONS ((S) 2.11)
SCHEDULE 13 RE-IMAGING UNITS

EXHIBITS LIST
-------------

EXHIBIT A Legal Description/Address and other Property Unit Information
EXHIBIT B Insurance Requirements ((S) 2.21)
EXHIBIT C Compliance Certificate ((S) 2.32)

                                       v
<PAGE>

SECURITY AGREEMENT

     THIS SECURITY AGREEMENT ("Security Agreement") is dated as of September 14,
                               ------------------
     2000, and is made by SAILORMEN, INC., a Florida corporation and INTERFOODS
     OF AMERICA, INC., a Nevada corporation, as debtor (if more than one Person,
     collectively and jointly and severally, "Debtor"), in favor of AMERICAN
                                              ------
     COMMERCIAL CAPITAL LLC, a Delaware limited liability company, as secured
     party subject to Section 12 hereof ("Secured Party").
                                          -------------

     The terms used herein (whether or not capitalized) have the meanings
accorded such terms in the text hereof, in the INFORMATION CERTIFICATE and in
the DEFINITIONS SCHEDULE attached hereto and made a part hereof and, to the
extent not inconsistent therewith, the UCC. Debtor has requested that Secured
Party make the Loan to Debtor and Debtor has agreed to evidence such Loan by
executing and delivering to Secured Party a Note, dated the date thereof, made
payable to Secured Party in the original principal amount set forth therein and
for the term and on the terms and conditions set forth therein. As a condition
to the making of the Loan, Secured Party has requested and Debtor has agreed,
among other things, to Grant Secured Party a Lien in the Collateral. In
consideration of the foregoing, the benefits accruing to Debtor and for other
good and valuable consideration, the receipt and sufficiency of which Debtor
hereby acknowledges, Debtor hereby makes the following representations and
warranties to Secured Party and covenants and agrees with Secured Party as
follows:

I    GRANT.

To secure the Debtor's obligations under and in connection with the Loan
Documents and the Obligations, Debtor hereby Grants to Secured Party a
continuing security interest and Lien on and with respect to the Collateral
(including the Principal Agreements but only as provided in the next sentence
below), whether now owned and existing or hereafter acquired or arising; all
additions and accessions thereto, substitutions therefor and replacements and
improvements of or to any or all of the foregoing; and all products and Proceeds
of the foregoing. In the event and to the extent that any Debtor now or
hereafter may Grant a security interest in or other Lien on its rights under any
Principal Agreement without Conflicting with such Principal Agreement, either
because the terms of such Principal Agreement do not restrict such Grant, or
each of the other parties thereto has consented to such Grant or applicable Law
permits such Grant, or for any other reason, then Debtor hereby Grants to
Secured Party such Lien in such Principal Agreements, whether now owned or
hereafter acquired, and all Proceeds thereof.

2    REPRESENTATIONS, WARRANTIES AND COVENANTS.

Debtor hereby represents, warrants and covenants and agrees that:

                                       1
<PAGE>

2.1  Name.

Each of Debtor's legal name, federal taxpayer identification number, and mailing
address is accurately set forth on the INFORMATION CERTIFICATE. Except as
disclosed on SCHEDULE 1, Debtor has not merged, consolidated, acquired all or
substantially all of the assets of any Person or used any other name (whether in
connection with the Business or the Collateral or for business, obtaining credit
or financing or otherwise) in the last six years.

2.2  Business and Location.

Under its legal name, Debtor is and shall continue to be engaged in the Business
under the Brand pursuant to the Principal Agreements at the Unit with the
address set forth on the INFORMATION CERTIFICATE. SCHEDULE 2 contains and will
continue to contain a complete and accurate list of businesses, if any,
conducted by Debtor other than its Business. Debtor's chief executive office
address is accurately set forth on the INFORMATION CERTIFICATE. All Collateral,
including all writings relating thereto and records thereof, books of record or
account, employees, business, offices and operations are located at and
conducted out of such Unit or Debtor's chief executive office.

2.3  Real Property Rights.

The INFORMATION CERTIFICATE correctly discloses either that Debtor (i) is the
sole record owner of the Property or (ii) leases (or subleases) the Property and
the record owner of the Property is the person or entity disclosed on the
INFORMATION CERTIFICATE.

2.4  No Subsidiaries; Scheduled Affiliates.

Except for Sailormen, Inc. being a wholly owned subsidiary of Interfoods of
America, Inc., and otherwise as disclosed on SCHEDULE 3, Debtor does not have
any subsidiaries on the date hereof and shall not, during the term hereof, have
any subsidiaries without prior notice to and written consent of Secured Party
which consent may be withheld in Secured Party's Sole Discretion. SCHEDULE 3
contains and will continue to contain a complete and accurate list of all of
Debtor's Affiliates who have executed and delivered any Loan Document
("Scheduled Affiliate").
  ---------

2.5  No Change.

Debtor will neither change its name, federal taxpayer identification number, or
its chief executive office location, nor assume a different name, nor conduct
its business or affairs under any other name without providing Secured Party
with 60 days prior written notice thereof. Debtor will neither change the
location of any of its Business, the Unit or Collateral, nor merge, consolidate,
or change its structure (whether by equity sale, issuance, purchase or
otherwise), nor change its use of any item of Collateral during the term hereof,
except as otherwise permitted in Section 12.2 herein below.

                                       2
<PAGE>

With the exception of the businesses listed on SCHEDULE 2, Debtor will not
engage in any business or activities other than the Business during the term
hereof

2.6  Organization.

Debtor is and will continue to be duly organized, validly existing and in good
standing under the laws of the state of its organization. Debtor is and will
continue to be duly qualified to do business and is in good standing in each
jurisdiction where it conducts its Business and where the Unit or the Collateral
is located.

2.7  Power and Authority.

(i) Debtor has full power, authority and the 1,~gal right to own the Collateral
and to conduct its Business, and (ii) Debtor (and in the case of Loan Documents
executed by Debtor's Scheduled Affiliates, each such Affiliate) has full power,
authority and the legal right to execute, deliver and perform its obligations
under the Loan Documents.

2.8  Execution and Enforceability.

The Loan Documents have been duly and validly executed and delivered by Debtor
(and in the case of Loan Documents executed by Debtor's Scheduled Affiliates, by
each such Affiliate). Each Loan Document constitutes Debtor's (and in the case
of Loan Documents executed by Debtor's Scheduled Affiliates, each such
Affiliate) legal, valid and binding obligation, enforceable against Debtor (or
such Affiliate) in accordance with its terms.

2.9  Financing Statements; Perfected Security Interest.

The Debtor (and any other Person named as debtor herein) has duly executed the
Financing Statements. The execution and delivery of this Security Agreement and
the Grant hereunder creates a valid Lien in the Collateral which has attached
and is enforceable. The filing offices set forth on SCHEDULE 4 ("Filing
                                                                 ------
Offices") and made a part hereof are the only offices where financing statements
-------
are required to be filed in order to perfect such security interest in all
Filing Collateral. The Secured Party's Lien in all Filing Collateral is a first
priority perfected security interest except for the Permitted Encumbrances as
such term is defined in Section 2.16 below. Upon delivery into Secured Party's
possession of Collateral other than Filing Collateral, Secured Party's Lien
therein will be a first priority perfected security interest.

2.10 No Conflict.

Each of Debtor's and Scheduled Affiliate's execution and delivery of, and
consummation of the transactions contemplated by the Loan Documents do not and
will not (with the passage of time, notice or otherwise) (i) Conflict with any
Organizational Document, Contractual Obligation or

                                       3
<PAGE>

Requirement of Law of or applicable to Debtor or such Scheduled Affiliate or the
Collateral or (ii) grant, create or result in any Lien in favor of any Person
(other than Secured Party as contemplated hereby) on or to Debtor's Business,
property or assets (including the Collateral and the Principal Agreements).

2.11 No Consent or Other Action Required.

Except for the filing of the Financing Statements with the Filing Offices (and
the recording of the Deeds to Secure Debt or Mortgages (whether one or more)
included in the Loan Documents), no Consent or Other Action by, from, with or to
any other Person is required prior to or otherwise in connection with (w)
Debtor's ownership of the Collateral and conduct of its Business, (x) Debtor's
(or any of Debtor's Scheduled Affiliates') execution and delivery of, and
performance of its obligations under, the Loan Documents, (y) the Grant of any
Lien granted hereby, or (z) the validity, perfection and maintenance of any Lien
created hereby.

2.12 Purpose for Loans.

Debtor does not intend to (and will not) use all or any portion of the Loan to
purchase or carry any securities, including, without limitation, Margin Stock.
None of the proceeds of the Loan will be used, directly or indirectly, for the
purposes of reducing or retiring any indebtedness which was originally incurred
to purchase or carry-any Margin Stock or other security or for any other purpose
which might cause any of the Loans to be considered a "purpose credit" within
the meaning of Regulations U, T or X of the Board of Governors of the Federal
Reserve System, as amended. Debtor intends to and agrees to use the proceeds of
the Loan solely for the lawful, proper business or commercial purposes set forth
in its application for the Loan and disbursement direction letter furnished by
Debtor to Secured Party in connection with the funding of the Loan.

2.13 Operating Experience.

The Key Individuals are involved in the management of the Units and have not
less than two years experience operating the Business or a business similar to
the Business.

2.14 Financial Coverages.

As of the date hereof, each of Debtor's Debtor FCCR, Consolidated Unit FCCR and
Unit FCCR is greater than the Minimum Debtor FCCR, Minimum CU FCCR and Minimum
Unit FCCR, respectively. During the term of this Security Agreement, (i) Debtor
shall maintain its Corporate Debtor FCCR at not less than the Minimum Debtor
FCCR, (ii) Debtor shall use its commercially reasonable efforts to maintain its
Debtor FCCR at not less than the Target Debtor FCCR, (iii) Debtor shall maintain
its Consolidated Unit FCCR at not less than the Minimum CU FCCR, (iv) Debtor
shall use its commercially reasonable efforts to maintain its Consolidated Unit
FCCR at not less than the Target CU FCCR, and (v) Debtor shall maintain its Unit
FCCR at not less than the Minimum

                                       4
<PAGE>

Unit FCCR. All calculations of Debtor FCCR, Consolidated Unit FCCR and Unit FCCR
shall be made by Secured Party based upon the financial and other information
required to be furnished by Debtor hereunder and calculated for the prior 12-
month period of operations. The term "Unit" as used in the term "Unit FFCR" and
"Minimum Unit FFCR" for purposes of this Section 2.14 shall collectively refer
to all of the Units securing the Note described on Exhibit A attached hereto.

2.15 Limitation on Indebtedness, Realty and Personalty Charges, and Payments to
     Affiliates.

Without Secured Party's prior written consent, Debtor shall not, directly or
indirectly, (x) create, incur, assume, increase or become liable on any
Indebtedness or Realty and Personalty Charges, (y) modify, amend, alter, change,
supplement, add to, replace, substitute or restate any Existing Indebtedness or
Realty and Personalty Charges (including any Contractual Obligations relating
thereto) or (z) become obligated to make any payments (including any Payments to
Affiliates), if after giving effect thereto Debtor's Debtor FCCR is or would be
less than the Target Debtor FCCR or Debtor's Consolidated Unit FCCR is or would
be less than the Target CU FCCR or otherwise upon or during the continuance of
an Event of Default. Debtor shall not, directly or indirectly, make any Payments
to Affiliates during any period in which Debtor's Debtor FCCR is (or, after
giving effect thereto, would be) less than the Target Debtor FCCR or Debtor's
Consolidated Unit FCCR is (or, after giving effect thereto, would be) less than
the Target CU FCCR, or otherwise upon and during the continuance of an Event of
Default. Prior to creating, incurring, assuming, increasing, or becoming liable
on any Indebtedness or Realty or Personalty Charges, Debtor will provide prior
written notice to Secured Party of same and provide to Secured Party evidence in
form satisfactory to Secured Party in its Sole Discretion of Debtor's compliance
with the provisions of this Section 2.15.

2.16 Title; Sufficiency; No Liens.

Except to the extent of permitted encumbrances, if any, described on SCHEDULE 5
(the "Permitted Encumbrances"), Debtor has and will maintain good and marketable
      ----------------------
title to the Collateral (including the Principal Agreements) free of all Liens
(other than the Lien granted to Secured Party hereunder) and such Collateral is
sufficient to enable Debtor to operate the Business at the Unit in accordance
with the Principal Agreements. Except for the filings reflected on the UCC
Search delivered to Secured Party together with this Security Agreement
("Current Filings"), there is no financing statement (or similar statement,
  ---------------
agreement, pledge, deed of trust, mortgage, notice or registration), Lien, or
Judgment filed with, registered, indexed or recorded in any Governmental
Authority (or intended so to be), directly or indirectly, identifying or
encumbering or covering or involving the Collateral or any Principal Agreement
or which could have a Material Adverse Effect. Debtor shall take all actions
necessary to terminate all Current Filings other than those consented to by
Secured Party, identified on SCHEDULE 10 as "To Continue", and relating solely
to Permitted Encumbrances, if any, prior to or concurrently with the funding of
the Loan.

                                       5
<PAGE>

2.17 No Further Disposition.

Other than with respect to the Lien granted herein to Secured Party and, to the
extent of the Permitted Encumbrances, Debtor has not and will not enter into any
agreement or understanding or take, permit or suffer to exist any action
(including the filing of a financing statement, agreement, pledge, deed of trust
or mortgage, notice or registration) or event (whether by operation of law or
otherwise) for the purpose of, or that may have the effect of, directly or
indirectly, Granting or permitting any Lien on or Disposing of any Collateral
(including the Principal Agreements), any interest therein or rights pertaining
thereto or involving the Business or the Unit, or increasing the amount of
Indebtedness secured by the Permitted Encumbrances, if any, or the amount,
property or assets encumbered thereby.

2.18 Principal Agreements.

Debtor has provided Secured Party with a true, correct and complete copy of each
Principal Agreement listed on SCHEDULE I I attached hereto. Debtor is and will
continue to be in good standing with Brand Owner and in compliance with the
Principal Agreements. Debtor has not been and is not in Conflict with or under,
any of the Principal Agreements. Debtor shall not terminate, fail to renew, be
in Conflict with or under any of the Principal Agreements. Debtor has no
knowledge of any claim of (or basis for any claim of) any such termination,
nonrenewal, or Conflict. Debtor shall not amend, modify, restate', substitute or
replace any Principal Agreement or any term or provision thereof (or consent
thereto) without the consent of Secured Party except (i) in the ordinary course
of business, (ii) without shortening the term or affecting any renewal option,
and (iii) without increasing any payment obligations thereunder unless such
increases are applicable to all franchisees or licensees of Brand Owner. Debtor
agree to fully comply, at Debtor's own cost and expense, with the terms of the
Principal Agreements (including any renewal option) and to promptly notify
Secured Party of any adverse development of which Debtor becomes aware with
regard to any of the Principal Agreements, including any claim of Conflict with
or under, or threat of nonrenewal or termination of, or Litigation involving any
of the Principal Agreements.

2.19 Renewal of Principal Agreements.

Until such time as the Obligations have been fully satisfied, Debtor agrees to
make one or more timely elections to renew the term of any of the Principal
Agreements in accordance with the terms of the Principal Agreements and shall
use its best efforts to satisfy any and all conditions to any such renewal, and
to obtain, procure, execute and deliver, file and affix such further agreements,
instruments, documents, notices, statements, writings, powers and information,
and to do or cause to be done all such further acts and things as may be
required in connection with any such renewal or as Secured Party may reasonably
request, from time to time, in its Sole Discretion, in connection with Debtor's
obligations set forth herein.

                                       6
<PAGE>

2.20 Maintenance of Collateral; Business.

At Debtor's sole cost and expense, (i) Debtor shall keep, use, operate and
maintain the Collateral, the Business and the Unit in accordance with
Requirements of Law, the standards required under the Principal Agreements (and
those established by the other parties thereto and applicable to the Business)
and other Contractual Obligations, Consents and Other Action and customary,
prudent business practices, (ii) Debtor shall at all times fully comply with
terms and provisions of the Principal Agreements, and not do or suffer to be
done any act whereby the value of the Collateral, the Business or any Unit or
any part or interest therein may be lessened in any material respect and (iii)
Debtor shall at all times obtain, preserve, renew and keep in fall force and
effect its existence and all rights and franchises with respect thereto and
maintain in full force and effect and fully comply with all Consents and Other
Action, Contractual Obligations, and General Intangibles necessary or
appropriate to carry on the Business. Debtor shall notify Secured Party promptly
of any actual or threatened destruction or material damage or impairment of the
Business, any Unit or any of the Collateral or any event or condition which
could have a Material Adverse Effect.

2.21 Insurance.

At Debtor's sole cost and expense, Debtor shall maintain with Approved Providers
insurance policies with Required Endorsements and satisfying the Insurance
Requirements set forth on EXHIBIT B. Debtor shall (x) timely pay, all premiums,
fees and charges required in connection with all of its insurance policies and
otherwise continue to maintain such policies in full force and effect; (y)
promptly deliver the insurance policies, certificates (and renewals) thereof or
other evidence of compliance herewith to Secured Party; and (z) promptly notify
Secured Party of any loss covered by or claim under or notice made in connection
with any such insurance policies.

2.22 Casualty and Condemnation.

(i) In the event of any casualty or Condemnation (a "Loss "), Debtor shall give
                                                     ----
prompt written notice thereof to Secured Party. Debtor hereby irrevocably
assigns to Secured Party all insurance proceeds or awards with respect to such
Loss (the "Loss Proceeds"). All Loss Proceeds shall be paid to Secured Party
           -------------
and applied pursuant to this Section 2.22, In the event that for any one Unit
the Loss is in the amount of less than $25,000, the related Loss Proceeds may be
retained by Debtor if applied to the related Unit. With respect to any Loss for
any one Unit in an amount of $25,000 or more, all Loss Proceeds with respect to
such Loss shall be payable to Secured Party. Debtor hereby authorizes and
directs any affected insurance company and any affected Governmental Authority
responsible for such Condemnation to make payment of the Loss Proceeds directly
to Secured Party. If, with respect to any Loss for any one Unit in an amount of
$25,000 or more, Debtor receives any Loss Proceeds, Debtor shall promptly pay
over such Loss Proceeds to Secured Party. Debtor hereby covenants that until
such Loss Proceeds are so paid over to Secured Party, Debtor shall hold such
Loss Proceeds in trust for the benefit of Secured Party and shall not commingle
such Loss Proceeds with any other funds or assets of Debtor or any other party.

                                       7
<PAGE>

(ii) Debtor shall proceed promptly and diligently to prosecute in good faith the
settlement or compromise of any and all claims or proceedings relating to such
Loss or Loss Proceeds and Debtor shall take all appropriate action in connection
with each such proceeding, settlement, compromise and adjustment and shall pay
all expenses thereof, including, if Secured Party shall elect to participate
therein, the cost of Secured Party's participation; provided, however, that any
final settlement, compromise or adjustment shall be subject to the prior written
consent of Secured Party unless the Loss Proceeds are sufficient to pay the
Prepayment Amount in full. So long as an Event of Default shall have occurred
and be continuing, Secured Party may, at its option and with respect to its
interests as set forth herein, commence, appear in and prosecute, in its own
name, any such action or proceeding or make any compromise or settlement in
connection with such damage, destruction or taking and obtain directly all Loss
Proceeds.

(iii) If (u) Debtor suffers a Loss, (v) no Event of Default (or event which with
the passage of time or the giving of notice, or both would constitute an Event
of Default) shall have occurred and be continuing, (w) the related Unit is not
in the last two years of the related Lease; (x) Debtor's business interruption
insurance policy will provide for payments covering at least two months in
excess of the period in which any repair or replacement is expected to require,
(y) the proceeds of such insurance (together with any amounts deposited with the
Secured Party by Debtor) are sufficient to cover the costs anticipated to be
incurred in connection with any such repair, restoration or replacement, and (z)
Debtor executes and delivers such documents and certificates confirming the
foregoing or as Secured Party may reasonably request, the provisions of this
subparagraph (iii) shall apply, and Debtor shall provide Secured Party with a
schedule for repairing, restoring or replacing the applicable Property as
promptly as reasonably practicable and shall repair, restore or replace the
applicable Unit (or, in the case of a taking, the remaining Unit) on such
schedule to the same condition, as nearly as possible, as existed immediately
prior to such Loss whether or not the Loss Proceeds are sufficient therefor. If
the cost of any repair, replacement or restoration made by Debtor pursuant to
this Section 2.22 shall exceed the amount of the Loss Proceeds, such deficiency
shall be paid by Debtor. The Loss Proceeds shall be held by Secured Party or its
agent and shall be disbursed to Debtor as hereinafter set forth, provided that
if the estimated cost of such repair, replacement or restoration exceeds the
amount of the Loss Proceeds, Debtor shall deliver to Secured Party or its agent
the estimated deficiency before commencing work. Secured Party or its agent
shall release such Loss Proceeds to Debtor, subject to such reasonable
procedural requirements as Secured Party or its agent may prescribe, from time
to time and provided that such amounts shall be disbursed not more often than
once monthly, as the repair, replacement or restoration progresses, upon
Debtor's written request, accompanied by a certificate of the architect or
engineer in charge of the repair, replacement or restoration or by an Authorized
Officer of Debtor, stating that the sum then requested either has been paid by
Debtor or is justly due to the named persons (whose addresses shall also be
stated) who have rendered services or furnished materials for certain portions
of the repair, replacement or restoration. The certificate shall give a brief
description of such services and materials, shall list the amounts so paid or
owing to each of such Persons, shall state the estimated cost of the balance of
the work yet to be performed, and shall state that no part of such expenditures
has been or is being made the basis for any other request for payment. Upon
compliance with the

                                       8
<PAGE>

foregoing, Secured Party or its agent shall within a reasonable period of time
of its receipt, pay out of the Loss Proceeds to the extent available to the
Persons named in the certificate the respective amounts stated to be due to them
or shall pay to Debtor the amount stated to have been paid by Debtor to such
persons.

(iv) If Debtor suffers a Loss and any one or more of the requisite conditions
for application of subparagraph 2.22 (iii), above, shall not be satisfied, the
provisions of this subparagraph (iv) shall apply and the Loss Proceeds shall be
applied at the option and direction of Secured Party, in its Sole Discretion,
either (w) to the repair, replacement or restoration of the applicable Property
as set forth in (iii) above, (x) on the next Payment Date, to the prepayment of
the outstanding Loan, together with Prepayment Premium Amount and all accrued
and unpaid interest, (x) to the payment of the Obligations, whether or not then
due, in any order and in such manner as Secured Party may determine or (z) as an
addition to Collateral to be held by Secured Party,

2.23 Compliance with Laws; Consents and Other Action; No Violation; Indemnity.

(i) Debtor is and shall continue to be in compliance with all Requirements of
Law. Except as set forth on SCHEDULE 6, all material Consents and Other Action
of any Person or Governmental Authority required for the lawful conduct of
Business at the Unit have been obtained, taken and made.

(ii) Debtor's Use of any of its business (including the Business), securities,
property or assets (including any proceeds of the Loan, any Collateral and the
Properties) has not, is not and shall not be in Conflict with any Requirements
of Law, Contractual Obligation, or Consent or Other Action, and to Debtor's
knowledge no such Conflict exists and no basis for a claim of any such Conflict
exists.

2.24 Tax Returns.

Debtor and each of its Scheduled Affiliates and each Person which might have tax
liabilities for which Debtor or any Scheduled Affiliates is or may be liable
(each a "Tax Party") has filed, or caused to be filed, and will continue to file
         ---------
in a timely manner all tax returns, reports and declarations which are required
to be filed by it. All information in such tax returns, reports and declarations
is complete and accurate in all material respects. Each Tax Party has paid or
caused to be paid all taxes due and payable or claimed due and payable in any
assessment received by it, and has collected, deposited and remitted in
accordance with all Requirements of Law, all sales and/or use taxes applicable
to the conduct of its business, except taxes, the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to the Tax Party and with respect to which adequate reserves have been
set aside on its books. There are no Liens on any properties or assets of the
Debtor or any of its Scheduled Affiliates imposed or arising as a result of the
delinquent payment or the nonpayment of any tax, assessment, fee or other
governmental charge. The income tax returns of each Tax Party have been examined
and reported

                                       9
<PAGE>

upon by the relevant tax authorities, or closed by applicable statutes of
limitations, for all fiscal years and no Tax Party has given or consented to any
waiver of the statute of limitations with respect to its tax liabilities for any
such year. Except as reflected in the financial statements provided to Secured
Party, Debtor knows of no transaction or matter which might or could result in
additional tax assessments to any Tax Party. There are no applicable Taxes and
Other Charges payable by any Tax Party or Secured Party in connection with the
execution and delivery of any Loan Documents by the Debtor or any of its
Affiliates which have not been paid by the Tax Party. Debtor shall be liable for
any tax or penalties imposed on Secured Party as a result of the execution or
performance of the Loan Documents or financing arrangements provided for herein,
and Debtor agrees to indemnify and hold Secured Party harmless with respect to
the foregoing and to repay to Secured Party on demand the amount thereof, and
until paid by Debtor such amount shall be added and deemed part of the Loan,
provided, that, nothing contained herein shall be construed to require Debtor to
pay any income or franchise taxes attributable to the income of Secured Party
from any amounts charged or paid hereunder to Secured Party. The foregoing
indemnity shall survive the payment of the Obligations and the termination of
this Security Agreement.

2.25 Litigation.

Except as set forth on SCHEDULE 7, there is no Litigation pending, or to the
best of Debtor's knowledge threatened, against or affecting Debtor, Its assets
(including any Collateral or Principal Agreement), Business or any Unit or
against or affecting any Scheduled Affiliate or any transactions contemplated by
this Security Agreement or any Loan Document. None of the Litigation identified
on SCHEDULE 7 would, if adversely determined, have a Material Adverse Effect.

2.26 Capitalization; Solvency.

All of the issued and outstanding Capital Stock of Debtor are directly and
beneficially owned and held by the Persons identified on the INFORMATION
CERTIFICATE ("Control Persons") and all of such Capital Stock has been duly
              ---------------
authorized and is fully paid and non-assessable, free and clear of all Liens.
Debtor (and each Scheduled Affiliate) (x) is solvent and will continue to be
solvent after giving effect to the Obligations, the security interests of
Secured Party and the other transactions contemplated hereunder, and (y) is able
to pay its debts as they mature and has (and has reason to believe it will
continue to have) sufficient capital (and not unreasonably small capital) to
carry on its business and all businesses in which it is about to engage. The
assets and properties of Debtor (and each Scheduled Affiliate) at a fair
valuation and at their present fair salable value are, and will be, greater than
the Indebtedness of Debtor (or such Scheduled Affiliate), and including any
subordinated and contingent liabilities computed at the amount which, to the
best of Debtor's knowledge, represents an amount which can reasonably be
expected to become an actual or matured liability.

                                      10
<PAGE>

2.27 Distributions and Redemptions.

Debtor shall not, directly or indirectly, declare, or pay or make any
distributions on account of any Capital Stock now or hereafter outstanding, or
set aside or otherwise deposit or invest any sums for such purpose, or redeem,
retire, defease, purchase or otherwise acquire any Capital Stock (or set aside
or otherwise deposit or invest any sums for such purpose) for any consideration
or apply or set apart any sum, or make any other distribution (by reduction of
capital or otherwise) in respect of any such shares or agree to do any of the
foregoing, either (i) following the occurrence of and during the continuation of
an Event of Default or an event which with the passage of time or giving of
notice or both would be or result in an Event of Default, or (ii) if after
giving effect to such distributions Debtor would be in default or with the
passage of time or the giving of notice or both an Event of Default would occur,
or (iii) if same effects a Change of Control.

2.28 Transactions with Affiliates.

Debtor shall not directly or indirectly, (a) purchase, acquire or lease any
property from, or sell, transfer or lease any property to, any Affiliate or any
officer, employee, member, manager, director, or agent of any Affiliate or
Debtor or (b) make any payments of management, consulting or other fees for
management or similar services, or of any Indebtedness owing to any Affiliate or
any officer, employee, member, manager, director, agent or any Affiliate or
Debtor; except in the ordinary course of business and pursuant to agreements' in
writing on terms no less favorable to Debtor than would be available in
agreements with Persons other than those referenced in (a) or (b) of this
section.

2.29 Banks; Payments.

Debtor shall cause all Collateral Revenues and Proceeds to be deposited in the
account(s) with the bank(s) listed on SCHEDULE 8 and Debtor shall pay, and
hereby authorizes Secured Party to cause to be paid, all Obligations as and when
due from all amounts in any bank required to be listed on SCHEDULE 8. Debtor
shall make all payments to Secured Party on the Obligations free and clear of,
and without deduction or withholding for or on account of, any setoff,
counterclaim, defense, duties, taxes, levies, imposts, fees, deductions,
withholding, restrictions or conditions of any kind. If after receipt of any
payment of, or proceeds of Collateral applied to the payment of, any of the
Obligations, Secured Party is required to surrender or return such payment or
proceeds to any Person for any reason, then the Obligations intended to be
satisfied by such payment or proceeds shall be reinstated and continue and
Debtor shall be and remain liable to Secured Party hereunder and under other
Loan Documents and this Security Agreement and other Loan Documents shall
continue in full force and effect as if such payment or proceeds had not been
received by Secured Party. Debtor shall be liable to pay to Secured Party, and
does hereby indemnify and hold Secured Party harmless for the amount of any
payments or proceeds surrendered or returned. This Section 2.29 shall remain
effective notwithstanding any contrary action which may be taken by Secured
Party in reliance upon such payment or proceeds. This Section 2.29 shall survive
the payment of the Obligations and the termination of this Security Agreement.

                                      11
<PAGE>

2.30 Costs and Expenses.

Debtor shall pay to Secured Party on demand all costs, expenses, filing fees and
taxes (other than income and franchise taxes of Secured Party) paid or payable
in connection with the preparation, negotiation, execution, delivery, recording,
administration, collection, liquidation, enforcement and defense of the
Obligations, Secured Party's rights in the Collateral, the Loan Documents and
all other documents related hereto or thereto, including any amendments,
supplements, restatements or consents which may hereafter be contemplated
(whether or not executed) or entered into in respect hereof and thereof,
including, but not limited to: (a) all costs and expenses of filing or recording
(including Uniform Commercial Code financing statement filing taxes and fees,
documentary taxes, intangibles taxes and mortgage recording taxes and fees, if
applicable); (b) all title insurance and other insurance premiums, Business
Valuation fees and search fees; (c) costs and expenses of remitting loan
proceeds, collecting checks and other items of payment, and establishing and
maintaining any account with any bank required to be listed on SCHEDULE 8
together with Secured Party's customary charges and fees with respect thereto;
(d) costs and expenses of preserving and protecting the Collateral; (e) costs
and expenses paid or incurred in connection with obtaining payment of the
Obligations, enforcing the security interests and liens of Secured Party,
selling or otherwise realizing upon the Collateral, and otherwise enforcing the
provisions of this Security Agreement and the other Loan Documents or defending
any claims made or threatened against Secured Party arising out of the
transactions contemplated hereby and thereby (including, without limitation,
preparations for and consultations concerning any such matters); (g) all out-of-
pocket expenses and costs heretofore and from time to time hereafter incurred by
Secured Party during the course of periodic field examinations of the Collateral
and Debtor's operations; and (h) the actual and reasonable fees and
disbursements of counsel (including legal assistants) to Secured Party in
connection with any of the foregoing.

2.31 Brokers and Financial Advisors.

Except as set forth on SCHEDULE 9, Debtor represents and warrants to Secured
Party that no brokers or finders were used in connection with the financing
contemplated hereby and Debtor hereby agrees to indemnify and hold Secured Party
harmless from and against any and all liabilities, costs and expenses (including
attorney's fees and court costs) suffered or incurred by Secured Party as a
result of or arising out of any of the transactions contemplated hereby. The
provisions of this Section shall survive the expiration and termination of this
Security Agreement and the payment of the Obligations and termination of this
Security Agreement.

2.32 Compliance Certificates; Reports; Communications.

Debtor agrees to provide to Secured Party: (i) within 10 days of the end of each
month, monthly sales reports for the Unit, (ii) within 20 days of March 31, June
30 and September 30 of each calendar year, (x) a compliance certificate (in a
form substantially as attached hereto as EXHIBIT Q completed and executed by an
Authorized Officer of Debtor and (y) quarterly financial statements

                                      12
<PAGE>

of Debtor and of the Unit certified by Debtor's chief financial officer to
fairly present in all material respects Debtor's and each such Unit's financial
condition and results of operations for such period, (iii) within 75 days of
December 31 of each calendar year, (x) a compliance certificate (in a form
substantially as attached hereto as EXHIBIT Q completed and executed by an
Authorized Officer of Debtor and (y) audited annual financial statements of
Debtor and of the Unit and (iv) within 30 days of filing, Debtor's and each Tax
Party's Federal and State Income Tax returns. Debtor further agrees to provide
to Secured Party: (i) prompt notice of any of Debtor's Debtor FCCR, Consolidated
Unit FCCR or Unit FCCR falling below either the target or minimum levels
required in Section 2.14 hereinabove, (ii) promptly following receipt by Debtor,
complete copies of any communications that are or may be materially adverse to
Debtor, its Business, any Unit or the Collateral and (iii) copies of such other
information as Secured Party may from time to time reasonably request promptly
following any such request. The audited financial statements furnished to
Secured Party hereunder shall be prepared in accordance with GAAP applied on a
consistent basis and all financial statements furnished to Secured Party shall
be sufficiently detailed to allow Secured Party to calculate the Debtor's Debtor
FCCR, Consolidated Unit FCCR and Unit FCCR and determine compliance with other
financial covenants.

2.33 Accuracy of Information; Reasonable Assumptions.

All information, reports, statements and financial and other data furnished (or
hereafter furnished) by Debtor, its Affiliates or their respective agents or
representatives to Secured Party, its agents or representatives hereunder or in
connection with the Loan and the Obligations, are (and shall be on the date so
furnished) true, complete and correct in all material respects, shall not
contain any untrue statement of material fact and shall not omit to state any
fact necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made.
All financial projections that have been or are hereafter prepared by or on
behalf of Debtor, its Affiliates or their respective agents or representatives
have been and shall be prepared in good faith and based upon reasonable
assumptions. Debtor shall endeavor promptly to advise Secured Party, from time
to time, when any assumptions made in connection with any projections previously
provided to Secured Party prove to be incorrect or untrue in any material
respect. No Event of Default (or event which with the passage of time or the
giving of notice or both would be an Event of Default) has occurred and is
continuing. To Debtor's knowledge, no event or circumstance has occurred which
has had or could reasonably be expected to have a Material Adverse Effect, which
has not been fully and accurately disclosed to Secured Party in writing and
reflected in the Debtor's financial information and projections and in the
Business Valuation.

2.34 Bring Down of Representations; Survival of Warranties; Cumulative.

Debtor hereby covenants and agrees to execute and deliver, at such time and from
time to time, as required by Secured Party, such agreements, documents,
instruments, estoppels, consents or certificates as Secured Party may, from time
to time, reasonably request, including certificates reaffirming the
representations and covenants of Debtor hereunder as if made on the date of any
such

                                      13
<PAGE>

reaffirmation. All representations and warranties contained in this Security
Agreement or any of the other Loan Documents shall survive the execution and
delivery of this Security Agreement and shall be deemed to have been made again
to Secured Party on the date of each compliance certificate, and each additional
borrowing or other credit accommodation hereunder and shall be conclusively
presumed to have been relied on by Secured Party regardless of any investigation
made or information possessed by Secured Party. The representations and
warranties set forth herein shall be cumulative and in addition to any other
representations or warranties which Debtor shall now or hereafter give, or cause
to be given, to Secured Party.

2.35 Notice of Material Adverse Changes.

Debtor shall promptly notify Secured Party in writing of the details of any
Event of Default or any material loss, damage, or Litigation relating to the
Debtor, the Business, the Collateral, any Scheduled Affiliate or any other
property which is security for the Obligations, any act, condition or event
which, with the passage of time or giving of notice or both, would constitute an
Event of Default or result in any Material Adverse Effect.

2.36 Reports, Budgets, Forecasts.

Debtor shall, at Secured Party's request, permit and assist Secured Party in
obtaining access by electronic transmission, or in such other manner as Secured
Party shall request, to monthly sales reports for the Unit. Debtor shall furnish
or cause to be furnished to Secured Party such budgets, forecasts, projections
and other information respecting the Collateral and the business of Debtor, as
Secured Party may, from time to time, reasonably request. Secured Party is
hereby authorized to deliver, from time to time, a copy of any financial
statement or any other information relating to the business of Debtor to any
Person. Debtor hereby irrevocably authorizes and directs all accountants or
auditors to deliver to Secured Party, at Debtor's expense, copies of the
financial statements of Debtor and any reports or management letters prepared by
such accountants or auditors on behalf of Debtor and to disclose to Secured
Party such information as they may have regarding the business of Debtor. Any
documents, schedules, invoices or other papers delivered to Secured Party may
(but shall not be required to) be destroyed or otherwise disposed of by Secured
Party at any time after the same are delivered to Secured Party, except as
otherwise designated by Debtor to Secured Party in writing.

3.   SPECIAL PROVISIONS ON EQUIPMENT; INSPECTION RIGHTS.

3.1  Equipment Covenants. With respect to the Equipment.

(i) On or after an Event of Default, Debtor shall, at its expense, at any time
or times as Secured Party may request, deliver or cause to be delivered to
Secured Party written reports or Business Valuations as to the Equipment in
form, scope and methodology acceptable to Secured Party in good faith and by an
appraiser reasonably acceptable to Secured Party;

                                      14
<PAGE>

(ii) Debtor shall keep the Equipment in good order, repair, running and
marketable condition (ordinary wear and tear excepted);

(iii) Debtor shall use the Equipment with all reasonable care and caution and in
accordance with applicable standards of Brand Owner and any insurance and in
conformity with all Contractual Obligations, Requirements of Law and Consents
and Other Action;

(iv) The Equipment is and shall be used in Debtor's business and not for
personal, family, household or farming use;

(v) Debtor shall not remove any Equipment from the Unit or other locations set
forth or permitted herein, except to the extent necessary to have any Equipment
(1) repaired or maintained or replaced with Equipment of equal value o-, better
quality and free of any Liens in the ordinary course of the business of Debtor,
or (2) replaced with Equipment of equal value or better quality and free of any
Liens in the ordinary course of the business of Debtor, where either the Debtor
reasonably determines such Equipment to be obsolete or outdated for use in the
Business or as required by the Franchisor of Debtor; and

(vi) Debtor assumes all responsibility and liability arising from the Debtor's
Use of the Equipment, except if such liability results solely from Secured
Party's gross negligence or willful misconduct.

3.2  Inspection; Access to Premises.

From time to time as reasonably requested by Secured Party, from time to time,
at the cost and expense of Debtor (such cost and expense not to exceed a per
them amount of $500 per day per individual restaurant Unit visited, plus actual
out of pocket expenses for coach airfare):

(i) Secured Party or its designee or their respective agents and
representatives, shall have complete access to all of Debtor's premises during
normal business hours and after notice to Debtor, or at any time and without
notice to Debtor if an Event of Default exists or has occurred and is
continuing, for the purposes of inspecting, verifying and auditing the
Collateral and all of Debtor's books and records, including, without limitation,
the Records,

(ii) Debtor shall promptly furnish to Secured Party such copies of such books
and records or extracts therefrom as Secured Party may request in good faith,

(iii) Secured Party shall have the right to review, monitor, and upon reasonable
notice inspect Debtor's operations with respect to compliance with Environmental
Laws and conformity to sound environmental management practices and to make
recommendations to Debtor with respect thereto, and

                                      15
<PAGE>

(1v) Secured Party or its designee shall have use during normal business hours
of such of Debtor's personnel, equipment, supplies and premises as may be
reasonably necessary for the foregoing, provided that such use does not
materially interfere with Debtor's ordinary business operations, and, if an
Event of Default exists or has occurred and is continuing, for the collection of
and realization upon Collateral.

4    SPECIAL PROVISIONS CONCERNING COLLATERAL REVENUES.

Subject to the terms of any Permitted Encumbrances, Debtor hereby directs any
and all transferors, distributors or payors (including insurance companies with
whom Debtor maintains insurance), upon receipt of notice from Secured Party of
the occurrence of an Event of Default under the Loan Documents or that the
Debtor has not satisfied its Target Debtor FCCR and/or Target CU FCCR as set
forth in Section 2.14 herein above, to make payment of all Collateral Revenues
and Proceeds directly to Secured Party and authorizes Secured Party, in its Sole
Discretion, to hold the same in its possession as Collateral, to apply the same
to repayment of the Obligations, to deposit the same into any of the accounts
with the banks listed on SCHEDULE 8, or, to apply the same, or, toward
replacement of the Collateral. All such Collateral Revenues and Proceeds whether
received by Secured Party or by Debtor, or by any other Person will be included
in the Collateral subject to the security interest granted to Secured Party
hereunder. Upon the occurrence of an Event of Default, Debtor shall (i)
identify, earmark, segregate and keep separate all Collateral Revenues and
Proceeds received by it, (ii) upon Secured Party's request, promptly account to
Secured Party for all Collateral Revenues and Proceeds, and (iii) hold all
Collateral Revenues and Proceeds received by Debtor in trust for the benefit of
Secured Party and shall promptly (and in any event not later than the fifth day
after receipt) deliver (or cause to be delivered) the same to Secured Party and
into its possession in the form received by Debtor and at a time and in a manner
satisfactory to Secured Party. Notwithstanding the foregoing or anything
contained in this Security Agreement or the other Loan Documents to the
contrary, upon the occurrence of an Event of Default hereunder of under the
other Loan Documents or in the event Debtor fails to satisfy the Target Debtor
FCCR and/or Target CU FCCR as set forth in Section 2.14 herein above, Debtor
shall upon written notice from Secured Party escrow with Secured Party or a
national banking institution satisfactory to Secured Party in its Sole
Discretion (pursuant to instructions from Secured Party) all taxes, insurance,
rentals, and any capital expenditures required to be expended in connection with
the Property by Debtor during the term of the Loan.

5    SPECIAL PROVISIONS CONCERNING RIGHTS AND DUTIES WHILE IN POSSESSION OF
     COLLATERAL.

5.1  Debtor's Possession.

Upon and during the continuation of an Event of Default, to the extent the same
shall, from time to time, be in Debtor's possession, Debtor will hold the
Collateral and all writings evidencing or relating to the Collateral in trust
for Secured Party and, upon request or as otherwise provided herein,

                                      16
<PAGE>

promptly deliver the same to Secured Party in the form received and at a time
and in a manner satisfactory to Secured Party. With respect to the Collateral in
Debtor's possession Debtor shall at Secured Party's request take such action as
Secured Party in its Sole Discretion deems necessary or desirable to create,
perfect and protect Secured Party's security interest in any of the Collateral
and to preserve or enhance the value thereof.

5.2  Secured Party's Possession.

With respect to all of the Collateral delivered or transferred to, or otherwise
in the custody or control of (including any items in transit to or set apart
for) Secured Party or any of its agents, associates or correspondents in
accordance with this Security Agreement, Debtor agrees that (i) such Collateral
will be and be deemed to be in the sole possession of Secured Party; (ii) Debtor
has no right to withdraw or substitute any such Collateral; (iii) Debtor shall
not take or permit any action, or exercise any voting and other rights, powers
and privileges in respect of the Collateral inconsistent with Secured Party's
interest therein and sole possession thereof and (iv) Secured Party may in it
its Sole Discretion and without notice, without obligation or liability except
to account for property actually received by it, and without affecting or
discharging the Obligations, (x) further transfer and segregate the Collateral
in its possession; (y) receive Collateral Revenues or Proceeds and hold the same
as a part of the Collateral and/or apply the same as hereinafter provided; and
(z) exchange any of the Collateral for other property upon reorganization,
recapitalization or other readjustment. Following the occurrence of an Event of
Default, Secured Party is authorized (i) to exercise or cause its nominee to
exercise all or any rights, powers and privileges (including to vote) on or with
respect to the Collateral with the same force and effect as an absolute owner
thereof-, (ii) whether any of the Obligations be due, in its name or in Debtor's
name or otherwise, to demand, sue for, collect or receive any money or property
at any time payable or receivable on account of or in exchange for, or make any
compromise or settlement Secured Party deems desirable with respect to, any of
the Collateral; and (iii) to extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, or release, any of the
Collateral. Notwithstanding the rights accorded Secured Party with respect to
the Collateral and except to the extent provided below or required by the UCC or
other applicable Law (which requirement cannot be modified, waived or excused),
Secured Party's sole duty with respect to the Collateral in its possession (with
respect to custody, preservation, safekeeping or otherwise and whether under
Section 9-207 of the UCC or otherwise) will be to deal with it in the same
manner that Secured Party deals with similar property owned and possessed by it.
Without limiting the foregoing, Secured Party, and any of its officers,
directors, members, partners, trustees, owners, debt holders, employees,
representatives, agents and designees, except as otherwise required by
applicable Law (i) will have no duty with respect to the Collateral or the
rights granted hereunder; (ii) will not be required to sell, invest, substitute,
replace or otherwise dispose of the Collateral; (iii) will not be required to
take any steps necessary to preserve any rights against prior parties to any of
the Collateral; (iv) will not be liable for (or deemed to have made an election
of or exercised any right or remedy on account of) any delay or failure to
demand, collect or realize upon any of the Collateral; and (v) will have no
obligation or liability in connection

                                      17
<PAGE>

with the Collateral or arising, under this Security Agreement. Debtor agrees
that such standard of care is reasonable and appropriate under the
circumstances.

6    EVENTS OF DEFAULT.

The happening of any one or more of the following events shall constitute an
"Event of Default" hereunder:
 ----------------

6.1  Debtor Default.

(i) Debtor's failure to make any payment when due under this Security Agreement,
the Note, any Loan Document or any Obligations or Debtor's disclaimer of
liability under or enforceability of any Loan Document; (ii) the non-renewal or
termination of the Principal Agreements; or (iii) Debtor's default under,
failure to perform or observe any covenant or condition of or agreement in, or
breach of, or making of a material inaccuracy in or omission from, any
representation or warranty under or in, this Security Agreement, the Note, any
other Loan Document, the Principal Agreements or the License, any financial or
other statement delivered to Secured Party or any Contractual Obligations in
connection with any Permitted Encumbrance, and (in the case of (iii) only) such
default, failure, breach, inaccuracy or omission shall continue unremedied for
the earliest of (a) five days following the date that notice of such default,
failure, breach, inaccuracy or omission is given to Debtor by Secured Party, (b)
five days following the date ("Discovery Date") that Debtor first obtains
                                --------------
knowledge of such default, failure, breach, inaccuracy or omission, or (c) in
the case of any Permitted Encumbrance or lease for the Property, the occurrence
of such event (or, if there exists an applicable cure period, the expiration of
such cure period); provided, that, no such five (5) day period (or cure period)
shall apply in the case of. (x) any failure to observe any such term, covenant,
condition or provision which is not capable of being cured at all or within such
five (5) day period or which has been the subject of a prior failure within a
six (6) month period or (y) an intentional breach by Debtor or any Obligor of
any such term, covenant, condition or provision, or (z) the failure to observe
or perform any of the covenants or provisions contained in Sections 2.5, 2.15,
2,17, 2.18, 2.19, 2.20, 2.21, 2.27, 2.28, 2.29, and 2.32 of this Security
Agreement; or

6.2  Scheduled Affiliate Default.

Any Scheduled Affiliate fails to make any payment when due under, or defaults
under, fails to perform or observe any covenant of or condition or agreement in
breach of, or makes any material inaccuracy in or omission from any
representation and warranty under, any Loan Document with Secured Party or in
any other agreement, instrument, document or certificate, or financial or other
statement delivered to Secured Party, and such failure, default or breach
continues beyond any applicable grace period provided therein; or

                                      18
<PAGE>

6.3  Other Defaults of Debtor and Other Liable Parties.

If Debtor or any of Debtor's Affiliates who is a maker, drawer, acceptor,
endorser, guarantor, surety, accommodation party or otherwise liable for any of
the Obligations or Collateral, or any partnership or limited liability company
in which Debtor is a partner or member (each hereinafter called an "other liable
party") shall die, dissolve, merge or consolidate, suspend the transaction of
business, attempt to terminate, revoke or disclaim any obligation to Secured
Party (except strictly in accordance with its terms), or incur any material
adverse change in its financial condition or prospects (including without
limitation, a default under any of Debtor's material contract obligations,
including any loan obligation in excess of $100,000.00); or if Debtor or any
other liable party shall be expelled from or suspended by any stock or
securities exchange or other exchange; or any proceeding, procedure or remedy
supplementary to or in enforcement of judgment (involving an amount in excess of
$20,000 in the aggregate) shall be resorted to or commenced against, or with
respect to any property of, Debtor or any other liable party; or if Debtor or
any other liable party shall make an assignment for the benefit of, or
composition with, creditors, or shall be or become insolvent or unable, or
generally fall, to pay its debts when due, or shall be or become a party or
subject to any bankruptcy, reorganization, insolvency or other similar
proceeding; or a receiver or liquidator, custodian or trustee shall be appointed
for Debtor or any other liable party, or a substantial portion of any of
Debtor's or their respective assets and, if any of the foregoing shall occur
involuntarily as to Debtor and any other liable party, it shall not be dismissed
with prejudice, stayed or discharged within 30 days; or if Debtor or any other
liable party shall take any action to effect, or which indicates its
acquiescence in, any of the foregoing.

7    REMEDIES.

7.1  Cumulative Rights and Remedies.

Upon the occurrence of an Event of Default, Secured Party shall have the rights,
powers and remedies (i) granted to secured parties under the UCC or other
applicable Uniform Commercial Code; (ii) granted to Secured Party under any
other applicable Law; and (iii) granted to Secured Party under this Security
Agreement, the Note or any other Loan Document or any other agreement between
Debtor and Secured Party. In addition, all such rights, powers and remedies
shall be cumulative and not alternative and enforceable, in Secured Party's Sole
Discretion, alternatively, successively, or concurrently on any one or more
occasions, and shall include, without limitation, the right to apply to a court
of equity for an injunction to restrain a breach or threatened breach by Debtor
of this Security Agreement or any of the other Loan Documents. Any single or
partial exercise of, or forbearance, failure or delay in exercising any right,
power or remedy shall not be, nor shall any such single or partial exercise of,
or forbearance, failure or delay be deemed to be a limitation, modification or
waiver of any right, power or remedy and shall not preclude the further exercise
thereof-, and every right, power and remedy of Secured Party shall continue in
full force and effect until such right, power and remedy is specifically waived
by an instrument in writing executed and delivered with respect to each such
waiver by Secured Party.

                                      19
<PAGE>

7.2  Acceleration of Obligations.

Upon the occurrence of an Event of Default, and at any time thereafter if any
Event of Default shall then be continuing, Secured Party may, from time to time
in its Sole Discretion, by written notice to Debtor declare the Note (including
an amount equal to that required to be paid if the Loan were prepaid as
described in paragraphs 5. "Prepayments" and 6. "Acceleration; Expenses" of the
                            -----------          ----------------------
Note) and any other Obligations to be immediately due and payable whereupon
(and, ipso facto, automatically without any notice, demand or other action by
any Person, upon the occurrence of any Event of Default of the type referred to
in Section 6.3 hereof) such principal, interest and other Obligations shall be
immediately due and payable, without presentment, demand, protest, notice of
default, notice of intent to accelerate, or other notice of any kind, all of
which are hereby waived by Debtor to the maximum extent permitted by law and
such amounts, to the extent not paid on the date of acceleration, shall
thereafter bear interest until paid at the Default Rate.

7.3  Additional Rights of Secured Party.

Upon the occurrence of an Event of Default, Secured Party may, from time to
time, in its Sole Discretion, and without Debtor's assent, without
advertisements or notices of any kind (except for the notice specified in
Section 7.5 below regarding notice required in connection with a public or
private sale), or demand of performance or other demand, or obligation or
liability (except to account for amounts actually received) to or upon Debtor or
any other person (all such advertisements, notices and demands, obligation and
liabilities, if any, hereby being expressly waived and discharged to the extent
permitted by law), forthwith, directly or through its agents or representatives,
(i) disclose such default and other matters (including the name of Debtor) in
connection therewith to any Person in Secured Party's reasonable Sole
Discretion; (ii) to the extent permitted by applicable Law enter any Property,
with or without the assistance of other persons or legal process; (iii) require
Debtor to account for (including accounting for any products and proceeds of any
Collateral), segregate, assemble, make available and deliver to Secured Party,
its agents or representatives, the Collateral, at any place and time designated
by Secured Party; (iv) take possession of, operate, render unusable, remove from
any location, collect, transfer and receive, recover, appropriate, foreclose,
extend payment of, adjust, compromise, settle, release any claims included in,
and do all other acts or things necessary or, that Secured Party in its Sole
Discretion deems appropriate, to protect, maintain, preserve and realize upon,
the Collateral and any products and proceeds thereof, in whole or in part; and
(v) exercise all rights, powers and interests with respect to any and all
Collateral, and sell, assign, lease, license, pledge, transfer, negotiate
(including endorse checks, drafts, orders, or instruments), deliver or otherwise
dispose (by contract, option(s) or otherwise) of the Collateral or any part
thereof. Any such disposition may be in one or more public or private sales, at
or upon an exchange, board or system or in the State where the Unit is located
or elsewhere, at such price, for cash or credit (or for future delivery without
credit risk) and upon such other terms and conditions as it deems appropriate,
with the right of Secured Party to the extent permitted by Law upon any such
sale or sales, public or private, to purchase the whole or any part of said
Collateral, free of any right, claim or equity of redemption of or in Debtor
(such rights, claims and equity of redemption,

                                      20
<PAGE>

if any, hereby being expressly waived). If any of the Collateral is sold or
leased by Secured Party upon credit terms or for future delivery, the
Obligations shall not be reduced as a result thereof until payment therefore is
finally collected by Secured Party. In the event Secured Party institutes an
action to recover any Collateral or seeks recovery of any Collateral by way of
prejudgment remedy, Debtor waives the posting of any bond which might otherwise
be required. Notwithstanding that Secured Party, whether in its own behalf
and/or on behalf of another or others, may continue to hold the Collateral and
regardless of the value thereof, or any delay or failure to dispose thereof,
unless and then only to the extent that Secured Party proposes to retain the
Collateral in satisfaction of the Obligations by written notice in accordance
with the UCC, Debtor shall be and remain liable for the payment in full of any
balance of the Obligations and expenses at any time unpaid. Without limiting the
foregoing, upon Debtor's failure to abide by and comply with its obligations
under any of Sections 2, 3, and 4 hereof, in addition to its other rights and
remedies, Secured Party may (but is not required to), in its Sole Discretion and
to the extent it deems necessary, advisable or appropriate, take or cause to be
taken such actions or things to be done (including the payment or advancement of
funds, or requiring advancement of funds to be held by Secured Party to fund
such obligations, including taxes or insurance) as may be required hereby (or
necessary or desirable in connection herewith) to correct such failure
(including causing the Collateral to be maintained or insurance protection
required hereby to be procured and maintained) and any and all costs and
expenses incurred (including reasonable attorneys fees and disbursements) in
connection therewith shall be included in Debtor's Obligations and shall be
immediately due and payable and bear interest at the Default Rate.

7.4  Application of Proceeds; Deficiency.

Upon and after the occurrence of an Event of Default, Secured Party may apply
the net proceeds, if any, of any collection, receipt, recovery, appropriation,
foreclosure or realization, or from any use, operation, sale, assignment, lease,
pledge, transfer, delivery or disposition of all or any of the Collateral, after
deducting all reasonable costs and expenses (including attorneys fees, trustee
fees, court costs and legal expenses) incurred in connection therewith or with
respect to the care, safekeeping, custody, maintenance, protection,
administration or otherwise of any and all of said Collateral or in any way
relating to the rights of Secured Party under this Security Agreement, (i)
first, to the satisfaction of the Obligations, in whole or in part (whether or
not due) in such order as Secured Party may, in its Sole Discretion, elect; (ii)
second, to the payment, satisfaction or discharge of any other Indebtedness or
Obligations (including any reimbursement, subrogation, contribution or other
obligation to any Person), or otherwise as may be permitted or as required by
any law, rule or regulation (including Section 9-504(l)(c) of the UCC); and
(iii) lastly, the surplus, if any, to Debtor. In connection with any disposition
of the Collateral, Debtor shall remain liable to Secured Party for the payment
of any deficiency with interest at the highest rate provided for herein and all
costs and expenses of collection or enforcement, including reasonable attorneys'
fees and legal expenses. In applying any proceeds to any obligation secured by a
purchase money security interest, the Secured Party shall use the "first-in-
first-out" method of allocation.

                                      21
<PAGE>

7.5  Required Notice of Sale.

In exercising its rights, powers and remedies as secured party, Secured Party
agrees to give Debtor 10 days' notice of the time and place of any public sale
of Collateral or of the time after which any private sale of Collateral may take
place, unless the Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market. Debtor agrees
that such period and notice is commercially reasonable under the circumstances.

8    RIGHT TO CURE; POST-DEFAULT POWER OF ATTORNEY.

8.1  Right to Cure.

Secured Party may, at its option but without an/ obligation, after an Event of
Default that is continuing cure any default by Debtor under any Contractual
Obligation including the Principal Agreements and Leases or pay or bond on
appeal any judgment entered against Debtor; discharge taxes or other Liens at
any time levied on or existing with respect to the Collateral; and pay any
amount, incur any expense or perform any act which, in Secured Party's judgment,
is necessary or appropriate to preserve, protect, insure or maintain the
Collateral and the rights of Secured Party with respect thereto. Secured Party
may add any amounts so expended to the Obligations, such amounts to be repayable
by Debtor on demand. Secured Party shall be under no obligation to effect such
cure, payment or bonding and shall not, by doing so, be deemed to have assumed
any obligation or liability of Debtor. Any payment made or other action taken by
Secured Party under this Section shall be without prejudice to any right to
assert an Event of Default hereunder and to proceed accordingly.

8.2  Power of Attorney.

Debtor hereby irrevocably constitutes and appoints, effective on and after the
occurrence of an Event of Default, Secured Party acting through any officer or
agent thereof, with full power of substitution, as Debtor's true and lawful
attorney-in-fact with full irrevocable power and authority in Debtor's place and
stead and in Debtor's name or in its own name, from time to time in Secured
Party's Sole Discretion, to receive, open and dispose of mail addressed to
Debtor, to take any and all action, to do all things, to execute, endorse,
deliver and file any and all writings, documents, instruments, notices,
statements (including financing statements, and writings to correct any error or
ambiguity in any Loan Document), applications and registrations (including
registrations and licenses for securities, copyrights, patents, and trademarks),
checks, drafts, acceptances, money orders, or other evidence of payment or
proceeds, which may be or become necessary or desirable in the Sole Discretion
of Secured Party to accomplish the terms, purposes and intent of, or to fulfill
Debtor's obligations under this Security Agreement and the other Loan Documents,
including the right to appear in and defend any action or proceeding brought
with respect to the Collateral or Property, and to bring any action or
proceeding, in the name and on behalf of Debtor, which Secured Party, in its
Sole Discretion, deems necessary or desirable to protect its interest in the
Collateral or Property.

                                      22
<PAGE>

This power is coupled with an interest and is irrevocable. THIS POWER DOES NOT
AND SHALL NOT BE CONSTRUED TO AUTHORIZE ANY CONFESSION OF JUDGMENT. Debtor
hereby releases Secured Party and its officers, directors, members, partners,
trustees, debt holders, employees, representatives, agents and designees from
any liabilities arising from any act or acts under this power of attorney and in
furtherance thereof, whether of omission or commission, except and only to the
extent the same results from Secured Party's own gross negligence or willful
misconduct as determined pursuant to a final non-appealable order of a court of
competent jurisdiction.

9    DISCLOSURE.

Debtor hereby authorizes Secured Party and its agents and representatives at any
time and from time to time to obtain from, disclose to and discuss with any
Brand Owner, creditor of Debtor or any other Person information concerning or
relating to the financial condition, operations and other matters relating to
the Debtor, its Business and Property and hereby consents to the release to
Secured Party by any such Person, at any time and from time to time, of
information relating to the Debtor, its Business and Property upon request of
Secured Party and without notice to or consent from Debtor. Debtor hereby
consents to the disclosure by the Secured Party of any and all information
(financial or otherwise) concerning Debtor to any Person in connection with the
sale or other disposition of Debtor's Loan (including any securitization
thereof).

10   INDEMNIFICATION.

Debtor shall make the indemnities provided for on Sections 2.24, 2.29 and 2.31
and Debtor shall indemnify and hold Secured Party harmless from and against any
such violation or any breach of Section 2, and any other loss, liability,
damage, cost or expense whatsoever (including attorneys fees and disbursements)
arising out of or in connection with Debtor's Use of any of its business
(including the Business), securities, property or assets (including any proceeds
of the Loan, any Collateral and the Property). Debtor hereby saves, indemnifies
and holds Secured Party harmless from and against all expenses, actions,
judgments, suits, costs, liabilities, obligations, losses, penalties or damages
of any kind or nature, including attorney's fees and expenses, imposed on,
asserted against, suffered or incurred by Secured Party in any way relating to,
or arising out of or in connection with this Security Agreement, the Loan
Documents or the transactions contemplated hereby or thereby. Without limiting
the foregoing, Debtor will pay to Secured Party all expenses (including
reasonable expenses for legal services of every kind) of, or incidental to, the
negotiation of, entering into and enforcement of any of the provisions hereof
and of any of the Obligations, and any actual or attempted sale, lease or other
disposition of, and any exchange, enforcement, collection, compromise or
settlement of any of the Collateral and receipt of the Proceeds thereof, and for
the care of the Collateral and defending or asserting the rights and claims of
Secured Party in respect thereof, by litigation or otherwise, including expense
of insurance, and all such expenses shall be Debtor's Obligations. Debtor shall
indemnify and hold Secured Party, and its officers, directors, members,
partners, trustees, debt holders, employees, agents, representatives and

                                      23
<PAGE>

designees, harmless from and against any and all losses, claims, damages,
liabilities, costs or expenses imposed on, incurred by or asserted against any
of them in connection with any litigation, investigation, claim or proceeding
commenced or threatened related to the negotiation, preparation, execution,
delivery, enforcement, performance or administration of this Security Agreement,
any other Loan Documents, or any undertaking or proceeding related to any of the
transactions contemplated hereby or any act, omission, event or transaction
related or attendant thereto, including, without limitation, amounts paid in
settlement, court costs, and the reasonable fees and expenses of counsel, but
excluding any such losses, claims, damages, liabilities, costs and expenses
directly caused to be incurred by reason of the gross negligence or willful
misconduct of the person otherwise to be indemnified and held harmless under
this Section, as determined by a final, non-appealable judgment of a court of
competent jurisdiction. To the extent that the undertaking to indemnify, pay and
hold harmless set forth in this Section may be unenforceable because it violates
any Law or public policy, Debtor shall pay the maximum portion which it is
permitted to pay under applicable Law to Secured Party in satisfaction of
indemnified matters under this Section. The foregoing indemnity shall survive
the payment of the Obligations and the termination or non-renewal of this
Security Agreement.

11   OBLIGATIONS AND SECURITY INTEREST ABSOLUTE.

Debtor's Obligations will be absolute, unconditional and irrevocable and will be
paid or satisfied strictly in accordance with their respective terms under all
circumstances whatsoever, including: (i) the invalidity or unenforceability of
all or any of, or any part of, this Security Agreement, the Note or any other
Loan Document, or any consent, waiver, amendment or modification thereof-, (ii)
the existence of any claim, setoff, defense or other right which Debtor may have
at any time against Secured Party, or any other Person, whether in connection
with this Security Agreement, any other Loan Documents, the transactions
contemplated hereby, thereby or otherwise all of which Debtor hereby waives to
the maximum extent permitted by Law; or (iii) the loss, theft, damage,
destruction or unavailability of the Collateral to Debtor for any reason
whatsoever, it being understood and agreed that Debtor retains all liability and
responsibility with respect to the Collateral. All rights of the Secured Party
and the security interests hereunder shall be absolute and unconditional
irrespective of- (a) any change in the time, manner, amount or place of payment
of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Note or any
other Loan Document; (b) any exchange, release or nonperfection of all or any
part of the Collateral or any other collateral, or any release from, amendment
to, waiver of or consent to departure from any guaranty, for all or any of the
Obligations; or (c) to the fullest extent permitted by Law, any other
circumstances which might otherwise constitute a defense available to, or a
discharge of, the Debtor or a third party pledgor.

12   ASSIGNMENT; SUBSTITUTION OF COLLATERAL.

12.1 Assignment

                                      24
<PAGE>

This Security Agreement (and each other Loan Document) is freely assignable, in
whole or in part, by Secured Party and, to the extent of any such assignment,
Secured Party shall be fully discharged from all responsibility. Secured Party's
assignee shall, to the extent of the assignment, be vested with all the powers
and rights of Secured Party hereunder (including those granted under Sections 7
and 8 hereof or otherwise with respect to the Collateral), and to the extent of
such assignment the assignee may fully enforce such rights and powers as secured
party and all references to Secured Party shall mean and refer to such assignee.
Secured Party shall retain all rights and powers hereby given not so assigned,
transferred and/or delivered. Without limiting the foregoing, Debtor understands
and agrees that Secured Party may, from time to time, sell, pledge, grant a
security interest in and collaterally assign, transfer and deliver or otherwise
encumber or dispose of the Note, this Security Agreement and the other Loan
Documents and its rights and powers hereunder and thereunder, in whole or in
part, in connection with a securitization or any other assignment or other
disposition of the Note. Debtor may not, in whole or in part, directly or
indirectly, assign this Security Agreement or any Loan Document or its rights
hereunder or thereunder or delegate its duties hereunder or thereunder without,
in each instance, the specific prior written consent of Secured Party, which
consent may be withheld or delayed in Secured Party's Sole Discretion, and
satisfaction of Secured Party's then applicable underwriting guidelines and
payment upon submission to the Secured Party of an amount equal to (i) one
percent (1%) of the outstanding principal amount of the Loan and (ii) all
reasonable costs and expenses incurred by Secured Party in connection with such
assignment (including, without limitation, reasonable and actual attorneys' fees
and disbursements). For purposes-of this Security Agreement, a Change in Control
(whether by equity sale, issuance or otherwise) shall constitute an assignment
hereof.

12.2 Substitution of Collateral

Unless an Event of Default (or an event which with the passage of time or the
giving of notice, or both, would constitute an Event of Default) has occurred,
the Debtor may elect to substitute new collateral and obtain a release of one or
more individual restaurant Units and the Collateral related thereto part of such
Unit (the "Release Collateral") with the consent of Secured Party, such consent
           ------------------
not to be unreasonably withheld, if Debtor satisfies, in Secured Party's Sole
Discretion the following conditions precedent: (a) proposed substitute
collateral is substantially similar (e.g., similar real and personal property
interests, brands and cash flow) to the Release Collateral (the "Substitute
                                                                 ----------
Collateral"); (b) the Substitute Collateral satisfies, in Secured Party's Sole
----------
Discretion, Secured Party's then applicable underwriting guidelines (including,
without limitation, survey, appraisal, and title insurance requirements, and any
other applicable due diligence requirements) and (x) the then outstanding
principal amount of the Loan allocable to the Substitute Collateral is less than
the product of (i) 0.60 and (ii) the value of the Substitute Collateral by an
independent valuation consultant and (y) the Unit FCCR for Substitute Collateral
is not less than 1:40 or the FCCR for the individuals Unit to be replaced at the
time of substitution (whichever is higher); (c) the Debtor executes and delivers
such documents and agreements (including legal opinions) as Secured Party may
request which documents and agreements shall be in form and substance consistent
with the Loan Documents; (d) Debtor pays to Secured Party a fee in an amount
equal to 1.00% of the then

                                      25
<PAGE>

outstanding principal amount of the Loan allocable to the Release Collateral to
be replaced ("Substitution Fee, I') and all reasonable costs and expenses
              ----------------
incurred by Secured Party in connection with such substitution; and (e) in the
event that the Loan has been included in a rated securitization, Secured Party
receives confirmation that such substitution shall not result in a
qualification, downgrade or withdrawal of the then current ratings assigned to
the securities issued in connection with such securitization by the applicable
rating agencies. If the Substitute Collateral is provided to Secured Party and
the conditions for substitution set forth above are met, Secured Party will
release the Release Collateral from any and all Liens that Secured Party may
have with respect to the Release Collateral and shall execute and deliver to
Debtor for filing and recordation such documents and instruments as Debtor may
reasonably request in order to effectuate the release of the Release Collateral
and place such release of public record. Substitution of Collateral shall not
occur more frequently than once per calendar quarter.

13      FURTHER ASSURANCES.

Debtor agrees at any time and from time to time, at Debtor's sole cost and
expense, to promptly obtain, procure, execute and deliver, file and affix or
cause to be obtained, procured, executed, delivered, filed and affixed such
further agreements, bills of sale, assignments, instruments, documents,
warehouse receipts, bills of lading, vouchers, invoices, notices, statements,
writings (including financing statements, and writings to correct any error or
ambiguity in any Loan Document), powers (including stock and bond powers, and
powers of attorney), tax stamps and information, and to do or cause to be done
all such further acts and things (including the execution, delivery and filing
of financing statements, payment of filing fees and transfer, gains and
recording taxes) and do and cause to be done all such other acts as Secured
Party may reasonably request, from time to time, in its Sole Discretion. Without
limiting the foregoing, Debtor authorizes Secured Party to the extent permitted
under the UCC to fil this Security Agreement or a copy hereof, and the same
shall be sufficient as a financing statement, and to execute and file, or file
without Debtor's signature, any and all financing statements (including a copy
of this Security Agreement which is and will be deemed to be sufficient as a
financing statement), amendments thereto and continuations thereof as Secured
Party deems necessary or appropriate and Debtor shall pay and indemnify Secured
Party for and hold Secured Party harmless from any and all costs and expenses in
connection therewith. Debtor further agrees that it will promptly notify Secured
Party of and, subject to Section 15.1 hereof, agrees to correct any defect,
error or omission in the contents of any of the Loan Documents or in the
execution, delivery or acknowledgment thereof. The Debtor further agrees to
execute, from time to time, prior to or within three months of the date hereof,
and otherwise promptly following Secured Party's request, a Form 4506 Request
for Copy of Transcript of Tax Form or its successor form.

                                      26
<PAGE>

14       TERM.

This Security Agreement shall be immediately in full force and effect as a
security agreement under the UCC upon Debtor's execution below, whether or not
it is signed by Secured Party. Upon indefeasible payment in full of the
Obligations in accordance with the terms thereof, this Security Agreement and
the security interested granted hereunder shall terminate and Secured Party, at
Debtor's expense, will within a reasonable time following Debtor's request
execute and deliver to Debtor the proper instruments (including UCC termination
statements) acknowledging the termination of the security interest, and will
transfer (without recourse, representation or warranty) such Collateral as may
be in Secured Party's possession, and not to be retained, sold, or otherwise
applied or released pursuant to this Security Agreement, to Debtor, except that
the provisions of Sections 10, 11, 13 and 15 shall survive indefinitely. No
termination of this Security Agreement or the other Loan Documents shall relieve
or discharge Debtor of its respective duties, obligations and covenants under
this Security Agreement or the other Loan Documents until all Obligations have
been fully and finally discharged and paid, and Secured Party's rights and
remedies hereunder, under the other Loan Documents and applicable Law, shall
remain in effect until all such Obligations have been fully and finally
discharged and paid.

15       MISCELLANEOUS.

15.1     FINAL AGREEMENT; Amendments, Consents, Authorizations.

THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE
AGREEMENT BETWEEN DEBTOR AND SECURED PARTY AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF DEBTOR AND SECURED PARTY. DEBTOR ACKNOWLEDGES AND
AGREES THERE ARE NO ORAL AGREEMENTS BETWEEN DEBTOR AND SECURED PARTY. DEBTOR
UNDERSTANDS AND AGREES THAT ORAL AGREEMENTS AND ORAL COMMITMENTS TO LOAN MONEY,
EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE. This Security Agreement and the Loan Documents represent the entire
understanding of Secured Party and Debtor with respect to the transactions
contemplated hereby and thereby. None of the terms or provisions of this
Security Agreement or any other Loan Document may be waived, altered, modified,
or amended except in each instance by a specific written instrument duly
executed by Secured Party, Any such waiver shall be enforceable only to the
extent specifically set forth therein. A waiver by Secured Party of any right,
power and/or remedy on any one occasion shall not be construed as a bar to or
waiver of any such right, power and/or remedy which Secured Party would
otherwise have on any future occasion, whether similar in kind or otherwise.
Without limiting the foregoing, no action or omission to act shall be deemed

                                      27
<PAGE>

to be a consent, authorization, representation or agreement of Secured Party,
under the UCC or otherwise, unless, in each instance, the same is in a specific
writing signed by Secured Party. The inclusion of Collateral Revenues and
Proceeds in the Collateral does not and shall not be deemed to authorize Debtor
to sell, exchange of dispose the Collateral or the Principal Agreements or
otherwise use the Collateral in any manner not otherwise specifically authorized
herein.

15.2     Notices.

All notices and other communications given pursuant to or in connection with
this Security Agreement shall be in duly executed writing delivered to the
parties at the addresses set forth under their respective signatures below (or
such other address as may be provided by one party in a notice to the other).
Notice delivered in accordance with the foregoing shall be effective (i) when
delivered, if delivered personally or by receipted-for telex, telecopier, or
facsimile transmission, (ii) two days after being delivered in the United States
(properly addressed and all fees paid) for overnight delivery service to a
courier (such as Federal Express) which regularly provides such service and
regularly obtains executed receipts evidencing delivery or (iii) five days after
being deposited (properly addressed and stamped for first-class delivery) in a
daily serviced United States mail box.

15.3     Reasonableness.

If at any time Debtor believes that Secured Party has not acted reasonably in
granting or withholding any approval or consent under the Note, this Security
Agreement, or any other Loan Document or otherwise with respect to the
Obligations, as to which approval or consent either Secured Party has expressly
agreed to act reasonably, or absent such agreement, a court of law having
jurisdiction over the subject matter would require Secured Party to act
reasonably, then Debtor's sole remedy shall be to seek injunctive relief or
specific performance and no action for monetary damages or punitive damages
shall in any event or under any circumstance be maintained by Debtor against
Secured Party. Secured Party shall not have any liability to Debtor (whether in
tort, contract, equity or otherwise) for losses suffered by Debtor in connection
with, arising out of, or in any way related to the transactions or relationships
contemplated by this Security Agreement, or any act, omission or event occurring
in connection herewith, unless and only to the extent that it is determined by a
final and non-appealable judgment or court order binding on Secured Party, that
the losses were the result of acts or omissions constituting gross negligence or
willful misconduct. In any such litigation, Secured Party shall be entitled to
the benefit of the rebuttable presumption that it acted in good faith and with
the exercise of ordinary care in the performance by it of the terms of this
Security Agreement.

15.4     Recovery of Sums Required To Be Paid.

Secured Party shall have the right from time to time to take action to recover
any sum or sums which constitute a part of the Obligations as the same become
due, without regard to whether or not the balance of the Obligations shall be
due, and without prejudice to the right of Secured Party thereafter

                                      28
<PAGE>

to bring an action of foreclosure, or any other action, for a default or
defaults by Debtor existing at the time such earlier action was commenced.

15.5   WAIVERS.

DEBTOR HEREBY MAKES AND ACKNOWLEDGES THAT IT MAKES ALL OF THE WAIVERS SET FORTH
IN THIS SECURITY AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS KNOWINGLY,
INTENTIONALLY, VOLUNTARILY, WITHOUT DURESS, AND ONLY AFTER EXTENSIVE
CONSIDERATION OF THE RAMIFICATIONS OF SUCH WAIVERS WITH ITS ATTORNEY; DEBTOR
FURTHER ACKNOWLEDGES THAT SUCH WAIVERS ARE A MATERIAL INDUCEMENT TO SECURED
PARTY TO MAKE THE LOAN TO DEBTOR AND THAT SECURED PARTY WOULD NOT HAVE MADE THE
LOAN WITHOUT SUCH WAIVERS; AND DEBTOR HEREBY MAKES AND ACKNOWLEDGES THAT IT
MAKES SUCH WAIVERS WITH RESPECT TO EACH OTHER LOAN DOCUMENT.

15.6   GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF TRIAL BY JURY.

(a)      DEBTOR AND SECURED PARTY REPRESENT, WARRANT, AND ACKNOWLEDGE TO EACH
OTHER THAT THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS BEAR A
REASONABLE RELATIONSHIP TO THE STATE OF NEW YORK THIS SECURITY AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AND THE APPLICABLE LAWS OF THE UNITED STATES.

(b)      DEBTOR AND SECURED PARTY HERETO CONSENT, UNCONDITIONALLY AND
IRREVOCABLY, TO THE NONEXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS OF
THE STATE OF NEW YORK WITH RESPECT TO ANY PROCEEDING RELATING TO ANY MATTER,
CLAIM OR DISPUTE ARISING UNDER THIS SECURITY AGREEMENT, THE OTHER LOAN DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OTHER THAN PURSUIT OF A
JUDGMENT ON THE NOTE WHERE SUIT IS ALSO BROUGHT IN THE STATE WHERE THE PROPERTY
IS LOCATED TO TAKE JURISDICTION OF THE PROPERTY. DEBTOR FURTHER CONSENTS,
GENERALLY, UNCONDITIONALLY AND IRREVOCABLY, TO THE NONEXCLUSIVE JURISDICTION OF
THE STATE AND FEDERAL COURTS OF THE STATE WHERE THE PROPERTY IS LOCATED IN
RESPECT OF ANY PROCEEDING RELATING TO ANY MATTER, CLAIM OR DISPUTE ARISING WITH
RESPECT TO THE PROPERTY INCLUDING BUT NOT LIMITED TO FORECLOSURES. DEBTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS, GENERALLY,
UNCONDITIONALLY AND IRREVOCABLY, AT THE ADDRESSES SET FORTH HEREIN IN CONNECTION
WITH ANY OF THE AFORESAID PROCEEDINGS IN ACCORDANCE WITH THE RULES APPLICABLE TO
SUCH

                                      29
<PAGE>

PROCEEDINGS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, DEBTOR HEREBY
IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW HAVE OR HAVE IN THE FUTURE TO
THE LAYING OF VENUE IN RESPECT OF ANY OF THE AFORESAID PROCEEDINGS BROUGHT IN
THE COURTS REFERRED TO ABOVE AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF SECURED PARTY TO
SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR TO COMMENCE PROCEEDINGS OR
OTHERWISE PROCEED AGAINST DEBTOR IN ANY JURISDICTION. To the extent that the
Debtor has or may hereafter acquire any immunity from the jurisdiction of any
court or from any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise) with
respect to the Debtor or the Debtor's property, the Debtor hereby irrevocably
waives such immunity in respect of its obligations under this Note.

(c)      TO THE MAXIMUM EXTENT PERMITTED BY LAW, DEBTOR AND SECURED PARTY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS SECURITY AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY EXERCISE
BY ANY PARTY OF THEIR RESPECTIVE RIGHTS HEREUNDER OR IN ANY WAY RELATING TO THE
LOAN OR THE PROPERTY (INCLUDING ANY ACTION TO RESCIND OR CANCEL THIS SECURITY
AGREEMENT, AND ANY CLAIM OR DEFENSE ASSERTING THAT THIS SECURITY AGREEMENT WAS
FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A
MATERIAL INDUCEMENT FOR SECURED PARTY TO MAKE THE LOAN.

15.7     Waiver of Notices.

Debtor hereby expressly waives demand, presentment, protest and notice of
protest, notice of dishonor, notice of default and notice of intent to
accelerate with respect to any and all instruments and commercial paper,
included in or evidencing any of the Obligations or the Collateral, and any and
all other demands and notices of any kind or nature whatsoever with respect to
the Obligations, the Collateral and this Security Agreement and any Loan
Documents, except such as are expressly provided for herein. No notice to or
demand on Debtor which Secured Party may elect to give shall entitle Debtor to
any other or further notice or demand in the same, similar or other
circumstances. Without limiting the generality of the foregoing, Debtor waives
notice prior to Secured Party's taking possession or control of any of the
Collateral or any bond or security which might be required by any court prior to
allowing Secured Party to exercise any of Secured Party's remedies, including

                                      30
<PAGE>

the issuance of an immediate writ of possession and the benefit of all
valuation, appraisement and exemption laws.

15.8    Relationship.

The relationship of Secured Party to Debtor hereunder is strictly and solely
that of secured commercial lender on the one hand and commercial debtor on the
other in a commercial transaction and nothing contained in the Note, this
Security Agreement or any other Loan Document or otherwise in connection with
the Obligations is intended to create, or shall in any event or under any
circumstance be construed as creating, a partnership, joint venture, tenancy-in-
common, joint tenancy or other relationship of any nature whatsoever between
Secured Party and Debtor other than as secured commercial lender on the one hand
and commercial debtor and guarantor on the other in a commercial transaction.

15.9    Waiver of Counterclaims.

Debtor waives all rights to interpose any claims, deductions, setoffs or
counterclaims of any nature (other than compulsory counterclaims) in any action
or proceeding brought by Secured Party with respect to this Security Agreement,
any Loan Documents, the Obligations, the Collateral or any matter arising
therefrom or relating hereto or thereto.

15.10   No Conflict with Principal Agreements.

This Security Agreement and the rights (including the remedies) granted and the
duties imposed hereunder are not intended to conflict with or contravene the
Principal Agreements or the Licenses.

15.11   Time is of the Essence.

For all payments to be made and all obligations to be performed under the Loan
Documents, time is of the essence.

15.12   LIMITATION OF INTEREST.

NOTWITHSTANDING ANY OTHER PROVISION HEREOF, IN NO EVENT SHALL THE AMOUNT OR RATE
OF INTEREST (INCLUDING TO THE EXTENT APPLICABLE ANY DEFAULT RATE INTEREST OR
LATE PAYMENT CHARGE) PAYABLE, CONTRACTED FOR, CHARGED OR RECEIVED UNDER OR IN
CONNECTION WITH THE NOTE OR ANY OTHER LOAN DOCUMENT, FROM TIME TO TIME OR FOR
WHATEVER REASON, EXCEED THE MAXIMUM RATE OR AMOUNT, IF ANY, SPECIFIED BY
APPLICABLE LAW ("MAXIMUM INTEREST RATE"). In the event any interest is charged
                 ----------------
or received in excess of the Maximum Interest Rate ("Excess"), Debtor
                                                   -----------
acknowledges and stipulates that any such charge

                                      31
<PAGE>

or receipt shall be the result of an accident and bona fide error, and that any
Excess received by Secured Party shall be applied, first, to the payment of the
then outstanding and unpaid principal hereunder; second to the payment of the
other Obligations then outstanding and unpaid; and third, returned to Debtor, it
being the intent of the parties hereto not to enter into a usurious or otherwise
illegal relationship. Debtor recognizes that such an unintentional result could
inadvertently occur. All monies paid to Secured Party hereunder or under any of
the other Loan Documents, whether at maturity or by prepayment, shall be subject
to any rebate of unearned interest as and to the extent required by applicable
law. By the execution of this Security Agreement, Debtor agrees that (i) the
credit or return of any Excess shall constitute the acceptance by Debtor of such
Excess, and (ii) Debtor shall not seek or pursue any other remedy, legal or
equitable, against Secured Party, based in whole or in part upon contracting
for, charging or receiving any interest or such amounts which are deemed to
constitute interest in excess of the Maximum Interest Rate. For the purpose of
determining whether or not any Excess has been contracted for, charged or
received by Secured Party, all interest at any time contracted for, charged or
received from Debtor in connection with this Security Agreement or any of the
other Loan Documents shall, to the extent permitted by applicable Law, be
amortized, prorated, allocated and spread during the entire term of this
Security Agreement in accordance with the amounts outstanding from time to time
hereunder and the Maximum Interest Rate from time to time in effect in order to
lawfully charge the maximum amount of interest permitted under applicable Laws.
The provisions of this Section 15.12 shall be deemed to be incorporated into
each of the other Loan Documents (whether or not any provision of this Section
is referred to therein). Each of the Loan Documents and communications relating
t any interest owed by Debtor and all figures set forth therein shall, for the
sole purpose of computing the extent of the Obligations, be automatically
recomputed by Debtor, and by any court considering the same, to give effect to
the adjustments or credits required by this Section.

15.13   Binding Effect; Jurisdiction; Summary Judgment.

The parties agree that the jurisdictions listed on SCHEDULE 4 are the proper
places to file financing statements with respect to the Collateral and the laws
of such states governing perfection and effect of perfection or non-perfection
of security interests in all collateral in which a security interest is
perfected by filing a financial statement under the Uniform Commercial Code.
This Security Agreement shall be binding upon Debtor, and the heirs, devisees,
administrators, executives, personal representatives, successors, receivers,
trustees, and (without limiting Section 12 hereof) assigns, including all
successors in interest of Debtor in and to all or any part of the Collateral,
and shall inure to the benefit of Secured Party, and the successors and assigns
of Secured Party. Debtor and Secured Party irrevocably consent and submit to the
non-exclusive jurisdiction of the state or federal courts sitting for New York
County, State of New York, and waive any objection based on venue or forum non
conveniens with respect to any action instituted therein arising under this
Security Agreement or any of the other Loan Documents or in any way connected
with or related or incidental to the dealings of the parties hereto in respect
of this Security Agreement or any of the other Loan Documents or the
transactions related hereto or thereto, in each case whether now existing or
hereafter arising, and whether in contract, tort, equity or otherwise, and agree
that any

                                      32
<PAGE>

dispute with respect to any such matters shall be heard only in the courts
described above (except that Secured Party shall have the right to bring any
action or proceeding against Debtor or its property in the courts of any other
jurisdiction which Secured Party deems necessary or appropriate in order to
realize on the Collateral or to otherwise enforce its rights against Debtor or
its property). Debtor hereby waives personal service of any and all process upon
it and consents that all such service of process may be made by certified mail
(return receipt requested) directed to its address set forth on the signature
pages hereof and service so made shall be deemed to be completed five (5) days
after the same shall have been so deposited in the U.S. mails, properly
addressed and postage prepaid, or, at Secured Party's option, by service upon
Debtor in any other manner provided under the rules of any such courts. Within
thirty (30) days after such service, Debtor shall appear in answer to such
process, failing which Debtor shall be deemed in default and judgment may be
entered by Secured Party against Debtor for the amount of the claim and other
relief requested.

15.14    Severability.

Whenever possible this Security Agreement, the Note and each Loan Document and
each provision hereof and thereof shall be interpreted in such manner as to be
effective, valid and enforceable under applicable Law. If and to the extent that
any such provision shall be held invalid and unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provisions hereof or thereof, and any determination that
the application of any provision hereof or thereof to any person or under any
circumstance is illegal and unenforceable shall not affect the legality,
validity and enforceability of such provision as it may be applied to any other
person or in any other circumstance.

15.15    Counterparts; Captions; Construction.

This Security Agreement and each other Loan Document may be executed in
counterpart, each of which shall be an original and all of which taken together
shall be and be deemed to be one and the same instrument. The headings, titles
and captions used herein are for convenience only and shall not affect the
construction of this Security Agreement or any term or provision hereof. The
inclusion of an example by way of illustration such as a parenthetical
("including . . .") shall not be construed as or deemed a limitation on the
generality of the general text to which it refers. Subject to Section 12, the
terms Debtor and Secured Party shall include heirs, devisees, executors,
administrators, personal representatives, successors, receivers, trustees and
assigns. The liability of all Persons comprising or constituting Debtor under
this Security Agreement and each other Loan Document shall be joint and several.

15.16    Exhibits and Schedules

All exhibits and schedules to this Security Agreement are attached hereto and
incorporated herein by reference as if fully set forth herein.

                                      33
<PAGE>

15.17    Cross-Default; Cross-Collateralization.

The Indebtedness and Obligations of Debtor as evidenced by the Note, this
Security Agreement, the Mortgage and any of the other Loan Documents securing or
executed in connection with the Note (collectively, the "Subject Loan
                                                        -------------
Documents"), are cross collateralized and cross defaulted with any other note,
------------
mortgage or deed to secure debt, security agreement, loan document or agreement
executed in connection with or as security for the Indebtedness and Obligations
now or hereafter existing by Debtor to Secured Party (collectively, the "Cross
Pledged and Defaulted Loan Documents"). The existence of an Event of Default
---------------------------------------
under any of the Subject Loan Documents (after the expiration of any applicable
notice and cure periods) shall be deemed and shall constitute an Event of
Default under the Cross Pledged and Defaulted Loan Documents (without any
further notice and cure by Secured Party to Debtor which is hereby specifically
waived by Debtor for all purposes), and an Event of Default under any of the
Cross Pledged and Defaulted Loan Documents (after the expiration of any
applicable notice and cure periods), shall constitute an Event of Default under
the Subject Loan Documents (without any further notice and cure by Secured Party
to Debtor which is hereby specifically waived by Debtor for all purposes). The
Property and other Collateral (as such terms are defined in the Subject Loan
Documents) shall secure the Indebtedness and Obligations as evidenced by the
Cross Pledged and Defaulted Loan Documents, and the Property and other
Collateral as such terms are defined in the Cross Pledged and Defaulted Loan
Documents shall secure the Indebtedness and Obligations as evidenced by the
Subject Loan Documents.

Notwithstanding the foregoing, Secured Party reserves the night, to undo, with
respect to any promissory note part of the Indebtedness and Obligations of
Debtor to Secured Party, any cross default or collateralization of such
promissory notes and the Collateral securing same to any other promissory note
part of the Indebtedness or Obligations of Debtor to Secured Party and the
Collateral securing such other promissory note, in its Sole Discretion.

15.18    Cooperation.

In the event that the Loan or part thereof is securitized or sold as a whole
loan, the Debtor shall agree (a) to meet with representatives of the national
credit rating agencies and prospective purchasers and investors of the Loan to
discuss the business and operations of the restaurants part of the Unit, (b) to
cooperate with the reasonable requests of such representatives, purchasers,
investors and the Secured Party, including agreeing to non-material
modifications of the Loan Documents, providing "comfort" letters concerning
Debtor's financial statements and legal opinions, delivering updated information
regarding Debtors, the Principals and the Collateral, and reviewing the Secured
Party's offering materials to the extent relating to the Debtor, the Unit (or
any restaurants part thereof) or the Loan, and (c) to take such other actions to
facilitate the securitization or whole loan sale as the Secured Party shall
request.

                                      34
<PAGE>

15.19    Public Announcement

Upon closing of the Loan, and at any time or from time to time thereafter,
Secured Party is authorized in its Sole Discretion to issue news releases and at
its own expense to publish announcements in newspapers, trade journals and other
appropriate media, containing information about the Loan as Secured Party may in
its Sole Discretion determine, including without limitation the legal and trade
name (and, if such information is public, the ownership affiliation) of Debtor,
the term and amount of the Loan, the Interest Rate, the name, nature and
location of the Property. This provision shall survive the closing of the Loan.

15.20   Re-Imaging Requirements

Debtor agrees on or before the twentieth (20th) calendar day of each month,
beginning November 20, 2000 and continuing on the twentieth (20th) calendar day
of each month thereafter during the term of the Loan, to deposit in to the
Revolving Credit Account (as such term is defined on SCHEDULE 5 attached
                                                     ----------
hereto), the amount of Seventy-Five Thousand Dollars ($75,000.00) until the
available borrowing capacity in such account (excluding the Sinking Fund
Deposits made pursuant to Section 15.21 below) totals the Adjusted Maximum Re-
Imaging Balance (as defined below) at which time Debtor's obligations to make
further deposits under this Section 15.20 shall terminate (the "Re Imaging Fund
                                                                -- ------- ----
Doosits'). The term "Adjusted Maximum Re-Imaging Balance" as used in this
--------
Section 15.20 shall mean a balance equal to Two Hundred and Twenty-Five Thousand
Dollars ($225,000.00) less any expenditures ("Re-Imaging Expenditures") made
                                             -------------------------
with respect to the Units subject to re-imaging requirements of the Franchisor
("Re-Imaging Units"). For a period of twelve (12) months from the date of the
---------------------
closing of the Loan, Debtor agrees not to make any withdrawals from the
Revolving Credit account which would reduce the balance therein below the
Adjusted Maximum Re-Imaging Balance. Debtor further agrees to complete the re-
imaging of the Re Imaging Units within the lesser of (a) twelve (12) months from
the date of the closing of the Loan or (b) the term required for the re-imaging
of such units under the applicable franchise agreements with Franchisor. Debtor
agrees to send to Secured Party (or to cause the bank maintaining the Revolving
Credit Account) to deliver to Secured Party on or before the tenth (10') day of
each month during the term of the Loan (i) a statement of account for the
Revolving Credit Account (showing all deposits and withdrawals made for the
immediately prior month), and (ii) a certificate setting forth in reasonable
detail the nature and amount of the Re-Imaging Expenditures incurred in
connection with the applicable Re-Imaging Units (such units also described in
reasonable detail in such certificate) for the immediately prior month (and
attaching copies of paid invoices evidencing same) signed and certified to as
true and correct by an authorized officer of the Debtor; until such time as the
Re-Imaging Units have been re-imaged to the satisfaction of Franchisor and a
letter signed by Franchisor confirming same to the satisfaction of Secured Party
(in its Sole Discretion) has been delivered to Secured Party.

                                      35
<PAGE>

15.21 RMS Note - Sinking Fund Requirements

Debtor agrees on or before the twentieth (20') calendar day of each month,
beginning November 20, 2000 and continuing on the twentieth (20') calendar day
of each month thereafter for twelve (12) months during the term of the Loan, to
deposit in to the Revolving Credit Account, the amount of Eighty-Five Thousand
Dollars ($85,000.00) until the available borrowing capacity in such account
(excluding the Re-Imaging Fund Deposits made pursuant to Section 15.20 above)
totals the Adjusted Maximum Sinking Fund Balance (as defined below), at which
time Debtor's obligations to make further deposits under this Section 15.21
shall terminate (the "Sinking Fund Deposits"). The term "Adjusted Maximum
                       --------------------
Sinking Fund Balance" as used in this Section 15.21 shall mean a balance equal
to the amount of One Million Forty-Seven Thousand Five Hundred Sixty-Five and
No/100 Dollars ($1,047,565.00). During such twelve (12) month period during
which deposits hereunder are required, Debtor agrees not to make any withdrawals
from the Revolving Credit Account which would reduce the borrowing capacity of
the Revolving Credit Account (excluding the Re-Image Fund Deposits) below the
Adjusted Maximum Sinking Fund Balance. Upon the maturity date of the RMS Note
(as such term is defined on SCHEDULE 5 attached hereto), Debtor agrees to pay
                            ----------
off such note with the Adjusted Maximum Sinking Fund Balance and to provide
evidence of same to Secured Party in form satisfactory to Secured Party in its
Sole Discretion. Debtor agrees to send to Secured Party (or to cause the bank
maintaining the Revolving Credit Account) to deliver to Secured Party on or
before the tenth ( 10th ) day of each month during the term of the Loan a
statement of account for the Revolving Credit Account (showing all deposits and
withdrawals made for the immediately prior month).

15.22 Liquidity Requirement

Debtor agrees to either (a) at all times maintain cash or Marketable Securities
(defined below) in an amount equal to two months of principal and interest
payments payable under the Loan (the "Cash/Marketable Securities Balance") or
                                      ----------------------------------
(b) maintain a Current Ratio (defined below), of no less than 0.75 to 1.00. The
term "Cash/Marketable Securities Balance" shall be determined on a quarterly
basis and shall mean the average daily balance with respect to all bank
accounts, available borrowings on the Debtors' Revolving Credit Account
(excluding the Re-Imaging Fund Deposits and the Sinking Fund Deposits), and
Marketable Securities accounts maintained by the Debtor for such quarter. The
Debtor's "Current Ratio" is defined as the current assets of Debtor divided by
the current liabilities of Debtor as calculated by Secured Party in its Sole
Discretion. The term "Marketable Securities" shall mean such marketable
securities as approved by Secured Party in its reasonable discretion.

                           [Signature Pages Follow]

                                      36
<PAGE>

IN WITNESS WHEREOF, Secured Party and Debtor have caused these presents to be
duly executed as of the day and year first above written.

                                   SECURED PARTY:

                                   AMERICAN COMMERCIAL CAPITAL LLC, a Delaware
                                   limited liability company

                                   By-.James Kendrick Noble, III
                                       -----------------------------------------
                                       Managing Director

                                   Address:
                                   5963 La Place Court, Suite 300
                                   Carlsbad, California 92008
                                   Attention: Loan Administration

                                      37
<PAGE>

                                   DEBTOR:
                                   ------

                                   INTERFOODS OF AMERICA, INC.,
                                   a Nevada corporation

                                   By:________________________________
                                   Name: Robert S. Berg
                                   Title: Chief Executive Officer

                                   Address:
                                   9400 S. Dadeland Blvd., Suite 720
                                   Miami, FL 33156

                                   SAILORMEN, INC.,
                                   a Florida corporation

                                   By:________________________________
                                   Name: Robert S. Berg
                                   Title: Chief Executive Officer

                                   Address:
                                   9400 S. Dadeland Blvd., Suite 720
                                   Miami, FL 33156

                                      38
<PAGE>

SCHEDULES LIST
---------------

DEFINITIONS SCHEDULE (Introduction)
INFORMATION CERTIFICATE ((S)(S) 2.1, 2.2, 2.3 AND 2.26)
SCHEDULE I MERGERS, CONSOLIDATIONS, ACQUISITIONS ((S) 2.1)
SCHEDULE 2 OTHER BUSINESSES ((S)(S) 2.2 and 2.5)
SCHEDULE 3 SCHEDULED AFFILIATES ((S) 2.4)
SCHEDULE 4 FILING OFFICES ((S)(S) 2.9 and 5.13)
SCHEDULE 5 PERMITTED ENCUMBRANCES ((S) 2.16)
SCHEDULE 6 CONSENTS AND OTHER ACTION ((S) 2.23)
SCHEDULE 7 LITIGATION ((S) 2.25)
SCHEDULE 8 BANKS ((S)(S) 2.29, 2.30, and 4)
SCHEDULE 9 BROKERS AND FINANCIAL ADVISORS ((S) 2.3 1)
SCHEDULE 10 UCC FILINGS ((S) 2.16)
SCHEDULE 11 PRINCIPAL AGREEMENTS ((S)(S) 2.18 and 2.19)
SCHEDULE 12 MISSING CONSENTS OR OTHER ACTIONS ((S) 2.11)
SCHEDULE 13 LIST OF RE-IMAGING UNITS

EXHIBITS LIST
-------------

EXHIBIT A Legal Description/Address and other Property/Unit Information
EXHIBIT B Insurance Requirements ((S) 2.2 1)
EXHIBIT C Compliance Certificate ((S) 2.32)

                                      39
<PAGE>

                             DEFINITIONS SCHEDULE
                             [Security Agreement]

         "Acceleration Date" shall have the meaning accorded to such term in the
          -----------------
Note.

         "Account" or "Accounts" shall have the meaning accorded to such term in
the UCC.

         "Adjusted Debtor EBITDAR" shall mean the sum of Debtor's net income
          ------------------------
(loss)plus, in each case to the extent previously deducted in calculating net
income (loss): (i) income taxes, (ii) principal and interest payments on all of
its indebtedness, (iii) all non-cash charges including depreciation and
amortization, (iv) Owner's Compensation Adjustments, (v) Non-Recurring Items,
(vi) Realty Charges, (vii) Personalty Charges, and (viii) other adjustments, in
the Sole Discretion of Secured Party, deemed appropriate.

         "Adjusted Debtor G&A" shall mean, with respect to the Debtor, actual
         ---------------------
Debtor G&A expenses minus, to the extent previously included in Debtor G&A, (i)
Owner's Compensation Adjustments; (ii) Non Recurring Expenses; and (iii) other
adjustments, in the Sole Discretion of Secured Party, deemed appropriate.

         "Affiliate" or "Affiliates" shall mean, with respect to any Person, (i)
any Person who controls, is controlled by, or is under common control with such
Person, (ii) any Person who is a manager, director or officer of, partner in,
trustee of, or blood or legal relative, guardian or representative of the
specified Person, or any Person who acts or serves in a similar capacity with
respect to the specified Person, (iii) any Person of which or whom the specified
Person is a manager, director or officer, partner, trustee, or blood or legal
relative, guardian or representative, or with respect to which or whom, the
specified Person acts or serves in a similar capacity; (iv) any Person, who,
directly or indirectly, is the legal or beneficial owner of or controls 10% or
more of any class of equity securities of the specified Person, and (v) any
Person who is an Affiliate as defined in clauses (i), (ii), (iii) or (iv) of an
Affiliate of the specified Person.

         "Affiliate Guarantee" shall mean any guarantee of Debtor's Obligations.
          -------------------

         "Allocated G&A" shall mean, with respect to any Unit, the product of
         ---------------
  (x) the sales/revenue of any business conducted at the unit during the
  preceding 12 months multiplied by (y) the G&A Ratio.

         "Approved Providers" shall mean providers of insurance rated not less
          ------------------
than A-NI by A.M. Best Company Inc., or otherwise approved by Secured Party.

         "Authorized Officer" shall mean, with respect to any Person, any
          ------------------
president, vice president, secretary, treasurer, manager or Person holding
comparable titles and performing comparable duties who, in each case, is duly
authorized to execute documents and perform duties by appropriate resolution and
in accordance with Organizational Documents of such Person.

         "Bankruptcy Code" shall have the meaning accorded to such term in the
          ---------------
Mortgage.

         "Brand" shall have the meaning accorded to such term in the Information
Certificate.

         "Brand Owner" shall have the meaning accorded to such term in the
          -----------
Information Certificate.

         "Branded Contract" shall have the meaning accorded to such term in the
          ----------------
Information Certificate, as the same may be amended from time to time, and any
extension, substitution, restatement or replacement thereof and any other
Contractual Obligation between Debtor and Brand Owner with respect to the
Business.

         "Business" shall mean the business of operating a Unit in accordance
with the Principal Agreements.

                                      -1-
<PAGE>

         "Business Day" shall mean any date other than a Saturday, Sunday or
         --------------
legal holiday or date on which banking institutions in Delaware, New York or
California are authorized or required to close.

         "Business Valuation" shall mean the valuation of a Unit made in
         --------------------
connection with the Loan by independent appraisers or valuation consultants
approved by Secured Party.

         "Call Protection" shall have the meaning accorded to such term in the
         -----------------
Note.

         "Call Protection Date" shall have the meaning accorded to such term in
         ----------------------
the Note.

         "Capital Stock" shall mean any common stock, partnership interest,
         ---------------
membership interest or other equity interest.

         "Certificate of Title" shall mean any certificate or document
         ----------------------
evidencing title.

         "Change in Control" any act or event (including any assignment, sale,
         -------------------
disposition or issuance) which results in (or with the passage of time will
result in) either (a) Robert S. Berg owning of record and beneficially less than
33% of the voting Capital Stock of Interfoods of America, Inc. and/or Steven M.
Wemple owning of record and beneficially less than 18% of the voting Capital
Stock of Interfoods of America, Inc., or (b) Robert S. Berg or Steven M. Wemple
relinquishing (whether voluntarily or otherwise) their respective current level
of control and/or officer position in Debtor, or (c) Interfoods, of America,
Inc. owning of record and beneficially less than 80% of the Capital Stock of
Sailormen, Inc.

         "Chattel Paper" shall have the meaning accorded to such term in the
         ---------------
UCC.

         "Collateral" shall mean all Goods (including Equipment and Inventory),
General Intangibles (including Principal Agreements, Accounts, Certificates of
Title, Fixtures, Money, Instruments, Investment Property, Documents, Chattel
Paper, Deposit Accounts, Letters of Credit, (as all of such terms are defined in
the UCC or otherwise herein or in the Loan Documents), credit balances,
deposits, bankers' acceptances, guaranties, credits, claims, chooses in action,
demands, liens, security interests, rights, insurance, awards, compensation,
remedies, title and interest in, to and in respect of other Collateral, and all
Collateral Revenues and all other personal property, now or hereafter owned,
acquired, existing, arising, held, sold, used or consumed in connection with the
Business or a Unit and any other property, rights, and interests which at any
time relate to, arise out of or in connection with the foregoing or which come
into the possession, custody or control of Secured Party or any of its agents,
representatives, associates or correspondents, for any purpose, and all Proceeds
of the foregoing.

         "Collateral Revenues" shall mean with respect to any Collateral all
         ---------------------
interest, income, dividends, distributions, rents, revenues, profits and
earnings thereon or other monies or revenues derived therefrom, including any
such property received in connection with any disposition of any Principal
Agreement and all moneys which may become payable or received under any policy
insuring the Collateral or otherwise required to be maintained under the
Security Agreement (including return of unearned premium).

          "Condemnation" shall mean any taking by any Governmental Authority or
          --------------
other Person.

         "Conflict" or "Conflicting" shall mean, with respect to any Contractual
                       -------------
Obligation, Organizational Document, Requirement of Law, Consent or Other Action
or any other item, any conflict with, breach of, default under, any triggering
of rights, benefits, or obligations under or in connection with such item.

         "Consent or Consents and Other Action" shall mean any consent,
         --------------------------------------
authorization, Judgment, directive, approval, license, certificate,
registration, permit, exception, exemption, filing, notice, declaration or other
action by, with or to any Person.

                                      -2-
<PAGE>

         "Consolidated Unit EBITDAR' shall mean, the sum of Unit EBITDAR for
         ---------------------------
each of the Units related to all of the notes and security agreements evidencing
and securing the Obligations to Secured Party (including, without limitation,
the Note and Security Agreement).

         "Consolidated Unit FCCR" shall mean, with respect to the preceding 12-
         ------------------------
month period for any Units related to any notes and security agreements
evidencing and securing the Obligations to Secured Party (including, without
limitation, the Note and Security Agreement), the quotient of (x) Consolidated
Unit EBITDAR divided by (y) Consolidated Unit Fixed Charges.

         "Consolidated Unit Fixed Charges" shall mean, the sum of Unit Fixed
         ---------------------------------
Charges for each of the Units related to the Note and Security Agreement
evidencing and securing Obligations to Secured Party.

         "Contractual Obligation 'or "Contractual Obligations" shall include any
         -----------------------     -------------------------
obligation under or in connection with any Instrument, Document or General
Intangible.

         "Control Persons" shall have the meaning accorded to such term in
         -----------------
Section 2.26 of the Security Agreement.

         "Corporate G&A" shall mean, with respect to any period, the amount of
         ---------------
expenses paid for (w) management and administrative fees and salaries, (x)
legal, accounting and professional services, (y) general office supplies, and
(z) travel and entertainment expense.

         "Current Filings" shall have the meaning accorded to such term in
         ------------------
Section 2.16 of the Security Agreement.

         "Debtor" shall mean any Debtor, and any Person executing any Agreement
         --------
of Principal, Affiliate Guarantee (if any), Security Agreement, Deed of Trust,
Mortgage or other Contractual Obligation securing or evidencing the Loan to
Debtor.

         "Debtor FCCR" shall mean, with respect to the Debtor for the preceding
         -------------
12-month period, the ratio of (x) Adjusted Debtor EBITDAR divided by (y) the
Debtor Fixed Charges.

         "Debtor Fixed Charges" shall mean Debtor's (x) aggregate principal and
         ----------------------
interest payments on all Indebtedness, plus its (y) payments in respect of
Realty Charges, plus (z) payments in respect of Personalty Charges.

         "Debtor G&A" shall mean, with respect to any Debtor and any period, the
         ------------
Debtor's Corporate G&A for such period.

         "Debtor's Use" shall include Debtor's acquiring, obtaining, making,
         --------------
manufacturing, producing, operating, holding, possessing, maintaining, selling,
transferring, granting, pledging, leasing, disposing or using.

         "Default Rate" shall have the meaning accorded to such term in the
         --------------
Note.

         "Defeasance" shall have the meaning accorded to such term in the Note.

         "Defeasance Collateral" shall have the meaning accorded to such term in
         -----------------------
the Note.

         "Defeasance Securily Aereement" shall have the meaning accorded to such
         -------------------------------
term in the Note.

         "Deposit Account" shall have the meaning accorded to such term in the
         -----------------
UCC.

         "Dispose" or "Disposing" shall include, with respect to any property,
         ------------------------
assets, obligations or other items, any sale, assignment, conveyance, pledge,
Grant, encumbrance, lease, gift, abandonment or other disposition.

                                      -3-
<PAGE>

         "Discovery Date" shall have the meaning accorded to such term in
         ----------------
Section 6.1 of the Security Agreement.

         "Document" shall have the meaning, accorded to such term in the UCC.

         "Environmental Laws" means all present and future Laws, Requirements of
         --------------
Law, or Consents or Other Action, relating to the protection of human health and
safety or the environment, including, without limitation, (a) all Laws,
Requirements of Law, or Consents or Other Action, pertaining to reporting,
licensing, permitting, investigation, and remediation of emissions, discharges,
releases, or threatened releases of hazardous materials, chemical substances,
pollutants, contaminants, or hazardous or toxic substances, materials or wastes
whether solid, liquid, or gaseous in nature, into the air, surface water,
groundwater, or land, or relating to the presence, generation, discharge,
release, removal, manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of chemical substances, pollutants,
emissions, contaminants, or hazardous, radioactive or toxic substances,
materials, or wastes, whether solid, liquid, or gaseous in nature; and (b) all
Laws, Requirements of Law Consents or Other Action, pertaining to the protection
of the health and safety of employees of the public.

         "Environmental Report" shall include, with respect to any Property or
         ----------------------
other property or assets, any report, investigation, or document review with
respect to compliance with Requirements of Law and or the presence of Hazardous
Materials.

         "Environmental Requirement" shall collectively mean all present and
         ---------------------------
future Laws, Consents and Other Action or the equivalent of or by any
Governmental Authority and relating to or addressing the protection of the
environment or human health.

         "EPA" shall mean the United States Environmental Protection Agency.

         "Equipment" shall have the meaning accorded to such term in the UCC.
         -----------

         "ERISA" shall mean Employee Retirement Income Security Act of 1974, as
amended.

         "Event of Default" shall have the meaning accorded to such term in
         -------------------
Section 6 of the Security Agreement.

         "Existing Indebtedness" shall have the meaning accorded to such term in
         -----------------------
the Security Agreement.

         "FCCR" shall mean, with respect to any period, Person, Unit or Units,
the fixed charge coverage ratio of either the Debtor FCCR, the Consolidated Unit
FCCR or the Unit FCCR, as applicable.

         "Filing Collateral" shall mean all Goods (including Inventory and
         -------------------
Equipment), General Intangibles, Accounts, Fixtures, Investment Property,
Chattel Paper and all other property with respect to which a security interest
may be perfected by the filing of financing statements under the UCC.

         "Filing Offices" shall have the meaning accorded to such term in
         ----------------
Section 2.9 of the Security Agreement.

           "Financing Statements" shall mean financing statements on form UCC- I
           ----------------------
naming Debtor as debtor and Secured Party as secured party and describing the
Collateral as the collateral.

          "Fixtures" shall have the meaning accorded to such term in the UCC.

          "GAAP" shall mean the generally accepted accounting principles and
practices as in effect in the United States of America from time to time,
consistently applied.

          "G&A Ratio" shall equal the quotient of (x) Adjusted Debtor G&A for
          -----------
the preceding 12-month period divided by (y) Debtor sales/revenue for the
corresponding 12-month period.

                                     -4-
<PAGE>

          "General Intangible" or "General Intangibles" shall have the meaning
          --------------------    ---------------------
accorded to such term in the UCC.

          "Goods" shall have the meaning, accorded to such term in the UCC.

          "Governmental Authority" shall mean any public office, court,
          ------------------------
arbitration or mediation panel, or office, administrative agency, regulatory
authority, government, self-regulatory agency or authority or any subdivision
thereof.

          "Grant" or "Grants" or "Granting" shall include to grant, assign,
          -------    --------    ----------
transfer, convey, set over and dispose.

          "Hazardous Material" shall mean any material or substance that,
          --------------------
whether by its nature or use, is now or hereafter defined as a hazardous waste,
hazardous substance, pollutant or contaminant under any Environmental Laws, or
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and which is now and hereafter
regulated under any Environmental Laws, or which is or contains petroleum,
gasoline, diesel fuel or another petroleum hydrocarbon product.

          "Indebtedness" shall mean and include (i) with respect to any Person,
          --------------
(a) all items of indebtedness and liabilities which, in accordance with GAAP,
would be included in determining liabilities that are shown on the liability
side of the balance sheet of such Person, (b) all indebtedness and liabilities
of other Persons assumed or guaranteed by such Person or in respect to which
such Person is secondarily or contingently liable whether by any agreement to
acquire indebtedness and liabilities or to supply or advance funds or otherwise,
and (c) all indebtedness and liabilities of other Persons secured by any Lien in
any property of such Person; and (ii) with respect to a Unit, (a) all items of
indebtedness and liabilities which, in accordance with GAAP, would be included
in determining liabilities that are shown on the liability side of the balance
sheet of such Unit, (b) to the extent such indebtedness or liability
specifically relates to the Unit or depends on cash flow of such Unit for
repayment (as provided in an assumption of debt, guaranty or other agreement),
all indebtedness and liabilities of other Persons assumed or guaranteed by any
Person or in respect of which such Person is secondarily or contingently liable
whether by any agreement to acquire indebtedness and liabilities or to supply or
advance funds or otherwise and (c) all indebtedness and liabilities secured by
any Lien on any property used in the operation of such Unit, to the extent not
included pursuant to clauses (a) and (b) of clause (ii) of this definition.

          "Information Certificate" shall mean the Information Certificate
          -------------------------
attached to the Security Agreement.

         "Instrument" or "Instruments" shall have the meaning accorded to such
         ------------    -------------
term in the UCC.

         "Insurance Proceeds" means, at any time, all insurance proceeds or
         --------------------
 payments to which Debtor may be or become entitled by reason of any casualty
 with respect to a Unit under the insurance policies required to be maintained
 pursuant to the Security Agreement plus (i) the amounts of any deductibles
 under such insurance policies; (ii) if Debtor fails to maintain any of the
 insurance policies required under the Security Agreement, the amounts which
 would have been available with respect to such casualty had Debtor maintained
 such insurance policies; and (iii) all insurance proceeds and payments to which
 Debtor may be or become entitled, including, without limitation, pursuant to
 title insurance or by reason of any casualty with respect to any Unit under any
 other insurance policy coverage maintained by Debtor.

          "Insurance Requirements" shall have the meaning accorded to such terms
          ------------------------
in the Security Agreement.

         "Interest Rate" shall have the meaning accorded to such term in the
         ----------------
Note.

         "Inventory" shall have the meaning accorded to such term in the UCC.
         -----------

         "Investment Property" shall have the meaning accorded to such term in
         ---------------------
the UCC.

                                     -5-
<PAGE>

         "Judgment" shall mean any order, decision, decree, award or injunction
         ----------
of any Governmental Authority.

         "Key Individuals" shall have the meaning as set forth in the Security
         -----------------
Agreement.

         "Late Payment Charge" shall have the meaning accorded to such term in
         ---------------------
paragraph 4 of the Note.

          "Law" shall mean any applicable statute, law, code, rule, regulation
          -----
or ordinance.

         "Lease" or "Leases" shall mean the lease covering all or a portion of
         -------    --------
the Property (including the Lease part of the Principal Agreements executed by
Debtor in connection with the Property) and any other leases to which Debtor is
a party or in which Debtor owns an interest other than a Personal Property
Lease.

          "Lease Obligations" shall mean obligations under or in connection with
          -------------------
any Lease.

         "Letters of Credit" shall have the meaning accorded to such term in the
         -------------------
UCC.

         "License" or "Licenses" shall mean any license, permit, directive,
         ---------    ----------
authorization, approval or stipulation required to operate the Business at the
Property.

         "Lien" or "Liens" shall mean any pledge, security, title retention
         ------    -------
agreement, security interest, encumbrance, right of set off or offset, rights of
others, benefits, claims or other liens (including federal or state tax liens).

         "Litigation" shall mean any action, proceeding, litigation,
         ------------
investigation, arbitration, mediation, claim or Judgment.

         "Loan" or "Loans" shall mean the indebtedness of Debtor to Secured
         ------    -------
Party as evidenced by the Loan Documents.

         "Loan Document" or "Loan Documents" shall mean the Note, the Security
         ---------------    ----------------
Agreement, the Mortgage, and any other note, security agreement, mortgage, deed
of trust, deed to secure debt, Affiliate Guarantee, agreement of principals,
collateral assignments, and other contractual Obligations, filings (including
financing statements) and recordings executed, delivered or filed, including any
amendments, supplements, renewals, extensions replacements thereof, executed
between Debtor and Secured Party or by Debtor for the benefit of Secured Party.

         "Loss" shall have the meaning accorded to such term in Section 2.22 of
         ------
the Security Agreement.

         "Loss Proceeds" shall have the meaning accorded to such term in Section
         ---------------
2.22 of the Security Agreement.

         "Margin Stock" shall have the meaning accorded to such term in
         --------------
Regulation G, U, T or X of the Board of Governors of the Federal Reserve System,
as amended.

         "Material Adverse Effect" shall mean any material adverse effect on the
         -------------------------
Debtor or any Scheduled Affiliate, its financial condition or property, the
Business or the Property.

         "Maturity Date" shall have the meaning accorded to such term in the
         ---------------
Note.

         "Minimum Debtor FCCR" shall have the meaning accorded to such term in
         ---------------------
the Security Agreement.

         "Minimum CU FCCR" shall have the meaning accorded to such term in the
         -----------
Security Agreement.

         "Minimum Unit FCCR" shall have the meaning accorded to such term in the
         -------------
Security Agreement

                                      -6-
<PAGE>

          "Money" shall have the meaning accorded to such term in the UCC.
          -------

          "Monthly Payment" shall have the meaning accorded to such term in the
          -----------------
Note.

          "Mortgage" or "Mortgages" shall collectively mean that certain
          ----------    -----------
mortgage or deed to secure debt (whether one or more) executed as security for
the Note and covering the Property.

         "Negative Pledge Properly" shall mean the real and personal property
         --------------------------
subject to the Negative Pledge Agreement executed by the Debtor to Secured Party
on or about the date hereof

          "Non-Business Day" shall mean any date other than a Business Day.
          ------------------

         "Non-Recurring Items" shall mean, with respect to any Person or any
         ---------------------
Unit, items of the sum (whether positive or negative) of revenue minus expenses
that, in the judgment of the Secured Party, are unusual in nature and occur
infrequently and are not representative of the ongoing/future earnings or
expenses of the Person or any Unit.

         "Note" shall mean the Secured Promissory Note made by Debtor payable to
         ------
Secured Party evidencing the Loan.

         "Obligations" shall mean all of Debtor's Indebtedness, obligations and
         -------------
liabilities to Secured Party evidenced by, arising under or in connection with
the Note (including, without limitation, indebtedness, obligations and
liabilities in respect of principal, interest, and Prepayment Premium Amount),
the Security Agreement, or any of the other Loan Documents (executed between
Debtor and Secured Party or by Debtor for the benefit of Secured Party), and any
future advances thereon, renewals, extensions, modifications, amendments,
substitutions and consolidations thereof, or any other agreement with Secured
Party under or in connection with the Loan, including Debtor's obligations to
pay (or reimburse Secured Party for) all costs and expenses (including attorneys
fees and disbursements) incurred by Secured Party in obtaining, maintaining,
protecting and preserving its interest in the Collateral or its security
interest therein, foreclosing, retaking, holding, preparing for sale or lease,
selling or otherwise disposing or realizing on the Collateral or in exercising
its rights hereunder or as secured party under the UCC, any other applicable Law
or Loan Document, and all other indebtedness, obligations and liabilities of any
kind of Debtor to Secured Party now or hereafter existing (including future
advances whether or not pursuant to commitment), arising directly between Debtor
and Secured Party or acquired outright, conditionally or as collateral security
from another, absolute or contingent, joint and/or several, secured, due or not
due, contractual or tortious, liquidated or unliquidated, arising by operation
of law or otherwise, or direct or indirect, including Debtor's liabilities to
Secured Party a  member, partner or equity owner of any Person or group, and
whether incurred by Debtor as principal, surety, endorser, guarantor,
accommodation party or otherwise, including all amounts which would be payable
or owing to Secured Party but for the fact they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Debtor or any Person.

         "Obligees" shall have the meaning accorded to such term in Section 7 of
         ----------
the Note.

         "Obligors" shall have the meaning accorded to such term in Section 7 of
         ----------
the Note.

         "Organizational Document" or "Organizational Documents" shall mean for
         -------------------------    --------------------------
any Person any agreement, document, instrument or other writing or understanding
and any Requirement of Law relating to the formation or organization of such
Person including certificate or articles of incorporation or formation, bylaws,
partnership, trust, operating or limited liability company agreement, partner,
trustees, shareholders or members agreement, and resolutions, consents and
actions of directors, officers, managers, trustees, partners, members,
shareholders or owners.

         "Other Liable Party" shall have the meaning accorded to such term in
         --------------------
the Security Agreement.

         "Owner's Compensation Adjustments" shall mean, with respect to any
Person and any period, the difference (whether positive or negative) between (x)
the salaries, wages, benefits, compensation, reimbursements, travel and
entertainment and other items deemed to be owner's compensation incurred by such
Person in such period minus (y) the amount of salaries, wages, benefits,
compensation, reimbursements, travel and entertainment and other items deemed to

                                     -7-
<PAGE>

be owner's compensation which in the judgment of the Secured Party are
reasonable and customary for Persons whose responsibilities are similar to those
of Persons working for such Person in businesses similar to the Business.

         "Payment Date" shall have the meaning accorded to such term in the
         --------------
Note.

         "Payments to Affiliates" shall mean any dividend, distribution or
         ------------------------
payment of money or other property or assets by Debtor to any direct or indirect
equity owner of Debtor or any Affiliate of Debtor.

         "Permitted Encumbrance" or "Permitted Encumbrances shall have the
         -------------------------- -----------------------
meaning accorded to such term in Section 2.16 of the Security Agreement.

         "Person" or "Persons" shall mean any natural person, corporation,
         --------    ---------
partnership, limited liability company, trust, association, firm, entity or
Governmental Authority.

         "Personal Property Lease" shall mean any lease of Equipment or other
         -------------------------
personal property deemed an operating lease under GAAP.

         "Personality Charges" shall mean, with respect to any period, payments
         ---------------------
on any Personal Property Lease.

          Prepayment Amount" shall have the meaning accorded to such term in the
          ------------------
Note.

         "Prepayment Premium Amount" shall have the meaning accorded to such
         ---------------------------
term in the Note.

         "Prepayment Date" shall have the meaning accorded to such term in the
         -----------------
Note.

         "Principal Agreement" or "Principal Agreements" shall mean any Branded
         ---------------------    ----------------------
Contract, License or Lease, or other agreement material to the operation and
management of the Unit, as set forth on the Information Certificate of the
Security Agreement.

         "Principal Amount" shall have the meaning accorded to such ten-n in the
         ------------------
Note.

         "Proceeds" shall include Insurance Proceeds, Loss Proceeds and
         ----------
"proceeds" within the meaning accorded to such term in the UCC.

         "Property" or "Properties" shall mean the real property or leasehold
         ----------    ------------
interests therein, as applicable, (whether one or more) upon which the Debtor
operates the Business as more particularly described in Exhibit A of the
Security Agreement and in the other Loan Documents (and as also referred to as
"Mortgaged Property" or "Security Property" in the other Loan Documents)-

         "Realty Charges" shall mean, with respect to any period, payments on
         ----------------
Lease Obligations.

         "Records" shall mean any books, records, writings (including any
electronic data) pertaining to the Business, a Unit and the Collateral.

         "Requirement of Law" or "Requirements of Law" shall mean any
         --------------------    ---------------------
requirement, direction, policy or procedure of any Law or License, Judgment, or
Consent or Other Action.

         "Required Endorsements" shall have the meaning accorded to such term in
         -----------------------
the Security Agreement.

         "Scheduled Affiliate" or "Scheduled Affiliates" shall have the meaning
         ---------------------    ----------------------
accorded to such term in Section 2.4 of the Security Agreement.

                                     -8-
<PAGE>

         "Sole Discretion" shall mean with respect to any decision or action
         -----------------
(including granting of any consent or approval) the discretion to make or take
or fail to take or make any decision or action with or without any reason,
taking into account such factors, if any, as the decision maker or action taker
determines (including self interest), and any decision or action may be subject
to any such conditions or no conditions as the decision maker or action taker
determines and shall be final and conclusive.

         "Security Agreement" shall mean the Security Agreement between Debtor
         --------------------
and Secured Party, relating to the Loan and, among other things, Granting the
Secured Party a Lien on the Collateral.

         "Target Debtor FCCR" shall have the meaning accorded to such term in
         --------------------
the Security Agreement.

         "Target CU FCCW" shall have the meaning accorded to such term in the
         ----------------
Security Agreement.

         "Taxes and Other Charges" shall mean all taxes, assessments and other
         -------------------------
governmental charges, ground rents, or other rents, rates and charges, excises,
levies, fees and other charges (public or private) which may be assessed,
levied, confirmed or imposed on, or in respect of or be a lien upon the
Collateral, a Unit or the Business or any part thereof or any interest therein.

         "Tax Party" or "Tax Parties" shall have the meaning accorded to such
         -----------    -------------
term in Section 2.24 of the Security Agreement.

         "UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial
         -----    -------------------------
Code as adopted in the State where the Property is located.

         "Unit" or "Units" shall collectively mean the Business, Collateral and
         ------    -------
Property and other property and assets related to the Business or located at the
Property.

         "Unit EBITDAR" shall mean, with respect to a Unit for any business
         --------------
conducted at such Unit, the net income (loss) for such business plus, in each
case, to the extent previously deducted in calculating net income (loss), (i)
income taxes, (ii) principal and interest payments on all of its indebtedness of
such business, (iii) all non-cash charges including depreciation and
amortization, (iv) the amount of expenses paid/allocated in respect of Corporate
G&A, (v) Non-Recurring Items, (vi) Realty Charges, (vii) Personalty Charges, and
(viii) other adjustments, in the Sole Discretion of Secured Party, deemed
appropriate, minus Allocated G&A.

         "Unit FCCR" shall mean for any Unit, the FCCR calculated for such Unit.
         -----------

         "Unit Fixed Charges" shall mean, with respect to any Unit, (x)
         --------------------
aggregate principal and interest payments on all Indebtedness plus (y) payments
on Realty Charges plus (z) payments in respect of Personalty Charges each of
which relates to said Unit.

         "Waivers" shall have the meaning accorded to such term in the Note.

                           [Signature Page Follows]

                                      -9-
<PAGE>

         The foregoing terms contained in this Definitions Schedule as
applicable to the Security Agreement to which this schedule is attached,
executed by the undersigned Debtor and American Commercial Capital, LLC, a
Delaware limited liability company, are approved and agreed to by the
undersigned, as of September 14, 2000.

                                      DEBTOR:
                                      ------

                                      SAILORMEN, INC.,
                                      a Florida corporation

                                      By:__________________
                                         Name: Robert S. Berg
                                         Title: Chief Executive Officer

                                      INTERFOODS OF AMERICA, INC.,
                                      a Nevada corporation

                                      By: _________________
                                          Name: Robert S. Berg
                                          Title: Chief Executive Officer

                                     -10-<PAGE>
                                                                     EXHIBIT 4.3

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

                            STILLWATER MINING COMPANY

                                       and

                        _____________________, as Trustee

                                    Indenture

                           Dated as of _______________

                                 Debt Securities

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

<PAGE>

                             CROSS REFERENCE SHEET*

                                     Between

     Provisions of Trust Indenture Act (as defined herein) and Indenture dated
as of ________________ between STILLWATER MINING COMPANY and ______________,
Trustee:

<Table>
<Caption>
SECTION OF THE ACT                                                                             SECTION OF INDENTURE

<S>                                                                                            <C>
310(a)(1) and (2)...............................................................................................6.9
310(a)(3) and (4)......................................................................................Inapplicable
310(b).................................................................................6.8 and 6.10(a), (b) and (d)
310(c).................................................................................................Inapplicable
311(a).........................................................................................................6.14
311(b).........................................................................................................6.14
311(c).................................................................................................Inapplicable
312(a)..................................................................................................4.1 and 4.2
312(b)..........................................................................................................4.2
312(c)..........................................................................................................4.2
313(a)..........................................................................................................4.3
313(b)(1)..............................................................................................Inapplicable
313(b)(2).......................................................................................................4.3
313(c)...................................................................................4.3, 5.11, 6.10, 6.11, 8.2
                                                                                                           and 12.2
313(d)..........................................................................................................4.3
314(a)..................................................................................................3.5 and 4.2
314(b).................................................................................................Inapplicable
314(c)(1) and (2)..............................................................................................11.5
314(c)(3)..............................................................................................Inapplicable
314(d).................................................................................................Inapplicable
314(e).........................................................................................................11.5
314(f).................................................................................................Inapplicable
315(a), (c) and (d).............................................................................................6.1
315(b).........................................................................................................5.11
315(e).........................................................................................................5.12
316(a)(1)..............................................................................................5.9 and 5.10
316(a)(2)..............................................................................................Not required
316(a) (last sentence)..........................................................................................7.4
316(b)..........................................................................................................5.7
317(a)..........................................................................................................5.2
317(b)...............................................................................................3.4(a) and (b)
318(a).........................................................................................................11.7
</Table>

* This Cross Reference Sheet is not part of the Indenture.

<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               PAGE
                                                                                                               ----

<S>                                                                                                            <C>
                                                      ARTICLE I
                                                    DEFINITIONS

SECTION 1.1  CERTAIN TERMS DEFINED................................................................................1

                                                     ARTICLE II
                                                     SECURITIES

SECTION 2.1  FORMS GENERALLY......................................................................................7
SECTION 2.2  FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION......................................................7
SECTION 2.3  AMOUNT UNLIMITED; ISSUABLE IN SERIES.................................................................8
SECTION 2.4  AUTHENTICATION AND DELIVERY OF SECURITIES...........................................................11
SECTION 2.5  EXECUTION OF SECURITIES.............................................................................14
SECTION 2.6  CERTIFICATE OF AUTHENTICATION.......................................................................14
SECTION 2.7  DENOMINATION AND DATE OF SECURITIES; PAYMENT
                    OF INTEREST..................................................................................14
SECTION 2.8  REGISTRATION, TRANSFER AND EXCHANGE.................................................................15
SECTION 2.9  MUTILATED, DEFACED, DESTROYED, LOST AND
                    STOLEN SECURITIES............................................................................19
SECTION 2.10  CANCELLATION OF SECURITIES; DESTRUCTION THEREOF....................................................20
SECTION 2.11  TEMPORARY SECURITIES...............................................................................20

                                                     ARTICLE III
                                              COVENANTS OF THE ISSUER

SECTION 3.1  PAYMENT OF PRINCIPAL AND INTEREST...................................................................21
SECTION 3.2  OFFICES FOR PAYMENTS, ETC...........................................................................21
SECTION 3.3  APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE..................................................22
SECTION 3.4  PAYING AGENTS.......................................................................................22
SECTION 3.5  COMPLIANCE CERTIFICATES.............................................................................23
SECTION 3.6  CORPORATE EXISTENCE.................................................................................24

                                                     ARTICLE IV
                                       SECURITYHOLDER LISTS AND REPORTS BY THE
                                               ISSUER AND THE TRUSTEE

SECTION 4.1  ISSUER TO FURNISH TRUSTEE INFORMATION AS TO
                    NAMES AND ADDRESSES OF SECURITYHOLDERS.......................................................24
SECTION 4.2  REPORTS BY THE ISSUER...............................................................................24
SECTION 4.3  REPORTS BY THE TRUSTEE..............................................................................25
</Table>

                                        i
<PAGE>

<Table>
<Caption>
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                                                                                                               ----

<S>                                                                                                            <C>
                                                      ARTICLE V
                                    REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                                                ON EVENT OF DEFAULT

SECTION 5.1  EVENT OF DEFAULT DEFINED, ACCELERATION OF
                    MATURITY; WAIVER OF DEFAULT..................................................................26
SECTION 5.2  COLLECTION OF INDEBTEDNESS BY TRUSTEE;
                    TRUSTEE MAY PROVE DEBT.......................................................................30
SECTION 5.3  APPLICATION OF PROCEEDS.............................................................................32
SECTION 5.4  SUITS FOR ENFORCEMENT...............................................................................33
SECTION 5.5  RESTORATION OF RIGHTS ON ABANDONMENT OF
                    PROCEEDINGS..................................................................................33
SECTION 5.6  LIMITATIONS ON SUITS BY SECURITY HOLDERS............................................................34
SECTION 5.7  UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO
                    INSTITUTE CERTAIN SUITS......................................................................34
SECTION 5.8  POWERS AND REMEDIES CUMULATIVE; DELAY OR
                    OMISSION NOT WAIVER OF DEFAULT...............................................................34
SECTION 5.9  CONTROL BY HOLDERS OF SECURITIES....................................................................35
SECTION 5.10  WAIVER OF PAST DEFAULTS............................................................................35
SECTION 5.11  TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY
                    WITHHOLD IN CERTAIN CIRCUMSTANCES............................................................36
SECTION 5.12  RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING
                    TO PAY COSTS.................................................................................36

                                                     ARTICLE VI
                                               CONCERNING THE TRUSTEE

SECTION 6.1  DUTIES AND RESPONSIBILITIES OF THE TRUSTEE;
                    DURING DEFAULT; PRIOR TO DEFAULT.............................................................37
SECTION 6.2  CERTAIN RIGHTS OF THE TRUSTEE.......................................................................38
SECTION 6.3  TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION
                    OF SECURITIES OR APPLICATION OF PROCEEDS THEREOF.............................................39
SECTION 6.4  TRUSTEE AND AGENTS MAY HOLD SECURITIES OR
                    COUPONS; COLLECTIONS, ETC....................................................................39
SECTION 6.5  MONEYS HELD BY TRUSTEE..............................................................................39
SECTION 6.6  COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND
                    ITS PRIOR CLAIM..............................................................................40
SECTION 6.7  RIGHT OF TRUSTEE TO RELY ON OFFICER'S
                    CERTIFICATE, ETC.............................................................................40
</Table>

                                       ii
<PAGE>

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<Caption>
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                                                                                                               ----

<S>                                                                                                            <C>
SECTION 6.8  QUALIFICATION OF TRUSTEE: CONFLICTING INTERESTS.....................................................40
SECTION 6.9  PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE.........................................................41
SECTION 6.10  RESIGNATION AND REMOVAL; APPOINTMENT OF
                    SUCCESSOR TRUSTEE............................................................................41
SECTION 6.11  ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE.....................................................42
SECTION 6.12  MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
                    TO BUSINESS OF TRUSTEE.......................................................................44
SECTION 6.13  PREFERENTIAL COLLECTION OF CLAIMS AGAINST
                    THE ISSUER...................................................................................44
SECTION 6.14  APPOINTMENT OF AUTHENTICATING AGENT................................................................44

                                                     ARTICLE VII
                                           CONCERNING THE SECURITYHOLDERS

SECTION 7.1  EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS.........................................................45
SECTION 7.2  PROOF OF EXECUTION OF INSTRUMENTS AND OF
                    HOLDING OF SECURITIES........................................................................46
SECTION 7.3  HOLDERS TO BE TREATED AS OWNERS.....................................................................46
SECTION 7.4  SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING...................................................46
SECTION 7.5  RIGHT OF REVOCATION OF ACTION TAKEN.................................................................47

                                                    ARTICLE VIII
                                              SUPPLEMENTAL INDENTURES

SECTION 8.1  SUPPLEMENTAL INDENTURES WITHOUT CONSENT
                    OF SECURITYHOLDERS...........................................................................47
SECTION 8.2  SUPPLEMENTAL INDENTURES WITH CONSENT
                    OF SECURITYHOLDERS...........................................................................49
SECTION 8.3  EFFECT OF SUPPLEMENTAL INDENTURE....................................................................51
SECTION 8.4  DOCUMENTS TO BE GIVEN TO TRUSTEE....................................................................51
SECTION 8.5  NOTATION ON SECURITIES IN RESPECT OF
                    SUPPLEMENTAL INDENTURES......................................................................51

                                                     ARTICLE IX
                                     CONSOLIDATION, MERGER, SALE OR CONVEYANCE

SECTION 9.1  ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.................................................51
SECTION 9.2  SUCCESSOR CORPORATION SUBSTITUTED...................................................................52
SECTION 9.3  OPINION OF COUNSEL TO BE GIVEN TO TRUSTEE...........................................................52
</Table>

                                      iii
<PAGE>

<Table>
<Caption>
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<S>                                                                                                            <C>
                                                      ARTICLE X
                                      SATISFACTION AND DISCHARGE OF INDENTURE;
                                                  UNCLAIMED MONEYS

SECTION 10.1  SATISFACTION AND DISCHARGE OF INDENTURE............................................................52
SECTION 10.2  APPLICATION BY TRUSTEE OF FUNDS DEPOSITED
                    FOR PAYMENT OF SECURITIES....................................................................56
SECTION 10.3  REPAYMENT OF MONEYS HELD BY PAYING AGENT...........................................................56
SECTION 10.4  RETURN OF MONEYS HELD BY TRUSTEE AND PAYING
                    AGENT UNCLAIMED FOR TWO YEARS................................................................56
SECTION 10.5  INDEMNITY FOR U.S. GOVERNMENT OF OBLIGATIONS.......................................................57
SECTION 10.6  EFFECT ON SUBORDINATION PROVISIONS.................................................................57

                                                     ARTICLE XI
                                              MISCELLANEOUS PROVISIONS

SECTION 11.1  INCORPORATORS, STOCKHOLDERS, OFFICERS AND
                    DIRECTORS OF ISSUER EXEMPT FROM INDIVIDUAL
                    LIABILITY....................................................................................57
SECTION 11.2  PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF
                    PARTIES AND HOLDERS OF SECURITIES AND COUPONS................................................58
SECTION 11.3  SUCCESSORS AND ASSIGNS OF ISSUER BOUND
                    BY INDENTURE.................................................................................58
SECTION 11.4  NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND
                    HOLDERS OF SECURITIES AND COUPONS............................................................58
SECTION 11.5  OFFICER'S CERTIFICATES AND OPINIONS OF COUNSEL;
                    STATEMENTS TO BE CONTAINED THEREIN...........................................................59
SECTION 11.6  PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS....................................................60
SECTION 11.7  CONFLICT OF ANY PROVISION OF INDENTURE WITH
                    TRUST INDENTURE ACT..........................................................................60
SECTION 11.8  THIS INDENTURE AND EACH SECURITY AND COUPON
                    SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS
                    OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL
                    BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
                    LAWS OF SUCH STATE INCLUDING, WITHOUT LIMITATION,
                    SECTION 5-1401 OF THE NEW YORK GENERAL
                    OBLIGATIONS LAW..............................................................................60
SECTION 11.9  COUNTERPARTS.......................................................................................61
SECTION 11.10  EFFECT OF HEADINGS................................................................................61
SECTION 11.11  SECURITIES IN A FOREIGN CURRENCY..................................................................61
</Table>

                                       iv
<PAGE>

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<Caption>
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                                                                                                               ----

<S>                                                                                                            <C>
SECTION 11.12  JUDGMENT CURRENCY.................................................................................61
SECTION 11.13  AGREEMENT TO SUBORDINATE..........................................................................62

                                                     ARTICLE XII
                                     REDEMPTION OF SECURITIES AND SINKING FUNDS

SECTION 12.1  APPLICABILITY OF ARTICLE...........................................................................62
SECTION 12.2  NOTICE OF REDEMPTION; PARTIAL REDEMPTIONS..........................................................62
SECTION 12.3  PAYMENT OF SECURITIES CALLED FOR REDEMPTION........................................................64
SECTION 12.4  EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY
                    FOR SELECTION FOR REDEMPTION.................................................................65
SECTION 12.5  MANDATORY AND OPTIONAL SINKING FUNDS...............................................................65
</Table>

                                        v
<PAGE>

     THIS INDENTURE, dated as of __________, by and between STILLWATER MINING
COMPANY, a Delaware corporation (the "Issuer"), and _______________,
_______________, as trustee (the "Trustee"),

                                   WITNESSETH:

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

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

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

     NOW, THEREFORE:

     In consideration of the premises and the purchases of the Securities by the
holders thereof, the Issuer and the Trustee mutually covenant and agree for the
equal and proportionate benefit of the respective holders from time to time of
the Securities and of the coupons, if any, appertaining thereto as follows:

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.1 CERTAIN TERMS DEFINED. The following terms (except as otherwise
expressly provided or unless the context otherwise clearly requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section. All other terms used in this
Indenture that are defined in the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), or the definitions of which in the Securities Act of
1933, as amended (the "Securities Act"), are referred to in the Trust Indenture
Act, including terms defined therein by reference to the Securities Act (except
as herein otherwise expressly provided or unless the context otherwise
requires), shall have the meaning assigned to such terms in the Trust Indenture
Act and in the Securities Act as in effect from time to time. All accounting
terms used herein and not expressly defined shall have the meanings assigned to
such terms in accordance with generally accepted accounting principles, and the
term "generally accepted accounting principles" means such accounting principles
as are generally accepted at the time of any computation unless a different time
shall be specified with respect to such series of Securities as provided for in
Section 2.3. 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,

                                       1
<PAGE>

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

     "Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor provision.

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

     "Authorized Newspaper" means a newspaper (which, in the case of The City of
New York, will, if practicable, be The Wall Street Journal (Eastern Edition))
published in an official or common language of the country of publication
customarily published at least once a day for at least five days in each
calendar week and of general circulation in The City of New York. If it shall be
impractical in the opinion of the Trustee to make any publication of any notice
required hereby in an Authorized Newspaper, any publication or other notice in
lieu thereof which is made or given with the approval of the Trustee shall
constitute a sufficient publication of such notice.

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

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

     "Business Day" means, with respect to any Security, a day other than any
day on which banking institutions in the city (or in any of the cities, if more
than one) in which amounts are payable, as specified in the form of such
Security, are authorized or required by any applicable law or regulation to be
closed.

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

     "Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered.

     "Coupon" means any interest coupon appertaining to an Unregistered
Security.

     "Covenant Defeasance" shall have the meaning set forth in Section 10.1(C).

     "Depositary" means, with respect to the Securities of any series issuable
or issued in the form of one or more Registered Global Securities, the Person
designated as Depositary by the Issuer pursuant to Section 2.3 until a successor
Depositary shall have become such pursuant

                                       2
<PAGE>

to the applicable provisions of this Indenture, and thereafter "Depositary"
shall mean or include each Person who is then a Depositary hereunder, and if at
any time there is more than one such Person, "Depositary" as used with respect
to the Securities of any such series shall mean the Depositary with respect to
the Registered Global Securities of that series.

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

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

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

     "Fair Value" when used with respect to any Voting Stock means the fair
value as determined in good faith by the Board of Directors of the Issuer.

     "Foreign Currency" means any coin, currency, currency unit or composite
currency, including, without limitation, the euro, issued by the government of
one or more countries, other than the United States of America or by any
internationally recognized union, confederation or association of such
governments.

     "Holder," "Holder of Securities," "Securityholder" or any other similar
terms mean (a) in the case of any Registered Security, the person in whose name
such Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof, and (b) in the case of any
Unregistered Security, the bearer of such Security, or any Coupon appertaining
thereto, as the case may be.

     "Indenture" means this instrument as originally executed and delivered or,
if amended or supplemented as herein provided, as so amended or supplemented or
both, and shall include the forms and terms of particular series of Securities
established as contemplated hereunder, provided, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to one or more series of Securities for which such person is
trustee, this instrument as originally executed and delivered or, if amended or
supplemented as herein provided, as so amended or supplemented or both, and
shall include the forms and terms of those particular series of Securities for
which such Person is Trustee established as contemplated hereunder, exclusive,
however, of any provisions or terms which relate solely to other series of
Securities for which such person is not Trustee, regardless of when such terms
or provisions were adopted.

     "IRS" means the Internal Revenue Service of the United States Department of
the Treasury, or any successor entity.

     "Issuer" means (except as otherwise provided in Article IX) Stillwater
Mining Company, a Delaware corporation, and, subject to Article IX, its
successors and assigns.

                                       3
<PAGE>

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

     "Judgment Currency" has the meaning set forth in Section 11.12.

     "Non-U.S. Person" means any person that is not a "U.S. person" as such term
is defined in Rule 902 of the Securities Act.

     "Officer's Certificate" means a certificate signed by the chairman of the
Board of Directors, the president or any vice president or the treasurer of the
Issuer and delivered to the Trustee. Each such certificate shall comply with
Section 314 of the Trust Indenture Act and include the statements provided for
in Section 11.5.

     "Opinion of Counsel" means an opinion in writing signed by legal counsel
who may be an employee of the Issuer or other counsel satisfactory to the
Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture
Act and include the statements provided for in Section 11.5.

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

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

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

          (I) Securities theretofore cancelled by the Trustee or delivered to
     the Trustee for cancellation;

          (II) Securities, or portions thereof, for the payment or redemption of
     which moneys or U.S. Government Obligations (as provided for in Section
     10.1) in the necessary amount shall have been deposited in trust with the
     Trustee or with any paying agent (other than the Issuer) or shall have been
     set aside, segregated and held in trust by the Issuer for the Holders of
     such Securities (if the Issuer shall act as its own paying agent),
     provided, that if such Securities, or portions thereof, are to be redeemed
     prior to the maturity thereof, notice of such redemption shall have been
     given as herein provided, or provisions satisfactory to the Trustee shall
     have been made for giving such notice; and

                                       4
<PAGE>

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

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

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

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

     "principal" whenever used with reference to the Securities or any Security
or any portion thereof, shall be deemed to include "and premium, if any,"
provided, however, that such inclusion of premium, if any, shall under no
circumstances result in the double counting of such premium for the purpose of
any calculation required hereunder.

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

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

     "Registered Security" means any Security registered on the Security
register of the Issuer.

     "Required Currency" shall have the meaning set forth in Section 11.12.

     "Responsible Officer" when used with respect to the Trustee means the
chairman of the board of directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the president, any vice president
(whether or not designated by numbers or words

                                       5
<PAGE>

added before or after the title "Vice President"), the cashier, the secretary,
the treasurer, any trust officer, any assistant trust officer, any assistant
vice president, any assistant cashier, any assistant secretary, any assistant
treasurer, or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.

     "Security" or "Securities" (except as otherwise provided in Section 7.4)
has the meaning stated in the first recital of this Indenture, or, as the case
may be, Securities that have been authenticated and delivered under this
Indenture.

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

     "Senior Indebtedness", when used with respect to the Subordinated
Securities of any series, shall have the meaning established pursuant to
Subsection 2.3(9) with respect to the Subordinated Securities of such series.

     "Senior Securities" means Securities other than Subordinated Securities.

     "Subordinated Securities" means Securities that by the terms established
pursuant to Subsection 2.3(9) are subordinated in right of payment to Senior
Indebtedness of the Issuer.

     "Subordination Provisions", when used with respect to the Subordinated
Securities of any series, shall have the meaning established pursuant to
Subsection 2.3(9) with respect to the Subordinated Securities of such series.

     "Subsidiary" means any corporation of which at least a majority of the
outstanding stock having the voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether or not at the time stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time of
determination directly or indirectly owned by the Issuer, or by one or more of
its Subsidiaries, or by the Issuer and one or more of its Subsidiaries.

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

     "Unregistered Security" means any Security other than a Registered
Security.

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

                                       6
<PAGE>

     "Voting Stock" means stock of any class or classes having general voting
power under ordinary circumstances to elect a majority of the board of
directors, managers or trustees of the corporation in question, provided, that,
for the purposes hereof, stock which carries only the right to vote
conditionally on the happening of an event shall not be considered voting stock
whether or not such event shall have happened.

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

                                   ARTICLE II

                                   SECURITIES

     SECTION 2.1 FORMS GENERALLY. The Securities of each series and the Coupons,
if any, to be attached thereto shall be substantially in such form (not
inconsistent with this Indenture) as shall be established by or pursuant to one
or more Board Resolutions (as set forth in a Board Resolution or, to the extent
established pursuant to but not set forth in a Board Resolution, an Officer's
Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or
legends or endorsements, not inconsistent with the provisions of this Indenture,
as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities and Coupons, if any, as evidenced by their execution of such
Securities and Coupons.

     The definitive Securities and Coupons, if any, 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 and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.

     SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The Trustee's
certificate of authentication on all Securities shall be in substantially the
following form:

                                       7
<PAGE>

     "This is one of the Securities referred to in the within-mentioned
Indenture.

                                       [                   ]
                                        -------------------
                                       as Trustee

                                       By
                                          --------------------------------------
                                          Authorized Signatory"

     If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Trustee's Certificate of
Authentication to be borne by the Securities of each such series shall be
substantially as follows:

     "This is one of the Securities referred to in the within-mentioned
Indenture.

                                       [                                       ]
                                        ---------------------------------------
                                       as Authenticating Agent

                                       By
                                          --------------------------------------
                                          Authorized Signatory"

     SECTION 2.3 AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.

     The Securities may be issued in one or more series. There shall be
established in or pursuant to one or more Board Resolutions (and to the extent
established pursuant to but not set forth in a Board Resolution, in an Officer's
Certificate detailing such establishment) or established in one or more
indentures supplemental hereto, prior to the initial issuance of Securities of
any series,

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

     (2) any limit upon the aggregate principal amount of the Securities of the
  series that may be authenticated and delivered under this Indenture (except
  for Securities

                                       8
<PAGE>

  authenticated and delivered upon registration of transfer of, or in exchange
  for, or in lieu of, other Securities of the series pursuant to Section 2.8,
  2.9, 2.11, 8.5 or 12.3);

     (3) if other than Dollars, the Foreign Currency or Foreign Currencies in
  which the Securities of the series are denominated;

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

     (5) the rate or rates (which may be fixed or variable) at which the
  Securities of the series shall bear interest, if any, the date or dates from
  which such interest shall accrue, on which such interest shall be payable, the
  terms and conditions of any deferral of interest and the additional interest,
  if any, thereon, the right, if any, of the Issuer to extend the interest
  payment periods and the duration of the extensions on the Subordinated
  Securities, and (in the case of Registered Securities) the date or dates on
  which a record shall be taken for the determination of Holders to whom
  interest is payable and/or the method by which such rate or rates or date or
  dates shall be determined;

     (6) the place or places where and the manner in which, the principal of and
  any interest on Securities of the series shall be payable, if other than as
  provided in Section 3.2;

     (7) the right, if any, of the Issuer to redeem Securities, in whole or in
  part, at its option and the period or periods within which, or the date or
  dates on which, the price or prices at which and any terms and conditions upon
  which Securities of the series may be so redeemed, pursuant to any sinking
  fund or otherwise;

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

     (9) if the Securities of such series are Subordinated Securities, the terms
  pursuant to which the Securities of such series will be made subordinate in
  right of payment to Senior Indebtedness and the definition of such Senior
  Indebtedness with respect to such series (in the absence of an express
  statement to the effect that the Securities of such series are subordinate in
  right of payment to all such Senior Indebtedness, the Securities of such
  series shall not be subordinate to Senior Indebtedness and shall not
  constitute Subordinated Securities); and, in the event that the Securities of
  such series are Subordinated Securities, a Board Resolution, Officer's
  Certificate or supplemental indenture, as the case may be, establishing the
  terms of such series which shall expressly

                                       9
<PAGE>

  state which articles, sections or other provisions thereof constitute the
  "Subordination Provisions" with respect to the Securities of such series;

     (10) if other than denominations of $1,000 and any integral multiple
  thereof in the case of Registered Securities, or $1,000 and $5,000 in the case
  of Unregistered Securities, the denominations in which Securities of the
  series shall be issuable;

     (11) the percentage of the principal amount at which the Securities will be
  issued and if other than the principal amount thereof, the portion of the
  principal amount of Securities of the series which shall be payable upon
  declaration of acceleration of the maturity thereof;

     (12) if other than the coin, currency or currencies in which the Securities
  of the series are denominated, the coin, currency or currencies in which
  payment of the principal of or interest on the Securities of such series shall
  be payable, including composite currencies or currency units;

     (13) if the principal of or interest on the Securities of the series are to
  be payable, at the election of the Issuer or a Holder thereof, in a coin or
  currency other than that in which the Securities are denominated, the period
  or periods within which, and the terms and conditions upon which, such
  election may be made;

     (14) if the amount of payments of principal of and interest on the
  Securities of the series may be determined with reference to an index or
  formula based on a coin, currency, composite currency or currency unit other
  than that in which the Securities of the series are denominated, the manner in
  which such amounts shall be determined;

     (15) whether the Securities of the series will be issuable as Registered
  Securities (and if so, whether such Securities will be issuable as Registered
  Global Securities) or Unregistered Securities (with or without Coupons), or
  any combination of the foregoing, any restrictions applicable to the offer,
  sale or delivery of Unregistered Securities or the payment of interest thereon
  and, if other than as provided in Section 2.8, the terms upon which
  Unregistered Securities of any series may be exchanged for Registered
  Securities of such series and vice versa;

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

     (17) if the Securities of the series are to be issuable in definitive form
  (whether upon original issue or upon exchange of a temporary Security of such
  series) only upon

                                       10
<PAGE>

  receipt of certain certificates or other documents or satisfaction of other
  conditions, the form and terms of such certificates, documents or conditions;

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

     (19) any deletion from modification of or addition to the Events of Default
  or covenants with respect to the Securities of such series;

     (20) if the Securities of the series are to be convertible into or
  exchangeable for any other security or property of the Issuer, including,
  without limitation, securities of another Person held by the Issuer or its
  Affiliate; and

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

     All Securities of any one series and Coupons, if any, appertaining thereto
shall be substantially identical, except in the case of Registered Securities as
to denomination and except as may otherwise be provided by or pursuant to the
Board Resolution or Officer's Certificate referred to above or as set forth in
any indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and may be issued from time to time without consent of
any Holder, consistent with the terms of this Indenture, if so provided by or
pursuant to such Board Resolution, such Officer's Certificate or in any
indenture supplemental hereto.

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

                                       11
<PAGE>

     (1) an Issuer Order requesting such authentication and setting forth
  delivery instructions if the Securities and Coupons, if any, are not to be
  delivered to the Issuer, provided that, with respect to Securities of a series
  subject to a Periodic Offering, (a) such Issuer Order may be delivered by the
  Issuer to the Trustee prior to the delivery to the Trustee of such Securities
  for authentication and delivery, (b) the Trustee shall authenticate and
  deliver Securities of such series for original issue from time to time, in an
  aggregate principal amount not exceeding the aggregate principal amount
  established for such series, pursuant to an Issuer Order or pursuant to
  procedures acceptable to the Trustee as may be specified from time to time by
  an Issuer Order, (c) the maturity date or dates, original issue date or dates,
  interest rate or rates and any other terms of Securities of such series shall
  be determined by an Issuer Order or pursuant to such procedures and (d) if
  provided for in such procedures, such Issuer Order may authorize
  authentication and delivery pursuant to oral or electronic instructions from
  the Issuer or its duly authorized agent or agents, which instructions, if
  oral, shall be promptly confirmed in writing;

     (2) any Board Resolution, Officer's Certificate and/or executed
  supplemental indenture referred to in Section 2.1 and 2.3 by or pursuant to
  which the forms and terms of the Securities and Coupons, if any, were
  established;

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

     (4) At the option of the Issuer, either one or more Opinions of Counsel, or
  a letter addressed to the Trustee permitting it to rely on one or more
  Opinions of Counsel, substantially to the effect that:

          (a) the form or forms of the Securities and Coupons, if any, have been
     duly authorized and established in conformity with the provisions of this
     Indenture;

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

                                       12
<PAGE>

          (c) such Securities and Coupons, if any, when executed by the Issuer
     and authenticated by the Trustee in accordance with the provisions of this
     Indenture and delivered to and duly paid for by the purchasers thereof, and
     subject to any conditions specified in such Opinion of Counsel, will have
     been duly issued under this Indenture, will be entitled to the benefits of
     this Indenture, and will be valid and binding obligations of the Issuer,
     enforceable in accordance with their respective terms except as the
     enforceability thereof may be limited by (i) bankruptcy, insolvency,
     reorganization, liquidation, moratorium, fraudulent transfer or similar
     laws affecting creditors' rights generally, (ii) rights of acceleration, if
     any, and (iii) the availability of equitable remedies may be limited by
     equitable principles of general applicability and such counsel need express
     no opinion with regard to the enforceability of Section 6.6 or of a
     judgment denominated in a currency other than Dollars.

     In rendering such opinions, any counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium, fraudulent transfer and
other similar laws affecting the rights and remedies of creditors and is subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely upon
opinions of other counsel (copies of which shall be delivered to the Trustee)
reasonably satisfactory to the Trustee, in which case the opinion shall state
that such counsel believes he and the Trustee are entitled so to rely. Such
counsel may also state that, insofar as such opinion involves factual matters,
he has relied, to the extent he deems proper, upon certificates of officers of
the Issuer and its subsidiaries and certificates of public officials.

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

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

                                       13
<PAGE>

this Security may not be transferred except as a whole by the Depositary to the
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."

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

     SECTION 2.5 EXECUTION OF SECURITIES. The Securities and each Coupon
appertaining thereto, if any, shall be signed on behalf of the Issuer by the
chairman or vice chairman of its Board of Directors or its president, or any
executive (senior or other), a vice president or its treasurer, under its
corporate seal (except in the case of Coupons) which may, but need not, be
attested. Such signatures may be the manual or facsimile signatures of the
present or any future such officers. The seal of the Issuer may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects in
any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly authenticated and
delivered by the Trustee.

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

     SECTION 2.6 CERTIFICATE OF AUTHENTICATION. Only such Securities as shall
bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. No Coupon shall be entitled to the
benefits of this Indenture or shall be valid and obligatory for any purpose
until the certificate of authentication on the Security to which such Coupon
appertains shall have been duly executed by the Trustee. The execution of such
certificate by the Trustee upon any Security executed by the Issuer shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Indenture.

     SECTION 2.7 DENOMINATION AND DATE OF SECURITIES; PAYMENT OF INTEREST. The
Securities of each series shall be issuable as Registered

                                       14
<PAGE>

Securities or Unregistered Securities in denominations established as
contemplated by Section 2.3 or, with respect to the Registered Securities of any
series, if not so established, in denominations of $1,000 and any integral
multiple thereof. If denominations of Unregistered Securities of any series are
not so established, such Securities shall be issuable in denominations of $1,000
and $5,000. The Securities of each series shall be numbered, lettered or
otherwise distinguished in such manner or in accordance with such plan as the
officers of the Issuer executing the same may determine with the approval of the
Trustee, as evidenced by the execution and authentication thereof.

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

     The person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date,
except if and to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the persons in whose names Outstanding
Registered Securities for such series are registered at the close of business on
a subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice given
by mail by or on behalf of the Issuer to the Holders of Registered Securities
not less than 15 days preceding such subsequent record date. The term "record
date" as used with respect to any interest payment date (except a date for
payment of defaulted interest) for the Securities of any series shall mean the
date specified as such in the terms of the Registered Securities of such series
established as contemplated by Section 2.3, or, if no such date is so
established, if such interest payment date is the first day of a calendar month,
the fifteenth day of the preceding calendar month or, if such interest payment
date is the fifteenth day of a calendar month, the first day of such calendar
month, whether or not such record date is a Business Day.

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

                                       15
<PAGE>

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

     Unregistered Securities (except for any temporary global Unregistered
Securities) and Coupons (except for Coupons attached to any temporary global
Unregistered Securities) shall be transferable by delivery.

     At the option of the Holder thereof, Registered Securities of any series
(other than a Registered Global Security, except as set forth below) may be
exchanged for a Registered Security or Registered Securities of such series
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Registered Securities to be exchanged at the agency of the
Issuer that shall be maintained for such purpose in accordance with Section 3.2
and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. If the Securities of any series are issued in both registered and
unregistered form, at the option of the Holder thereof, except as otherwise
specified pursuant to Section 2.3, Unregistered Securities of any series may be
exchanged for Registered Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.2, with, in the case
of Unregistered Securities that have Coupons attached, all unmatured Coupons and
all matured Coupons in default thereto appertaining, and upon payment, if the
Issuer shall so require, of the charges hereinafter provided. At the option of
the Holder thereof, if Unregistered Securities of any series, maturity date,
interest rate and original issue date are issued in more than one authorized
denomination, except as otherwise specified pursuant to Section 2.3, such
Unregistered Securities may be exchanged for Unregistered Securities of such
series having authorized denominations and an equal aggregate principal amount,
upon surrender of such Unregistered Securities to be exchanged at the agency of
the Issuer that shall be maintained for such purpose in accordance with Section
3.2 or as specified pursuant to Section 2.3, with, in the case of Unregistered
Securities that have Coupons attached, all unmatured Coupons and all matured
Coupons in default thereto appertaining, and upon payment, if the Issuer shall
so require, of the charges hereinafter provided. Registered Securities of any
series may not be exchanged for Unregistered Securities of such series unless
(1) otherwise specified pursuant to Section 2.3 and (2) the Issuer has delivered
to the Trustee an Opinion of Counsel that (x) the Issuer has received from the
IRS a ruling or (y) since the date hereof, there has been a change in the
applicable United States Federal income tax law, in either case to the effect
that the inclusion of terms permitting Registered Securities to be exchanged for
Unregistered Securities would result in no United States Federal income tax
effect adverse to the Issuer or to any Holder. Whenever any Securities are so
surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive. All Securities and Coupons, if any, surrendered upon any
exchange or transfer provided

                                       16
<PAGE>

for in this Indenture shall be promptly cancelled and disposed of by the Trustee
in accordance with its regular procedures, and the Trustee shall deliver a
certificate of disposition thereof to the Issuer.

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

     The Issuer or the registrar may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any exchange or registration of transfer of Securities. No service charge
shall be made for any such transaction.

     The Issuer shall not be required to exchange or register a transfer of (a)
any Securities of any series for a period of 15 days preceding the first mailing
of notice of redemption of Securities of such series to be redeemed or (b) any
Securities selected, called or being called for redemption, in whole or in part,
except, in the case of any Security to be redeemed in part, the portion thereof
not so to be redeemed.

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

     If at any time the Depositary for any Registered Securities of a series
represented by one or more Registered Global Securities notifies the Issuer that
it is unwilling or unable to continue as Depositary for such Registered
Securities or if at any time the Depositary for such Registered Securities shall
no longer be eligible under Section 2.4, the Issuer shall appoint a successor
Depositary eligible under Section 2.4 with respect to such Registered
Securities. If a successor Depositary eligible under Section 2.4 for such
Registered Securities is not appointed by the Issuer within 90 days after the
Issuer receives such notice or becomes aware of such ineligibility, the Issuer's
election pursuant to Section 2.3 that such Registered Securities be represented
by one or more Registered Global Securities shall no longer be effective and the
Issuer will execute, and the Trustee, upon receipt of an Officer's Certificate
for the authentication and delivery of definitive Securities of such series,
will authenticate and deliver, Securities of such series in definitive
registered form without coupons, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Registered
Global Security or Securities representing such Registered Securities in
exchange for such Registered Global Security or Securities.

                                       17
<PAGE>

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

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

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

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

     Upon the exchange of a Registered Global Security for Securities in
definitive registered form without coupons, in authorized denominations, such
Registered Global Security shall be cancelled by the Trustee or an agent of the
Issuer or the Trustee. Securities in definitive registered form without coupons
issued in exchange for a Registered Global Security pursuant to this Section 2.8
shall be registered in such names and in such authorized denominations as the
Depositary for such Registered Global Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee or
an agent of the Issuer or the Trustee. The Trustee or such agent shall deliver
such Securities to or as directed by the Persons in whose names such Securities
are so registered.

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

     Notwithstanding anything herein or in the terms of any series of Securities
to the contrary, none of the Issuer, the Trustee or any agent of the Issuer or
the Trustee (any of which,

                                       18
<PAGE>

other than the Issuer, shall rely on an Officer's Certificate and an Opinion of
Counsel) shall be required to exchange any Unregistered Security for a
Registered Security if such exchange would result in United States Federal
income tax consequences adverse to the Issuer (such as, for example, the
inability of the Issuer to deduct from its income, as computed for United States
Federal income tax purposes, the interest payable on the Unregistered
Securities) under then applicable United States Federal income tax laws.

     SECTION 2.9 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN SECURITIES. In
case any temporary or definitive Security or any Coupon appertaining to any
Security shall be mutilated, defaced, destroyed, lost or stolen, the Issuer in
its discretion may execute and, upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver, a new Security of the same
series, maturity date, interest rate and original issue date, bearing a number
or other distinguishing symbol not contemporaneously outstanding, in exchange
and substitution for the mutilated or defaced Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen with Coupons
corresponding to the Coupons appertaining to the Securities so mutilated,
defaced, destroyed, lost or stolen, or in exchange or substitution for the
Security to which such mutilated, defaced, destroyed, lost or stolen Coupon
appertained, with Coupons appertaining thereto corresponding to the Coupons so
mutilated, defaced, destroyed, lost or stolen. In every case, the applicant for
a substitute Security or Coupon shall furnish to the Issuer and to the Trustee
and any agent of the Issuer or the Trustee such security or indemnity as may be
required by them to indemnify and defend and to save each of them harmless and,
in every case of destruction, loss or theft, evidence to their satisfaction of
the destruction, loss or theft of such Security or Coupon and of the ownership
thereof, and in the case of mutilation or defacement shall surrender the
Security and related Coupons to the Trustee or such agent.

     Upon the issuance of any substitute Security or Coupon, the Issuer or the
registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) or its agent connected
therewith. In case any Security or Coupon which has matured or is about to
mature or has been called for redemption in full shall become mutilated or
defaced or be destroyed, lost or stolen, the Issuer may, instead of issuing a
substitute Security, pay or authorize the payment of the same or the relevant
Coupon (without surrender thereof except in the case of a mutilated or defaced
Security or Coupon), if the applicant for such payment shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as any of them may require to save each of them harmless,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee
evidence to their satisfaction of the destruction, loss or theft of such
Security or Coupons and of the ownership thereof.

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

                                       19
<PAGE>

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

     SECTION 2.10 CANCELLATION OF SECURITIES; DESTRUCTION THEREOF. All
Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if any, if surrendered to the Issuer or any agent of the
Issuer or the Trustee or any agent of the Trustee, shall be delivered to the
Trustee or its agent for cancellation or, if surrendered to the Trustee, shall
be cancelled by it; and no Securities or Coupons shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee or its agent shall dispose of cancelled Securities and Coupons held by
it in accordance with its regular procedures and deliver a certificate of
disposition to the Issuer. If the Issuer or its agent shall acquire any of the
Securities or Coupons, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities or Coupons
unless and until the same are delivered to the Trustee or its agent for
cancellation.

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

                                       20
<PAGE>

Coupons. Until so exchanged, the temporary Securities of any series shall be
entitled to the same benefits under this Indenture as definitive Securities of
such series, unless otherwise established pursuant to Section 2.3. The
provisions of this Section are subject to any restrictions or limitations on the
issue and delivery of temporary Unregistered Securities of any series that may
be established pursuant to Section 2.3 (including any provision that
Unregistered Securities of such series initially be issued in the form of a
single global Unregistered Security to be delivered to a depositary or agency
located outside the United States and the procedures pursuant to which
definitive or global Unregistered Securities of such series would be issued in
exchange for such temporary global Unregistered Security).

                                   ARTICLE III

                             COVENANTS OF THE ISSUER

     SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants and
agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, if any,
each of the Securities of such series (together with any additional amounts
payable pursuant to the terms of such Securities) at the place or places, at the
respective time or times and in the manner provided in such Securities and in
the Coupons, if any, appertaining thereto and in this Indenture. The interest on
Securities with Coupons attached (together with any additional amounts payable
pursuant to the terms of such Securities) shall be payable only upon
presentation and surrender of the several Coupons for such interest installments
as are evidenced thereby as they severally mature. If any temporary Unregistered
Security provides that interest thereon may be paid while such Security is in
temporary form, the interest on any such temporary Unregistered Security
(together with any additional amounts payable pursuant to the terms of such
Security) shall be paid, as to the installments of interest evidenced by Coupons
attached thereto, if any, only upon presentation and surrender thereof, and, as
to the other installments of interest, if any, only upon presentation of such
Securities for notation thereon of the payment of such interest, in each case
subject to any restrictions that may be established pursuant to Section 2.3. The
interest, if any, on Registered Securities (together with any additional amounts
payable pursuant to the terms of such Securities) shall be payable only to or
upon the written order of the Holders thereof and, at the option of the Issuer,
may be paid by wire transfer or by mailing checks for such interest payable to
or upon the written order of such Holders at their last addresses as they appear
on the Securities register of the Issuer.

     SECTION 3.2 OFFICES FOR PAYMENTS, ETC. So long as any Registered Securities
are authorized for issuance pursuant to this Indenture or are outstanding
hereunder, the Issuer will maintain in the Borough of Manhattan, The City of New
York, an office or agency where the Registered Securities of each series may be
presented for payment, where the Securities of each series may be presented for
exchange as is provided in this Indenture and, if applicable, pursuant to
Section 2.3 and where the Registered Securities of each series may be presented
for registration of transfer as in this Indenture provided.

                                       21
<PAGE>

     The Issuer will maintain one or more offices or agencies in a city or
cities located outside the United States (including any city in which such an
agency is required to be maintained under the rules of any stock exchange on
which the Securities of such series are listed) where the Unregistered
Securities, if any, of each series and Coupons, if any, appertaining thereto may
be presented for payment. No payment on any Unregistered Security or Coupon will
be made upon presentation of such Unregistered Security or Coupon at an agency
of the Issuer within the United States, nor will any payment be made by transfer
to an account in, or by mail to an address in, the United States unless pursuant
to applicable United States laws and regulations then in effect such payment can
be made without tax consequences adverse to the Issuer. Notwithstanding the
foregoing, payments in Dollars of Unregistered Securities of any series and
Coupons appertaining thereto which are payable in Dollars may be made at an
agency of the Issuer maintained in the Borough of Manhattan, The City of New
York if such payment in Dollars at each agency maintained by the Issuer outside
the United States for payment on such Unregistered Securities is illegal or
effectively precluded by exchange controls or other similar restrictions.

     The Issuer will maintain in the Borough of Manhattan, The City of New York,
an office or agency where notices and demands to or upon the Issuer in respect
of the Securities of any series, the Coupons appertaining thereto or this
Indenture may be served.

     The Issuer will give to the Trustee written notice of the location of each
such office or agency and of any change of location thereof. In case the Issuer
shall fail to maintain any agency required by this Section to be located in the
Borough of Manhattan, The City of New York, or shall fail to give such notice of
the location or for any change in the location of any of the above agencies,
presentations and demands may be made and notices may be served at the Corporate
Trust Office of the Trustee.

     The Issuer may from time to time designate one or more additional offices
or agencies where the Securities of a series and any Coupons appertaining
thereto may be presented for payment, where the Securities of that series may be
presented for exchange as provided in this Indenture and pursuant to Section 2.3
and where the Registered Securities of that series may be presented for
registration of transfer as in this Indenture provided, and the Issuer may from
time to time rescind any such designation, as the Issuer may deem desirable or
expedient; provided, that no such designation or rescission shall in any manner
relieve the Issuer of its obligations to maintain the agencies provided for in
this Section. The Issuer shall give to the Trustee prompt written notice of any
such designation or rescission thereof.

     SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE. The Issuer,
whenever necessary to avoid or fill a vacancy in the office of Trustee, will
appoint, in the manner provided in Section 6.9, a Trustee, so that there shall
at all times be a Trustee with respect to each series of Securities hereunder.

     SECTION 3.4 PAYING AGENTS. Whenever the Issuer shall appoint a paying agent
other than the Trustee with respect to the Securities of any series, it will
cause such paying

                                       22
<PAGE>

agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section,

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

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

     (c) that it will pay any such sums so held in trust by it to the Trustee
  upon the Trustee's written request at any time during the continuance of the
  failure referred to in the foregoing clause (b).

     The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent a sum
sufficient to pay such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of any
failure to take such action.

     If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the principal
of or interest on the Securities of such series, set aside, segregate and hold
in trust for the benefit of the Holders of the Securities of such series or the
Coupons appertaining thereto a sum sufficient to pay such principal or interest
so becoming due. The Issuer will promptly notify the Trustee of any failure to
take such action.

     Anything in this Section to the contrary notwithstanding, but subject to
Section 10.1, the Issuer may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to one or more or all series of
Securities hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for any such series by the Issuer or any paying
agent hereunder, as required by this Section, such sums to be held by the
Trustee upon the trusts herein contained.

     Anything in this Section to the contrary notwithstanding, the agreement to
hold sums in trust as provided in this Section is subject to the provisions of
Sections 10.3 and 10.4.

     SECTION 3.5 COMPLIANCE CERTIFICATES. The Issuer will furnish to the Trustee
on or before January 31 in each year (beginning with [      ]) a brief
certificate (which need not comply with Section 11.5) from the principal
executive, financial or accounting officer of the Issuer stating that in the
course of the performance by the signer of his or her duties as an officer of
the Issuer he or she would normally have knowledge of any default or non-

                                       23
<PAGE>

compliance by the Issuer in the performance of any covenants or conditions
contained in this Indenture, stating whether or not he or she has knowledge of
any such default or non-compliance and, if so, describing each such default or
non-compliance of which the signer has knowledge and the nature thereof.

     SECTION 3.6 CORPORATE EXISTENCE. Subject to Article IX, the Issuer will do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the rights (charter and statutory), licenses
and franchises of the Issuer and its Subsidiaries; provided, that the Issuer
shall not be required to preserve any such right, license or franchise, if, in
the judgment of the Issuer, the preservation thereof is no longer desirable in
the conduct of the business of the Issuer and its Subsidiaries taken as a whole
and the loss thereof is not disadvantageous in any material respect to the
Securityholders.

                                   ARTICLE IV

                     SECURITYHOLDER LISTS AND REPORTS BY THE
                             ISSUER AND THE TRUSTEE

     SECTION 4.1 ISSUER TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND ADDRESSES
OF SECURITYHOLDERS. If and so long as the Trustee shall not be the Security
registrar for the Securities of any series, the Issuer and any other obligor on
the Securities will furnish or cause to be furnished to the Trustee a list in
such form as the Trustee may reasonably require of the names and addresses of
the Holders of the Registered Securities of such series pursuant to Section 312
of the Trust Indenture Act:

     (a) semi-annually not more than 5 days after each record date for the
  payment of interest on such Registered Securities, as hereinabove specified,
  as of such record date and on dates to be determined pursuant to Section 2.3
  for non-interest bearing Registered Securities in each year; and

     (b) at such other times as the Trustee may reasonably request in writing,
  within thirty days after receipt by the Issuer of any such request as of a
  date not more than 15 days prior to the time such information is furnished.

     SECTION 4.2 REPORTS BY THE ISSUER. The Issuer covenants to file with the
Trustee, within 15 days after the Issuer is required to file the same with the
Commission, copies of the annual reports and of the information, documents, and
other reports that the Issuer may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act or pursuant to
Section 314 of the Trust Indenture Act.

                                       24
<PAGE>

     SECTION 4.3 REPORTS BY THE TRUSTEE.

     (a) On or before the first July 15 which occurs not less than 60 days after
  the earliest date of issuance of any Securities and on or before July 15 in
  each year thereafter, so long as any Securities are Outstanding hereunder, the
  Trustee shall transmit by mail as provided below to the Securityholders of
  each series of outstanding Securities, as hereinafter in this Section
  provided, a brief report dated as of the preceding May 15 with respect to:

          (i) its eligibility under Section 6.9 and its qualification under
     Section 6.8, or in lieu thereof, if to the best of its knowledge it has
     continued to be eligible and qualified under such Sections, a written
     statement to such effect;

          (ii) the character and amount of any advances (and if the Trustee
     elects to so state, the circumstances surrounding the making thereof) made
     by the Trustee (as such) which remain unpaid on the date of such report and
     for the reimbursement of which it claims or may claim a lien or charge,
     prior to that of the Securities of such series, on any property or funds
     held or collected by it as Trustee, except that the Trustee shall not be
     required (but may elect) to report such advances if such advances so
     remaining unpaid aggregate not more than 0.5% of the principal of the
     Securities of such series outstanding on the date of such report;

          (iii) the amount, interest rate and maturity date of all other
     indebtedness owing by the Issuer (or any other obligor on the Securities of
     such series) to the Trustee in its individual capacity on the date of such
     report, with a brief description of any property held as collateral
     security therefor, except any indebtedness based upon a creditor
     relationship;

          (iv) the property and funds, if any, physically in the possession of
     the Trustee (as such) in respect of the Securities of such series on the
     date of such report;

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

          (vi) any action taken by the Trustee in the performance of its duties
     under this Indenture which the Trustee has not previously reported and
     which in the Trustee's opinion materially affects the Securities of such
     series, except action in respect of a default, notice of which has been or
     is to be withheld by it in accordance with the provisions of Section 5.11.

     (b) The Trustee shall transmit to the Securityholders of each series, as
  provided in subsection (c) of this Section, a brief report with respect to the
  character and amount of any advances (and if the Trustee elects so to state,
  the circumstances surrounding the

                                       25
<PAGE>

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

     (c) Reports pursuant to this Section shall be transmitted by mail to all
  Holders of Securities of such series, as the names and addresses of such
  Holders appear upon the Securities register as of a date not more than 15 days
  prior to the mailing thereof.

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

                                    ARTICLE V

                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                               ON EVENT OF DEFAULT

     SECTION 5.1 EVENT OF DEFAULT DEFINED, ACCELERATION OF MATURITY; WAIVER OF
DEFAULT. "Event of Default" with respect to Securities of any series, wherever
used herein, means any one of the following events which shall have occurred and
be continuing (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):

     (a) default in the payment of any installment of interest upon any of the
  Securities of such series as and when the same shall become due and payable,
  and continuance of such default for a period of 30 days provided that, a valid
  extension of an interest payment period by the Issuer in accordance with the
  terms of such Securities shall not constitute a failure to pay interest; or

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

                                       26
<PAGE>

     (c) default in the payment of any sinking fund installment as and when the
  same shall become due and payable by the terms of the Securities of such
  series; or

     (d) failure on the part of the Issuer duly to observe or perform any other
  of the covenants or agreements on the part of the Issuer in the Securities of
  such series or contained in this Indenture (other than a covenant or agreement
  included in this Indenture solely for the benefit of a series of Securities
  other than such series) for a period of 60 days after the date on which
  written notice specifying such failure, stating that such notice is a "Notice
  of Default" hereunder and demanding that the Issuer remedy the same, shall
  have been given by overnight or personal delivery, or by facsimile if
  confirmed by overnight or personal delivery, to the Issuer by the Trustee, or
  to the Issuer and the Trustee by the holders of at least 25% in aggregate
  principal amount of the Outstanding Securities of the series to which such
  covenant or agreement relates; or

     (e) a court having jurisdiction in the premises shall enter a decree or
  order for relief in respect of the Issuer in an involuntary case under any
  applicable bankruptcy, insolvency or other similar law now or hereafter in
  effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
  sequestrator (or similar official) of the Issuer for any substantial part of
  its or their property or ordering the winding up or liquidation of its or
  their affairs, and such decree or order shall remain unstayed and in effect
  for a period of 60 consecutive days; or

     (f) the Issuer shall commence a voluntary case under any applicable
  bankruptcy, insolvency or other similar law now or hereafter in effect, or
  consent to the entry of an order for relief in an involuntary case under any
  such law, or consent to the appointment or taking possession by a receiver,
  liquidator, assignee, custodian, trustee, sequestrator (or similar official)
  of the Issuer or for any substantial part of its or their property, or make
  any general assignment for the benefit of creditors; or

     (g) any other Event of Default provided in the supplemental indenture or
  Board Resolution under which such series of Securities is issued or in the
  form of Security for such series.

     If an Event of Default described in clause (a), (b) or (c) occurs and is
continuing, then, and in each and every such case, except for any series of
Securities the principal of which shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of each such affected series then Outstanding hereunder
(each such series voting as a separate class) by notice in writing to the Issuer
(and to the Trustee if given by Securityholders), may declare the entire
principal (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all Securities of such series, and the interest accrued
thereon, if any, to be due and payable immediately, and upon any such
declaration, the same shall become immediately due and payable.

                                       27
<PAGE>

     Except as otherwise provided in the terms of any series of Senior
Securities pursuant to Section 2.3, if an Event of Default described in clause
(d) or (g) above with respect to all series of the Senior Securities then
Outstanding, occurs and is continuing, then, and in each and every such case,
unless the Principal of all of the Senior Securities shall have already become
due and payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of all of the Senior Securities then Outstanding
hereunder (treated as one class) by notice in writing to the Issuer (and to the
Trustee if given by Securityholders), may declare the entire principal (or, if
the Senior Securities of any series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such series)
of all of the Senior Securities then Outstanding, and the interest accrued
thereon, if any, to be due and payable immediately, and upon such declaration,
the same shall become immediately due and payable. If an Event of Default
described in clause (e) or (f) above occurs and is continuing, then the
principal amount of all the Senior Securities then Outstanding, and the interest
accrued thereon, if any, shall become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder.

     Except as otherwise provided in the terms of any series of Subordinated
Securities pursuant to Section 2.3, if an Event of Default described in clause
(d) or (g) above with respect to all series of Subordinated Securities then
Outstanding, occurs and is continuing, then, and in each and every such case,
unless the Principal of all of the Subordinated Securities shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of all of the Subordinated Securities then
Outstanding hereunder (treated as one class) by notice in writing to the Issuer
(and to the Trustee if given by Securityholders), may declare the entire
principal (or, if the Subordinated Securities of any series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) of all of the Subordinated Securities then
Outstanding, and the interest accrued thereon, if any, to be due and payable
immediately, and upon such declaration, the same shall become immediately due
and payable. If an Event of Default described in clause (e) or (f) above occurs
and is continuing, then the principal amount of all the Subordinated Securities
then Outstanding, and the interest accrued thereto, if any, shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.

     If an Event of Default described in clause (d) or (g) occurs and is
continuing, which Event of Default is with respect to less than all series of
Senior Securities then Outstanding, then, and in each and every such case,
except for any series of Senior Securities the principal of which shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Senior Securities of each such
affected series then Outstanding hereunder (each such series voting as a
separate class) by notice in writing to the Issuer (and to the Trustee if given
by Securityholders), may declare the entire principal (or, if the Securities of
such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all
Securities of such series, and the interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration, the same shall become
immediately due and payable.

                                       28
<PAGE>

     If an Event of Default described in clause (d) or (g) occurs and is
continuing, which Event of Default is with respect to less than all series of
Subordinated Securities then Outstanding, then, and in each and every such case,
except for any series of Subordinated Securities the principal of which shall
have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Subordinated Securities of
each such affected series then Outstanding hereunder (each such series voting as
a separate class) by notice in writing to the Issuer (and to the Trustee if
given by Securityholders), may declare the entire principal (or, if the
Securities of such series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of such series) of all
Securities of such series, and the interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration, the same shall become
immediately due and payable.

     The foregoing provisions are subject to the condition that if, at any time
after the principal (or, if the Securities are Original Issue Discount
Securities, such portion of the principal as may be specified in the terms
thereof) of the Securities of any series (or of all the Securities, as the case
may be) shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided,

     (A) the Issuer shall pay or shall deposit with the Trustee a sum sufficient
  to pay

          (i) all matured installments of interest upon all the Securities of
     such series (or all the Securities, as the case may be); and

          (ii) the principal of any and all Securities of such series (or of all
     the Securities, as the case may be) which shall have become due otherwise
     than by acceleration; and

          (iii) interest upon such principal and, to the extent that payment of
     such interest is enforceable under applicable law, on overdue installments
     of interest, at the same rate as the rate of interest or Yield to Maturity
     (in the case of Original Issue Discount Securities) specified in the
     Securities of such series (or at the respective rates of interest or Yields
     to Maturity of all the Securities, as the case may be) to the date of such
     payment or deposit; and

          (iv) all amounts payable to the Trustee pursuant to Section 6.6; and

     (B) all Events of Default under the Indenture, other than the non-payment
  of the principal of Securities which shall have become due by acceleration,
  shall have been cured, waived or otherwise remedied as provided herein,

then and in every such case the Holders of a majority in aggregate principal
amount of all the Securities of such series voting as a separate class (or of
all the Securities, as the case may be,

                                       29
<PAGE>

voting as a single class), then Outstanding, by written notice to the Issuer and
to the Trustee, may waive all defaults with respect to such series (or with
respect to all the Securities, as the case may be) and rescind and annul such
declaration and its consequences, but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.

     For all purposes under this Indenture, if a portion of the principal of any
Original Issue Discount Securities shall have been accelerated and declared due
and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such Original Issue
Discount Securities.

     SECTION 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE DEBT.
The Issuer covenants that (a) in case default shall be made in the payment of
any installment of interest on any of the Securities of any series when such
interest shall have become due and payable, and such default shall have
continued for a period of 30 days, or (b) in case default shall be made in the
payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity of
the Securities of such series or upon any redemption or by declaration or
otherwise, then upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the Holders of the Securities of such series the whole amount
that then shall have become due and payable on all Securities of such series,
and such Coupons, for principal and interest, as the case may be (with interest
to the date of such payment upon the overdue principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series); and in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and such
other amount due the Trustee under Section 6.6 in respect of Securities of such
series.

     Until such demand is made by the Trustee, the Issuer may pay the principal
of and interest on the Securities of any series to the registered Holders,
whether or not the Securities of such series be overdue.

     In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name as trustee of an express trust, shall be
entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securities
and collect

                                       30
<PAGE>

in the manner provided by law out of the property of the Issuer or other obligor
upon the Securities, wherever situated, all the moneys adjudged or decreed to be
payable.

     In case there shall be pending proceedings relative to the Issuer or any
other obligor upon the Securities under Title 11 of the United States Code or
any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor, or in case
of any other comparable judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or property of the Issuer or
such other obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:

     (a) to file and prove a claim or claims for the whole amount of principal
  and interest (or, if the Securities of any series are Original Issue Discount
  Securities, such portion of the principal amount as may be specified in the
  terms of such series) owing and unpaid in respect of the Securities of any
  series, and to file such other papers or documents as may be necessary or
  advisable in order to have the claims of the Trustee (including any claim for
  amounts payable to the Trustee under Section 6.6) and of the Securityholders
  allowed in any judicial proceedings relative to the Issuer or other obligor
  upon the Securities, or to the creditors or property of the Issuer or such
  other obligor; and

     (b) unless prohibited by applicable law and regulations, to vote on behalf
  of the holders of the Securities of any series in any election of a receiver,
  assignee, trustee or a standby trustee in arrangement, reorganization,
  liquidation or other bankruptcy or insolvency proceedings, custodian or other
  person performing similar functions in respect of any such proceedings; and

     (c) to collect and receive any moneys or other property payable or
  deliverable on any such claims, and to distribute all amounts received with
  respect to the claims of the Securityholders and of the Trustee on their
  behalf; and any trustee, receiver, or liquidator, custodian or other similar
  official performing similar functions in respect of any such proceedings is
  hereby authorized by each of the Securityholders to make payments to the
  Trustee, and, in the event that the Trustee shall consent to the making of
  payments directly to the Securityholders, to pay to the Trustee its costs and
  expenses of collection and all other amounts due to it pursuant to Section
  6.6.

     Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or

                                       31
<PAGE>

the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Securityholder in any such proceeding, except as aforesaid
in clause (b).

     All rights of action and of asserting claims under this Indenture, or under
any of the Securities of any series or Coupons appertaining to such Securities,
may be enforced by the Trustee without the possession of any of the Securities
of such series or Coupons appertaining to such Securities or the production
thereof in any trial or other proceedings relative thereto, and any such action
or proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be awarded to
the Trustee for ratable distribution to the Holders of the Securities or Coupons
appertaining to such Securities in respect of which such action was taken, after
payment of all sums due to the Trustee under Section 6.6 in respect of such
Securities.

     In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities or Coupons appertaining to such Securities in respect to which
such action was taken, and it shall not be necessary to make any Holders of such
Securities or Coupons appertaining to such Securities parties to any such
proceedings.

     SECTION 5.3 APPLICATION OF PROCEEDS. Any moneys collected by the Trustee
pursuant to this Article in respect of any series shall be applied in the
following order at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal or interest, upon
presentation of the several Securities and Coupons appertaining to such
Securities in respect of which monies have been collected and stamping (or
otherwise noting) thereon the payment, or issuing Securities of such series in
reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid:

     FIRST: To the payment of costs and expenses applicable to such series of
  Securities in respect of which monies have been collected, including all
  amounts due to the Trustee and each predecessor Trustee pursuant to Section
  6.6 in respect to such series of Securities;

     SECOND: If the Securities of such series are Subordinated Securities, to
  the payment of amounts then due and unpaid to the holders of Senior
  Indebtedness with respect to such series, to the extent required pursuant to
  the Subordination Provisions established with respect to the Securities of
  such series pursuant to Section 2.3(9);

     THIRD: In case the principal of the Securities of such series in respect of
  which moneys have been collected shall not have become and be then due and
  payable, to the payment of interest on the Securities of such series in
  default in the

                                       32
<PAGE>

  order of the maturity of the installments on such interest, with interest (to
  the extent that such interest has been collected by the Trustee and is
  permitted by applicable law) upon the overdue installments of interest at the
  same rate as the rate of interest or Yield to Maturity (in the case of
  Original Issue Discount Securities) specified in such Securities, such
  payments to be made ratably to the persons entitled thereto, without
  discrimination or preference;

     FOURTH: In case the principal of the Securities of such series in respect
  of which moneys have been collected shall have become and shall be then due
  and payable, to the payment of the whole amount then owing and unpaid upon all
  the Securities of such series for principal and interest, with interest upon
  the overdue principal, and (to the extent that such interest has been
  collected by the Trustee and is permitted by applicable law) upon the overdue
  installations of interest at the same rate as the rate of interest or Yield to
  Maturity (in the case of Original Issue Discount Securities) specified in the
  Securities of such series; and in case such moneys shall be insufficient to
  pay in full the whole amount so due and unpaid upon the Securities of such
  series, then to the payment of such principal and interest or Yield to
  Maturity, without preference or priority of principal over interest or Yield
  to Maturity, or of interest or Yield to Maturity over principal, or of any
  installment of interest over any other installment of interest or of any
  Security of such series over any other Security of such series, ratably to the
  aggregate of such principal and accrued and unpaid interest or Yield to
  Maturity; and

     FIFTH: To the payment of the remainder, if any, to the Issuer or any other
  person lawfully entitled thereto.

     SECTION 5.4 SUITS FOR ENFORCEMENT. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.

     SECTION 5.5 RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS. In case
the Trustee shall have proceeded to enforce any right under this Indenture and
such proceedings shall have been discontinued or abandoned for any reason, or
shall have been determined adversely to the Trustee, then and in every such case
the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.

                                       33
<PAGE>

     SECTION 5.6 LIMITATIONS ON SUITS BY SECURITY HOLDERS. No Holder of any
Security of any series or of any Coupon appertaining thereto shall have any
right by virtue or by availing of any provision of this Indenture to institute
any action or proceeding at law or in equity or in bankruptcy or otherwise upon
or under or with respect to this Indenture or such Security, or for the
appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder or thereunder, unless (a) such Holder
previously shall have given to the Trustee written notice of an Event of Default
with respect to Securities of such series and of the continuance thereof, as
hereinbefore provided, and (b) the Holders of not less than 25% in aggregate
principal amount of the Securities of such affected series then Outstanding
(treated as a single class) shall have made written request upon the Trustee to
institute such action or proceedings in its own name as Trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and (c) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity shall have failed to institute any such action or proceeding,
and (d) no direction inconsistent with such written request shall have been
given to the Trustee pursuant to Section 5.9; it being understood and intended,
and being expressly covenanted by the taker and Holder of every Security or
Coupon with every other taker and Holder and the Trustee, that no one or more
Holders of Securities of any series or Coupons appertaining to such Securities
shall have any right in any manner whatever by virtue or by availing of any
provision of this Indenture or any Security to affect, disturb or prejudice the
rights of any other such taker or Holder of Securities or Coupons appertaining
to such Securities, or to obtain or seek to obtain priority over or preference
to any other such taker or Holder or to enforce any right under this Indenture
or any Security, except in the manner herein provided and for the equal, ratable
and common benefit of all Holders of Securities of the applicable series and
Coupons appertaining to such Securities. For the protection and enforcement of
the provisions of this Section, each and every Securityholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.

     SECTION 5.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO INSTITUTE CERTAIN
SUITS. Notwithstanding any other provision in this Indenture and any provision
of any Security, the right of any Holder of any Security or Coupon to receive
payment of the principal of and interest on such Security or Coupon on or after
the respective due dates expressed in such Security or Coupon or the applicable
redemption dates provided for in such Security, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.

     SECTION 5.8 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER OF
DEFAULT. Except as provided in Section 5.6, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders of Securities or Coupons 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

                                       34
<PAGE>

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.

     No delay or omission of the Trustee or of any Holder of Securities or
Coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein. Every power and remedy given by this Indenture, any
Security or law to the Trustee or to the Holders of Securities or Coupons may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or, subject to Section 5.6, by the Holders of Securities or Coupons.

     SECTION 5.9 CONTROL BY HOLDERS OF SECURITIES. The Holders of a majority in
aggregate principal amount of the Securities of each series affected (with each
such series voting as a separate class) at the time Outstanding shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series by this Indenture;
provided, that such direction shall not be otherwise than in accordance with law
and the provisions of this Indenture; and provided, further, that (subject to
the provisions of Section 6.1) the Trustee shall have the right to decline to
follow any such direction if (a) the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not lawfully be taken;
or (b) if the Trustee by its board of directors, the executive committee or a
trust committee of directors or Responsible Officers of the Trustee shall
determine in good faith that the action or proceedings so directed would involve
the Trustee in personal liability; or (c) if the Trustee in good faith shall so
determine that the actions or forbearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the
Securities of all affected series not joining in the giving of said direction,
it being understood that (subject to Section 6.1) the Trustee shall have no duty
to ascertain whether or not such actions or forbearances are unduly prejudicial
to such Holders.

     Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.

     SECTION 5.10 WAIVER OF PAST DEFAULTS. Prior to the declaration of
acceleration of the maturity of the Securities of any series as provided in
Section 5.1, the Holders of a majority in aggregate principal amount of the
Securities of such series (voting as a single class) may on behalf of the
Holders of all such Securities waive any past default or Event of Default
described in Section 5.1 and its consequences, except a default in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the Holder of each Security affected. In the case of any such waiver,
the Issuer, the Trustee and the Holders of all such Securities shall be restored
to their former positions and rights hereunder, respectively, and such default
shall cease to exist, and any Event of Default arising therefrom shall be deemed

                                       35
<PAGE>

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 5.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN CERTAIN
CIRCUMSTANCES. The Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities of any series, give notice of all
defaults with respect to that series known to the Trustee (i) if any
Unregistered Securities of that series are then Outstanding, to the Holders
thereof, by publication at least once in an Authorized Newspaper in the Borough
of Manhattan, The City of New York and (ii) to all Holders of Securities of such
series in the manner and to the extent provided in Section 313(c) of the Trust
Indenture Act, unless in each case such defaults shall have been cured before
the mailing or publication of such notice (the term "default" for the purpose of
this Section being hereby defined to mean any event or condition which is, or
with notice or lapse of time or both would become, an Event of Default);
provided, that, except in the case of default in the payment of the principal of
or interest on any of the Securities of such series, or in the payment of any
sinking fund installment on such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors or trustees and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Securityholders of such series.

     SECTION 5.12 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY COSTS.
All parties to this Indenture agree, and each Holder of any Security or Coupon
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder or group of
Securityholders of any series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such series or, in the case of
any suit relating to or arising under clause (d) or (g) of Section 5.1 (if the
suit relates to Securities of more than one but less than all series), 10% in
aggregate principal amount of Securities then Outstanding and affected thereby,
or in the case of any suit relating to or arising under clause (d) or (g) (if
the suit under clause (d) or (g) relates to all the Securities then
Outstanding), or (e) or (f) of Section 5.1, 10% in aggregate principal amount of
all Securities then Outstanding, or to any suit instituted by any Securityholder
for the enforcement of the payment of the principal of or interest on any
Security on or after the due date expressed in such Security or any date fixed
for redemption.

                                       36
<PAGE>

                                   ARTICLE VI

                             CONCERNING THE TRUSTEE

     SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING DEFAULT;
PRIOR TO DEFAULT. Prior to the occurrence of an Event of Default with respect to
the Securities of a particular series and after the curing or waiving of all
Events of Default which may have occurred with respect to such series, the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture with respect to such series of
Securities. In case an Event of Default with respect to the Securities of a
series has occurred and has not been cured or waived, the Trustee shall exercise
with respect to such series of Securities such of the rights and powers vested
in it by this Indenture with respect to such series of Securities, and use the
same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.

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

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

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

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

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

     (c) the Trustee shall not be liable with respect to any action taken or
  omitted to be taken by it in good faith in accordance with the direction of
  the Holders pursuant to Section 5.9 relating to the time, method and place of
  conducting any proceeding for any

                                       37
<PAGE>

  remedy available to the Trustee, or exercising any trust or power conferred
  upon the Trustee, under this Indenture.

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

     The provisions of this Section 6.1 are in furtherance of and subject to
Section 315 of the Trust Indenture Act.

     SECTION 6.2 CERTAIN RIGHTS OF THE TRUSTEE. In furtherance of and subject to
the Trust Indenture Act, and subject to Section 6.1:

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

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

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

     (d) the Trustee shall be under no obligation to exercise any of the trusts
  or powers vested in it by this Indenture at the request, order or direction of
  any of the Securityholders pursuant to the provisions of this Indenture,
  unless such Securityholders shall have offered to the Trustee reasonable
  security or indemnity against the costs, expenses and liabilities which might
  be incurred therein or thereby;

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

                                       38
<PAGE>

     (f) prior to the occurrence of an Event of Default hereunder and after the
  curing or waiving of all Events of Default, the Trustee shall not be bound to
  make any investigation into the facts or matters stated in any resolution,
  certificate, statement, instrument, opinion, report, notice, request, consent,
  order, approval, appraisal, bond, debenture, note, coupon, security, or other
  paper or document unless (i) requested in writing so to do by the Holders of
  not less than a majority in aggregate principal amount of the Securities of
  all series affected then Outstanding (treated as one class) or (ii) otherwise
  provided in the terms of any series of securities pursuant to Section 2.3;
  provided, that, if the payment within a reasonable time to the Trustee of the
  costs, expenses or liabilities likely to be incurred by it in the making of
  such investigation is, in the opinion of the Trustee, not reasonably assured
  to the Trustee by the security afforded to it by the terms of this Indenture,
  the Trustee may require reasonable indemnity against such expenses or
  liabilities as a condition to proceeding; the reasonable expenses of every
  such investigation shall be paid by the Issuer or, if paid by the Trustee or
  any predecessor trustee, shall be repaid by the Issuer upon demand;

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

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

     SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF SECURITIES
OR APPLICATION OF PROCEEDS THEREOF. The recitals contained herein and in the
Securities, except the Trustee's certificates of authentication, shall be taken
as the statements of the Issuer, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or of the Securities or Coupons. The
Trustee shall not be accountable for the use or application by the Issuer of any
of the Securities or of the proceeds thereof.

     SECTION 6.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES OR COUPONS; COLLECTIONS,
ETC. The Trustee or any agent of the Issuer or of the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities or Coupons
with the same rights it would have if it were not the Trustee or such agent and
may otherwise deal with the Issuer and receive, collect, hold and retain
collections from the Issuer with the same rights it would have if it were not
the Trustee or such agent.

     SECTION 6.5 MONEYS HELD BY TRUSTEE. Subject to the provisions of Section
10.4 hereof, all moneys received by the Trustee shall, until used or applied as
herein

                                       39
<PAGE>

provided, be held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent required by
mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or
the Trustee shall be under any liability for interest on any moneys received by
it hereunder.

     SECTION 6.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR
CLAIM. The Issuer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee and each predecessor trustee
for, and to defend and hold it 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 this Indenture or the trusts
hereunder and its duties hereunder, including the costs and expenses of
defending itself against or investigating any claim of liability in the
premises. The obligations of the Issuer under this Section to compensate and
indemnify the Trustee and each predecessor trustee and to pay or reimburse the
Trustee and each predecessor trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture and the resignation or removal of
the Trustee. Such additional indebtedness shall be a senior claim to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the Holders of particular
Securities or Coupons, and the Securities are hereby subordinated to such senior
claim.

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

     SECTION 6.8 QUALIFICATION OF TRUSTEE: CONFLICTING INTERESTS. The Trustee
shall comply with Section 310(b) of the Trust Indenture Act.

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<PAGE>

     SECTION 6.9 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE. The Trustee for
each series of Securities hereunder shall at all times be a corporation or
banking association organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, having a
combined capital and surplus of at least $50,000,000, and which is authorized
under such laws to exercise corporate trust powers and is subject to supervision
or examination by Federal, state or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 6.10.

     The provisions of this Section 6.9 are in furtherance of and subject to
Section 310(a) of the Trust Indenture Act.

     SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE. (a)
The Trustee, or any trustee or trustees hereafter appointed, may at any time
resign with respect to one or more or all series of Securities by giving written
notice of resignation to the Issuer and (i) if any Unregistered Securities of a
series affected are then Outstanding, by giving notice of such resignation to
the Holders thereof, by publication at least once in an Authorized Newspaper in
the Borough of Manhattan, The City of New York, (ii) if any Unregistered
Securities of a series affected are then Outstanding, by mailing notice of such
resignation to the Holders thereof who have filed their names and addresses with
the Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act at such
addresses as were so furnished to the Trustee and (iii) by mailing notice of
such resignation to the Holders of then Outstanding Registered Securities of
each series affected at their addresses as they shall appear on the registry
books. Upon receiving such notice of resignation, the Issuer shall promptly
appoint a successor trustee or trustees with respect to the applicable series by
written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Securityholder
who has been a bona fide Holder of a Security or Securities of the applicable
series for at least six months may, subject to the provisions of Section 5.12,
on behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.

                                       41
<PAGE>

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

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

          (ii) the Trustee shall cease to be eligible in accordance with the
     provisions of Section 6.9 and Section 310(a) of the Trust Indenture Act and
     shall fail to resign after written request therefor by the Issuer or by any
     Securityholder who has been a bona fide Holder of a Security or Securities
     of such series for at least six months; or

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

then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of Directors
of the Issuer, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 315(e) of the Trust Indenture Act, any Securityholder who has been a
bona fide Holder of a Security or Securities of such series for at least six
months may on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may
thereupon, after such notice, if any, as it may deem proper and so prescribe,
remove the Trustee and appoint a successor trustee.

     (c) The Holders of a majority in aggregate principal amount of the
  Securities of each series at the time outstanding may at any time remove the
  Trustee with respect to Securities of such series and appoint a successor
  trustee with respect to the Securities of such series by delivering to the
  Trustee so removed, to the successor trustee so appointed and to the Issuer
  the evidence provided for in Section 7.1 of the action in that regard taken by
  the Securityholders.

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

     SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any successor
trustee appointed as provided in Section 6.10 shall execute and deliver to the
Issuer and to its predecessor trustee an instrument accepting such appointment

                                       42
<PAGE>

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

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

     No successor trustee with respect to any series of Securities shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under Section 310(b) of the
Trust Indenture Act and eligible under the provisions of Section 6.9.

     Upon acceptance of appointment by any successor trustee as provided in this
Section 6.11, the Issuer shall give notice thereof (a) if any Unregistered
Securities of a series affected are then Outstanding, to the Holders thereof, by
publication of such notice at least once in an Authorized Newspaper in the
Borough of Manhattan, The City of New York, (b) if any Unregistered Securities
of a series affected are then Outstanding, to the Holders thereof who have filed
their names and addresses with the Trustee pursuant to Section 313(c)(2) of the
Trust Indenture Act, by mailing such notice to such Holders at such addresses as
were so furnished to the Trustee (and the Trustee shall make such information
available to the Issuer for such purpose) and (c) to the Holders of Registered
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the acceptance of
appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If the Issuer

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<PAGE>

fails to give such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be given at
the expense of the Issuer.

     SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS OF
TRUSTEE. Any corporation or banking association into which the Trustee may be
merged or converted or with which it may be consolidated, or any corporation or
banking association resulting from any merger, conversion or consolidation to
which the Trustee shall be a party, or any corporation or banking association
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided, that such corporation or banking
association shall be qualified under Section 310(b) of the Trust Indenture Act
and eligible under the provisions of Section 6.9, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

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

     SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUER. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated.

     SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT. As long as any Securities
of a series remain Outstanding, the Trustee may, by an instrument in writing,
appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's Certificate of Authentication, such reference
shall be deemed to include authentication and delivery on behalf

                                       44
<PAGE>

of the Trustee by an Authenticating Agent for such series and a Certificate of
Authentication executed on behalf of the Trustee by such Authenticating Agent.
Such Authenticating Agent shall at all times be a corporation organized and
doing business under the laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $45,000,000 (determined as provided in Section
6.9 with respect to the Trustee) and subject to supervision or examination by
Federal or state authority.

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

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

     Sections 6.2, 6.3, 6.4, 6.6 and 7.3 shall be applicable to any
Authenticating Agent.

                                   ARTICLE VII

                         CONCERNING THE SECURITYHOLDERS

     SECTION 7.1 EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS. Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by a specified percentage in
principal amount of the Securityholders of any or all series may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such specified percentage of Securityholders in person or by agent duly
appointed in writing; and, except as herein otherwise

                                       45
<PAGE>

expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument
or of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of the
Trustee and the Issuer, if made in the manner provided in this Article.

     SECTION 7.2 PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF SECURITIES.
Subject to Sections 6.1 and 6.2, the execution of any instrument by a
Securityholder or his agent or proxy may be proved in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee. The holding of Registered
Securities shall be proved by the Security register or by a certificate of the
registrar thereof.

     SECTION 7.3 HOLDERS TO BE TREATED AS OWNERS. The Issuer, the Trustee and
any agent of the Issuer or the Trustee may deem and treat the person in whose
name any Security shall be registered upon the Security register for such series
as the absolute owner of such Security (whether or not such Security shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the principal of and,
subject to the provisions of this Indenture, interest on such Security and for
all other purposes; and neither the Issuer nor the Trustee nor any agent of the
Issuer or the Trustee shall be affected by any notice to the contrary. The
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Holder of any Unregistered Security and the Holder of any Coupon as the absolute
owner of such Unregistered Security or Coupon (whether or not such Unregistered
Security or Coupon shall be overdue) for the purpose of receiving payment
thereof or on account thereof and for all other purposes, and neither the
Issuer, the Trustee, nor any agent of the Issuer or the Trustee shall be
affected by any notice to the contrary. All such payments so made to any such
person, or upon his order, shall be valid, and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Unregistered Security or Coupon.

     SECTION 7.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any request,
demand, authorization, direction, notice, consent, waiver or other action by
Securityholders under this Indenture, Securities which are owned by the Issuer
or any other obligor on the Securities with respect to which such determination
is being made or by any person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Issuer or any other
obligor on the Securities with respect to which such determination is being made
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such action only Securities which
the Trustee knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the Issuer or
any other obligor upon the Securities or any

                                       46
<PAGE>

person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Issuer or any other obligor on the Securities.
In case of a dispute as to such right, the advice of counsel shall be full
protection in respect of any decision made by the Trustee in accordance with
such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officer's Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described persons; and, subject to Sections 6.1 and
6.2, the Trustee shall be entitled to accept such Officer's Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.

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

                                  ARTICLE VIII

                             SUPPLEMENTAL INDENTURES

     SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS. The
Issuer, when authorized by a resolution of its Board of Directors (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in accordance
with or pursuant to an Issuer Order), and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental hereto for one or
more of the following purposes:

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

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

                                       47
<PAGE>

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

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

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

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

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

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

                                       48
<PAGE>

     SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.

     (a) Except as set forth in paragraph (C) below, with the consent (evidenced
as provided in Article VII) of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time Outstanding of all
series of Senior Securities affected by such supplemental indenture (voting as
one class), the Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may, from
time to time and at any time, enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in
force and effect at the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities of each such series or of the
Coupons appertaining to such Securities.

     (b) Except as set forth in paragraph (C) below, with the consent (evidenced
as provided in Article VII) of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time Outstanding of all
series of Subordinated Securities affected by such supplemental indenture
(voting as one class), the Issuer, when authorized by a resolution of its Board
of Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may, from
time to time and at any time, enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in
force and effect at the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities of each such series or of the
Coupons appertaining to such Securities.

     (c) No such supplemental indenture shall (i) extend the final maturity of
any Security, or reduce the principal amount thereof, or premium thereon, if
any, or reduce the rate or extend the time of payment of interest thereon, or
reduce any amount payable on redemption thereof, or make the principal thereof
(including any amount in respect of original issue discount), or premium
thereon, if any, or interest thereon payable in any coin or currency other than
that provided in the Securities and Coupons or in accordance with the terms
thereof, or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon an acceleration of the maturity
thereof pursuant to Section 5.1 or the amount thereof provable in bankruptcy
pursuant to Section 5.2, or in the case of Subordinated Securities of any
series, modify any of the Subordination Provisions or the definition of "Senior
Indebtedness" relating to such series in a manner adverse to the holders of such
Subordinated Securities, or alter the provisions of Section 11.11 or 11.12 or
impair or affect the right of any Securityholder to institute suit for the
payment thereof when due or, if the Securities provide therefor, any right of
repayment at the

                                       49
<PAGE>

option of the Securityholder, in each case without the consent of the Holder of
each Security so affected, or (ii) reduce the aforesaid percentage of Securities
of any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security so
affected.

     (d) 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 Holders of Securities of such series, or of Coupons appertaining
to such Securities, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities of
any other series or of the Coupons appertaining to such Securities.

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

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

     Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give notice thereof (i) to the Holders of then Outstanding Registered
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on the
Security register, (ii) if any Unregistered Securities of a series affected
thereby are then Outstanding, to the Holders thereof who have filed their names
and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust
Indenture Act, by mailing a notice thereof by first-class mail to such Holders
at such addresses as were so furnished to the Trustee and (iii) if any
Unregistered Securities of a series affected thereby are then Outstanding, to
all Holders thereof, by publication of a notice thereof at least once in an
Authorized Newspaper in the Borough of Manhattan, The City of New York, and such
notice shall set forth in general terms the substance of such supplemental
indenture. Any failure of the Issuer to give such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.

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<PAGE>

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

     SECTION 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. The Trustee, subject to the
provisions of Sections 6.1 and 6.2, may receive an Officer's Certificate and an
Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 8 complies with the applicable provisions of
this Indenture.

     SECTION 8.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL INDENTURES.
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a
notation in form approved by the Trustee for such series as to any matter
provided for by such supplemental indenture or as to any action taken by
Securityholders. If the Issuer or the Trustee shall so determine, new Securities
of any series so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Issuer, authenticated by the
Trustee and delivered in exchange for the Securities of such series then
Outstanding.

                                   ARTICLE IX

                    CONSOLIDATION, MERGER, SALE OR CONVEYANCE

     SECTION 9.1 ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The Issuer
shall not consolidate with or merge into any other Person or transfer or lease
its properties and assets substantially as an entirety to any Person, and the
Issuer shall not permit any other Person to consolidate with or merge into the
Issuer, unless:

     (a) either the Issuer shall be the continuing corporation, or the successor
  corporation (if other than the Issuer) formed by such consolidation or into
  which the Issuer is merged or to which the properties and assets of the Issuer
  substantially as an entirety are transferred or leased shall be a corporation
  organized and existing under the laws of the United States of America, any
  State thereof or the District of Columbia and shall expressly assume, by an
  indenture supplemental hereto, executed and delivered to the Trustee, in form
  satisfactory to the Trustee, all the obligations of the Issuer under the
  Securities and this Indenture; and

                                       51
<PAGE>

     (b) immediately after giving effect to such transaction and treating any
  indebtedness which becomes an obligation of the Issuer or a Subsidiary as a
  result of such transaction as having been incurred by the Issuer or such
  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.

     SECTION 9.2 SUCCESSOR CORPORATION SUBSTITUTED. The successor corporation
formed by such consolidation or into which the Issuer is merged or to which such
transfer or lease is made shall succeed to and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such successor corporation had been named as the Issuer herein, and
thereafter (except in the case of a lease to another Person) the predecessor
corporation shall be relieved of all obligations and covenants under the
Indenture and the Securities and, in the event of such conveyance or transfer,
any such predecessor corporation may be dissolved and liquidated.

     SECTION 9.3 OPINION OF COUNSEL TO BE GIVEN TO TRUSTEE. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale or conveyance, and
any such assumption, complies with the provisions of this Article IX.

                                    ARTICLE X

                    SATISFACTION AND DISCHARGE OF INDENTURE;
                                UNCLAIMED MONEYS

     SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE.

     (A) If at any time (i) the Issuer shall have paid or caused to be paid the
principal of and interest on all the Securities of any series Outstanding
hereunder and all unmatured Coupons appertaining thereto (other than Securities
of such series and Coupons appertaining thereto which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 2.9) as
and when the same shall have become due and payable, or (ii) the Issuer shall
have delivered to the Trustee for cancellation all Securities of any series
theretofore authenticated and all unmatured Coupons appertaining thereto (other
than any Securities of such series and Coupons appertaining thereto which shall
have been destroyed, lost or stolen and which shall have been replaced or paid
as provided in Section 2.9) or (iii) in the case of any series of Securities
where the exact amount (including the currency of payment) of principal of and
interest due on which can be determined at the time of making the deposit
referred to in clause (b) below, (a) all the Securities of such series and all
unmatured Coupons appertaining thereto not theretofore delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and (b) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee as trust funds

                                       52
<PAGE>

in trust the entire amount in (i) cash (other than moneys repaid by the Trustee
or any paying agent to the Issuer in accordance with Section 10.4), (ii) in the
case of any series of Securities the payments on which may only be made in
Dollars, direct obligations of the United States of America, backed by its full
faith and credit ("U.S. Government Obligations"), maturing as to principal and
interest at such times and in such amounts as will insure the availability of
cash sufficient to pay at such maturity or upon such redemption, as the case may
be, or (iii) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (a) the principal and
interest on all Securities of such series and Coupons appertaining thereto on
each date that such principal or interest is due and payable and (b) any
mandatory sinking fund payments on the dates on which such payments are due and
payable in accordance with the terms of the Indenture and the Securities of such
series; (x) the principal and interest on all Securities of such series and
Coupons appertaining thereto on each date that such principal or interest is due
and payable and (y) any mandatory sinking fund payments on the dates on which
such payments are due and payable in accordance with the terms of the Indenture
and the Securities of such series; and if, in any such case, the Issuer shall
also pay or cause to be paid all other sums payable hereunder by the Issuer,
then this Indenture shall cease to be of further effect (except as to (i) rights
of registration of transfer and exchange of Securities of such Series and of
Coupons appertaining thereto pursuant to Section 2.8 and the Issuer's right of
optional redemption, if any, (ii) substitution of mutilated, defaced, destroyed,
lost or stolen Securities or Coupons, (iii) rights of holders of Securities and
Coupons appertaining thereto to receive payments of principal thereof and
interest thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) any optional redemption rights of such series of
Securities to the extent to be exercised to make such call for redemption within
one year, (v) the rights, obligations, duties and immunities of the Trustee
hereunder, including those under Section 6.6, (vi) the rights of the Holders of
Securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to all
or any of them, and (vii) the obligations of the Issuer under Section 3.2) and
the Trustee, on demand of the Issuer accompanied by an Officer's Certificate and
an Opinion of Counsel and at the cost and expense of the Issuer, shall execute
proper instruments acknowledging such satisfaction of and discharging this
Indenture; provided, that the rights of Holders of the Securities and Coupons to
receive amounts in respect of principal of and interest on the Securities and
Coupons held by them shall not be delayed longer than required by
then-applicable mandatory rules or policies of any securities exchange upon
which the Securities are listed. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Securities of
such series.

     (B) The following provisions shall apply to the Securities of each series
unless specifically otherwise provided in a Board Resolution, Officer's
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities the exact amounts

                                       53
<PAGE>

(including the currency of payment) of principal of and interest due on which
can be determined at the time of making the deposit referred to in clause (a)
below, the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such a series and the Coupons appertaining
thereto on the date of the deposit referred to in subparagraph (a) below, and
the provisions of this Indenture with respect to the Securities of such series
and Coupons appertaining thereto shall no longer be in effect (except as to (i)
rights of registration of transfer and exchange of Securities of such series and
of Coupons appertaining thereto pursuant to Section 2.8 and the Issuer's right
of optional redemption, if any, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities or Coupons, (iii) rights of Holders of
Securities and Coupons appertaining thereto to receive payments of principal
thereof and interest thereon, upon the original stated due dates therefor (but
not upon acceleration), and remaining rights of the Holders to receive mandatory
sinking fund payments, if any, (iv) any optional redemption rights of such
series of Securities to the extent to be exercised to make such call for
redemption within one year, (v) the rights, obligations, duties and immunities
of the Trustee hereunder, (vi) the rights of the Holders of Securities of such
series and Coupons appertaining thereto as beneficiaries hereof with respect to
the property so deposited with the Trustee payable to all or any of them and
(vii) the obligations of the Issuer under Section 3.2) and the Trustee, at the
expense of the Issuer, shall at the Issuer's request, execute proper instruments
acknowledging the same, if:

     (a) with reference to this provision the Issuer has irrevocably deposited
  or caused to be irrevocably deposited with the Trustee as trust funds in
  trust, specifically pledged as security for, and dedicated solely to, the
  benefit of the Holders of the Securities of such series and Coupons
  appertaining thereto (i) cash in an amount, or (ii) in the case of any series
  of Securities the payments on which may only be made in Dollars, U.S.
  Government Obligations, maturing as to principal and interest at such times
  and in such amounts as will insure the availability of cash or (iii) a
  combination thereof, sufficient, in the opinion of a nationally recognized
  firm of independent public accountants expressed in a written certification
  thereof delivered to the Trustee, to pay (A) the principal and interest on all
  Securities of such series and Coupons appertaining thereto on each date that
  such principal or interest is due and payable and (b) any mandatory sinking
  fund payments on the dates on which such payments are due and payable in
  accordance with the terms of the Indenture and the Securities of such series;

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

     (c) the Issuer has delivered to the Trustee an Opinion of Counsel based on
  the fact that (x) the Issuer has received from, or there has been published
  by, the IRS a ruling or (y) since the date hereof, there has been a change in
  the applicable United States Federal income tax law, in either case to the
  effect that, and such opinion shall confirm that, the Holders of the
  Securities of such series and Coupons appertaining thereto will not recognize
  income, gain or loss for United States Federal income tax purposes as a result

                                       54
<PAGE>

  of such deposit, defeasance and discharge and will be subject to United States
  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; and

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

     (C) The Issuer shall be released from its obligations under Sections 3.6
and 9.1 and unless otherwise provided for in the Board Resolution, Officer's
Certificate or Indenture supplemental hereto establishing such series of
Securities, from all covenants and other obligations referred to in Section
2.3(19) or 2.3(21) with respect to such series of Securities, and any Coupons
appertaining thereto, outstanding on and after the date the conditions set forth
below are satisfied (hereinafter, "covenant defeasance"). For this purpose, such
covenant defeasance means that, with respect to the Outstanding Securities of
any series, the Issuer may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in such Section, whether
directly or indirectly by reason of any reference elsewhere herein to such
Section or by reason of any reference in such Section to any other provision
herein or in any other document and such omission to comply shall not constitute
an Event of Default under Section 5.1, but the remainder of this Indenture and
such Securities and Coupons shall be unaffected thereby. The following shall be
the conditions to application of this subsection C of this Section 10.1:

     (a) The Issuer has irrevocably deposited or caused to be deposited with the
  Trustee as trust funds in trust for the purpose of making the following
  payments, specifically pledged as security for, and dedicated solely to, the
  benefit of the holders of the Securities of such series and coupons
  appertaining thereto, (i) cash in an amount, or (ii) in the case of any series
  of Securities the payments on which may only be made in Dollars, U.S.
  Government Obligations maturing as to principal and interest at such times and
  in such amounts as will insure the availability of cash or (iii) a combination
  thereof, sufficient, in the opinion of a nationally recognized firm of
  independent public accountants expressed in a written certification thereof
  delivered to the Trustee, to pay (A) the principal and interest on all
  Securities of such series and Coupons appertaining thereof and (B) any
  mandatory sinking fund payments on the day on which such payments are due and
  payable in accordance with the terms of the Indenture and the Securities of
  such series;

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

     (c) Such covenant defeasance shall not cause the Trustee to have a
  conflicting interest as defined in Section 6.8 and for purposes of the Trust
  Indenture Act with respect to any securities of the Issuer;

                                       55
<PAGE>

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

     (e) Such covenant defeasance shall not cause any Securities then listed on
  any registered national securities exchange under the Exchange Act to be
  delisted;

     (f) The Issuer shall have delivered to the Trustee an Officer's Certificate
  and Opinion of Counsel to the effect that the Holders of the Securities of
  such series and Coupons appertaining thereto will not recognize income, gain
  or loss for United States Federal income tax purposes as a result of such
  covenant defeasance and will be subject to United States Federal income tax on
  the same amounts, in the same manner and at the same times as would have been
  the case if such covenant defeasance had not occurred; and

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

     SECTION 10.2 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
SECURITIES. Subject to Section 10.4, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 10.1 shall be held in trust and applied by it
to the payment, either directly or through any paying agent (including the
Issuer acting as its own paying agent), to the Holders of the particular
Securities of such series and of Coupons appertaining thereto for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law.

     SECTION 10.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection with
the satisfaction and discharge of this Indenture with respect to Securities of
any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.

     SECTION 10.4 RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT UNCLAIMED
FOR TWO YEARS. Any moneys deposited with or paid to the Trustee or any paying
agent for the payment of the principal of or interest on any Security of any
series and of any Coupons attached thereto and not applied but remaining
unclaimed for two years after the date upon which such principal or interest
shall have become due and payable, shall, upon the written request of the Issuer
and unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for
such series or such paying agent, and the Holder of the Securities of such
series and of any Coupons appertaining thereto shall, unless otherwise required
by mandatory provisions

                                       56
<PAGE>

of applicable escheat or abandoned or unclaimed property laws, thereafter look
only to the Issuer for any payment which such Holder may be entitled to collect,
and all liability of the Trustee or any paying agent with respect to such moneys
shall thereupon cease; provided, that the Trustee or such paying agent, before
being required to make any such repayment with respect to moneys deposited with
it for any payment (a) in respect of Registered Securities of any series, shall
at the expense of the Issuer, mail by first-class mail to Holders of such
Securities at their addresses as they shall appear on the Security register, and
(b) in respect of Unregistered Securities of any series, shall at the expense of
the Issuer cause to the published once, in an Authorized Newspaper in the
Borough of Manhattan, The City of New York, notice, that such moneys remain and
that, after a date specified therein, which shall not be less than thirty days
from the date of such mailing or publication, any unclaimed balance of such
money then remaining will be repaid to the Issuer.

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

     SECTION 10.6 EFFECT ON SUBORDINATION PROVISIONS. Unless otherwise expressly
established pursuant to Section 2.3 with respect to the Subordinated Securities
of any series, the provisions of Section 11.13 hereof, insofar as they pertain
to the Subordinated Securities of such series, and the Subordination Provisions
established pursuant to Section 2.3(9) with respect to such series, are hereby
expressly made subject to the provisions for satisfaction and discharge and
defeasance and covenant defeasance set forth in Section 10.1 hereof and,
anything herein to the contrary notwithstanding, upon the effectiveness of such
satisfaction and discharge and defeasance and covenant defeasance pursuant to
Section 10.1 with respect to the Securities of such series, such Securities
shall thereupon cease to be so subordinated and shall no longer be subject to
the provisions of Section 11.13 or the Subordination Provisions established
pursuant to Section 2.3(9) with respect to such series and, without limitation
to the foregoing, all moneys, U.S. Government Obligations and other securities
or property deposited with the Trustee (or other qualifying trustee) in trust in
connection with such satisfaction and discharge, defeasance or covenant
defeasance, as the case may be, and all proceeds therefrom may be applied to pay
the principal of, premium, if any, and interest, if any, on, and mandatory
sinking fund payments, if any, with respect to the Securities of such series as
and when the same shall become due and payable notwithstanding the provisions of
Section 11.13 or such Subordination Provisions.

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

     SECTION 11.1 INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF ISSUER
EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any obligation,
covenant or agreement contained in this Indenture, or in any Security, or

                                       57
<PAGE>

because of any indebtedness evidenced thereby, shall be had against any
incorporator, as such, or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities and the Coupons, if any,
appertaining thereto by the Holders thereof and as part of the consideration for
the issue of the Securities and the Coupons appertaining thereto.

     SECTION 11.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF PARTIES AND
HOLDERS OF SECURITIES AND COUPONS. Nothing in this Indenture, in the Securities
or in the Coupons appertaining thereto, expressed or implied, shall give or be
construed to give to any person, firm or corporation, other than the parties
hereto and their successors and the Holders of the Securities or Coupons, if any
and, in the case of the Subordinated Securities of any series, the holders of
Senior Indebtedness with respect to such series, any legal or equitable right,
remedy or claim under this Indenture or under any covenant or provision herein
contained, all such covenants and provisions being for the sole benefit of the
parties hereto and their successors and of the Holders of the Securities or
Coupons, if any and, in the case of the Subordinated Securities of any series,
the holders of Senior Indebtedness with respect to such series.

     SECTION 11.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE. All the
covenants, stipulations, promises and agreements in this Indenture contained by
or in behalf of the Issuer shall bind its successors and assigns, whether so
expressed or not.

     SECTION 11.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND HOLDERS OF
SECURITIES AND COUPONS. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities or Coupons, if any, to or on the Issuer may be given
or served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of the
Issuer is filed by the Issuer with the Trustee) to Stillwater Mining Company,
536 East Pike Avenue, Columbus, Montana 59019, Attention: Secretary. Any notice,
direction, request or demand by the Issuer or any Holder of Securities or
Coupons, if any, to or upon the Trustee shall be deemed to have been
sufficiently given or served by being deposited postage prepaid, first-class
mail (except as otherwise specifically provided herein) addressed (until another
address of the Trustee is filed by the Trustee with the Issuer) to [        ].

     Where this Indenture provides for notice to Holders of Registered
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class mail, postage prepaid,
to each Holder entitled thereto, at his last address as it appears in the
Security register. In any case where notice to such Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular

                                       58
<PAGE>

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

     Where this Indenture provides for notice to holders of Unregistered
Securities, such notice shall be sufficiently given (unless otherwise expressly
provided herein) by giving notice to such Holders (a) by publication of such
notice at least once in an Authorized Newspaper in the Borough of Manhattan, The
City of New York and (b) by mailing such notice to the Holders of Unregistered
Securities who have filed their names and addresses with the Trustee pursuant to
Section 313(c)(2) of the Trust Indenture Act at such addresses as were so
furnished to the Trustee.

     In case, by reason of the suspension of or irregularities in regular mail
service, it shall be impracticable to mail notice to the Issuer when such notice
is required to the given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be reasonably satisfactory to the Trustee
shall be deemed to be a sufficient giving of such notice.

     SECTION 11.5 OFFICER'S CERTIFICATES AND OPINIONS OF COUNSEL; STATEMENTS TO
BE CONTAINED THEREIN. Upon any application or demand by the Issuer to the
Trustee to take any action under any of the provisions of this Indenture, the
Issuer shall furnish to the Trustee an Officer's Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.

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

     Any certificate, statement or opinion of an officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel,

                                       59
<PAGE>

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

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

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

     SECTION 11.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If the date
of maturity of interest on or principal of the Securities of any series or any
Coupons appertaining thereto or the date fixed for redemption or repayment of
any such Security or Coupon shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.

     SECTION 11.7 CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST INDENTURE
ACT. If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with duties imposed by, or with another provision (an "incorporated
provision") included in this Indenture by operation of Sections 310 to 318,
inclusive, of the Trust Indenture Act, such imposed duties or incorporated
provision shall control.

     SECTION 11.8 THIS INDENTURE AND EACH SECURITY AND COUPON SHALL BE DEEMED TO
BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE
INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

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<PAGE>

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

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

     SECTION 11.11 SECURITIES IN A FOREIGN CURRENCY. Unless otherwise specified
in an Officer's Certificate delivered pursuant to Section 2.3 of this Indenture
with respect to a particular series of Securities, whenever for purposes of this
Indenture any action may be taken by the Holders of a specified percentage in
aggregate principal amount of Securities of all series or all series affected by
a particular action at the time Outstanding and, at such time, there are
Outstanding Securities of any series which are denominated in a Foreign
Currency, then the principal amount of Securities of such series which shall be
deemed to be Outstanding for the purpose of taking such action shall be that
amount of Dollars that could be obtained for such amount at the Market Exchange
Rate. For purposes of this Section 11.11, Market Exchange Rate shall mean the
noon Dollar buying rate in The City of New York for cable transfers of such
currency or currencies as published by the Federal Reserve Bank of New York as
of the most recent available date. If such Market Exchange Rate is not available
for any reason with respect to such currency, the Trustee shall use, in its sole
discretion and without liability on its part, such quotation of the Federal
Reserve Bank of New York or quotations from one or more major banks in The City
of New York or in the country of issue of the currency in question, which for
purposes of the euro shall be any member state of the European Union that has
adopted the euro, as the Trustee shall deem appropriate. The provisions of this
paragraph shall apply in determining the equivalent principal amount in respect
of Securities of a series denominated in a currency other than Dollars in
connection with any action taken by Holders of Securities pursuant to the terms
of this Indenture.

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

     SECTION 11.12 JUDGMENT CURRENCY. The Issuer agrees, to the fullest extent
that it may effectively do so under applicable law, that (a) if for the purpose
of obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of or interest on the Securities of any series (the
"Required Currency") into a currency in which a judgment will be rendered (the
"Judgment Currency"), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York the Required Currency with the Judgment Currency on the day on which
final unappealable judgment is entered, unless such day is not a New York
Banking Day, then, to the extent permitted by applicable law, the rate of
exchange used shall be the rate at which in

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<PAGE>

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

     SECTION 11.13 AGREEMENT TO SUBORDINATE. The Issuer, for itself, its
successors and assigns, covenants and agrees, and each Holder of Subordinated
Securities of any series by his acceptance thereof, likewise covenants and
agrees, that the payment of the principal of (and premium, if any) and interest,
if any, on, and mandatory sinking fund payments, if any, in respect of each and
all of the Subordinated Securities of such series shall be expressly
subordinated, to the extent and in the manner provided in the Subordination
Provisions established with respect to the Subordinated Securities of such
series pursuant to Section 2.3(9) hereof, in right of payment to the prior
payment in full of all Senior Indebtedness with respect to such series.

                                   ARTICLE XII

                   REDEMPTION OF SECURITIES AND SINKING FUNDS

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

     SECTION 12.2 NOTICE OF REDEMPTION; PARTIAL REDEMPTIONS. Notice of
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to such Holders
of Securities of such series at their last addresses as they shall appear upon
the registry books. Notice of redemption to the Holders of Unregistered
Securities to be redeemed as a whole or in part, who have filed their names and
addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture
Act shall be given by mailing notice of such redemption, by first class mail,
postage prepaid, at least 30 days and not more than

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60 prior to the date fixed for redemption, to such Holders at such addresses as
were so furnished to the Trustee (and, in the case of any such notice given by
the Issuer, the Trustee shall make such information available to the Issuer for
such purpose). Notice of redemption to all other Holders of Unregistered
Securities shall be published in an Authorized Newspaper in the Borough of
Manhattan, The City of New York once in each of three successive calendar weeks,
the first publication to be not less than 30 nor more than 60 days prior to the
date fixed for redemption. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the Holder receives the notice. Failure to give notice by mail, or any defect in
the notice to the Holder of any Security of a series designated for redemption
as a whole or in part shall not affect the validity of the proceedings for the
redemption of such Security of such series.

     The notice of redemption to each such Holder shall specify the principal
amount of each Security of such series held by such Holder to be redeemed, the
date fixed for redemption, the redemption price, the place or places of payment,
that payment will be made upon presentation and surrender of such Securities
and, in the case of Securities with Coupons attached thereto, of all Coupons
appertaining thereto maturing after the date fixed for redemption, that such
redemption is pursuant to the mandatory or optional sinking fund, or both, if
such be the case, that interest accrued to the date fixed for redemption will be
paid as specified in such notice and that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue. In case
any Security of a series is to be redeemed in part only, the notice of
redemption to Holders of Securities of the series shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities of such series in principal amount equal to the unredeemed portion
thereof will be issued.

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

     On or before the redemption date specified in the notice of redemption
given as provided in this Section, the Issuer will deposit with the Trustee or
with one or more paying agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 3.4) an
amount of money sufficient to redeem on the redemption date all the Securities
of such series so called for redemption at the appropriate redemption price,
together with accrued interest to the date fixed for redemption. The Issuer will
deliver to the Trustee at least 70 days prior to the date fixed for redemption,
or such shorter period as shall be acceptable to the Trustee, an Officer's
Certificate stating the aggregate principal amount of Securities to be redeemed.
In case of a redemption at the election of the Issuer prior to the expiration of
any restriction on such redemption, the Issuer shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this
Section, an Officer's Certificate stating that such restriction has been
complied with.

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<PAGE>

     If less than all the Securities of a series are to be redeemed, the Trustee
shall select, in such manner as it shall deemed appropriate and fair, in its
sole discretion, Securities of such series to be redeemed in whole or in part.
Securities may be redeemed in part in multiples equal to the minimum authorized
denomination for Securities of such series or any multiple thereof. The Trustee
shall promptly notify the Issuer in writing of the Securities of such series
selected for redemption and, in the case of any Securities of such series
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities of any series shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.

     SECTION 12.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If notice of
redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Issuer shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured Coupons, if any, appertaining thereto shall be void,
and, except as provided in Sections 6.5 and 10.4, such Securities shall cease
from and after the date fixed for redemption to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
together with all Coupons, if any, appertaining thereto maturing after the date
fixed for redemption, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption; provided, that
payment of interest becoming due on or prior to the date fixed for redemption
shall be payable in the case of Securities with Coupons attached thereto, to the
Holders of the Coupons for such interest upon surrender thereof, and in the case
of Registered Securities, to the Holder of such Registered Securities registered
as such on the relevant record date, subject to the terms and provisions of
Section 2.3 and 2.7 hereof.

     If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid or duly provided for,
bear interest from the date fixed for redemption at the rate of interest or
Yield to Maturity (in the case of an Original Issue Discount Security) borne by
such Security.

     If any Security with Coupons attached thereto is surrendered for redemption
and is not accompanied by all appurtenant Coupons maturing after the date fixed
for redemption, the surrender of such missing Coupon or Coupons may be waived by
the Issuer and the Trustee, if there be furnished to each of them such security
or indemnity as they may require to save each of them harmless.

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<PAGE>

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

     SECTION 12.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR SELECTION
FOR REDEMPTION. Securities shall be excluded from eligibility for selection for
redemption if they are identified by registration and certificate number in an
Officer's Certificate delivered to the Trustee at least 40 days prior to the
last date on which notice of redemption may be given as being owned of record
and beneficially by, and not pledged or hypothecated by, either (a) the Issuer
or (b) an entity specifically identified in such written statement as directly
or indirectly controlling or controlled by or under direct or indirect common
control with the Issuer.

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

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

     On or before the 60th day next preceding each sinking fund payment date for
any series, the Issuer will deliver to the Trustee an Officer's Certificate
(which need not contain the statements required by Section 11.5) (a) specifying
the portion of the mandatory sinking fund payment to be satisfied by payment of
cash and the portion to be satisfied by credit of Securities of such series and
the basis for such credit, (b) stating that none of the Securities of such
series has theretofore been so credited, (c) stating that no defaults in the
payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured) and are continuing and (d)
stating whether or not the Issuer intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if so, specifying
the amount of such optional sinking fund payment which the Issuer intends to pay
on or before the next succeeding

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<PAGE>

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

     If the sinking fund payment or payments (mandatory or optional or both) to
be made in cash on the next succeeding sinking fund payment date plus any unused
balance of any preceding sinking fund payments made in cash shall exceed $50,000
(or the equivalent thereof in any Foreign Currency) or a lesser sum in Dollars
(or the equivalent thereof in any Foreign Currency) if the Issuer shall so
request with respect to the Securities of any particular series, such cash shall
be applied on the next succeeding sinking fund payment date to the redemption of
Securities of such series at the sinking fund redemption price together with
accrued interest to the date fixed for redemption. If such amount shall be
$50,000 (or the equivalent thereof in any Foreign Currency) or less and the
Issuer makes no such request then it shall be carried over until a sum in excess
of $50,000 (or the equivalent thereof in any Foreign Currency) is available. The
Trustee shall select, in the manner provided in Section 12.2, for redemption on
such sinking fund payment date a sufficient principal amount of Securities of
such series to absorb said cash, as nearly as may be, and shall (if requested in
writing by the Issuer) inform the Issuer of the serial numbers of the Securities
of such series (or portions thereof) so selected. Securities shall be excluded
from eligibility for redemption under this Section if they are identified by
registration and certificate number in an Officer's Certificate delivered to the
Trustee at least 60 days prior to the sinking fund payment date as being owned
of record and beneficially by, and not pledged or hypothecated by, either (a)
the Issuer or (b) an entity specifically identified in such Officer's
Certificate as directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer. The Trustee, in the name and
at the expense of the Issuer (or the Issuer, if it shall so request the Trustee
in writing) shall cause notice of redemption of the Securities of such series to
be given in substantially the manner provided in Section 12.2 (and with the
effect provided in Section 12.3) for the redemption of Securities of such series
in part at the option of the Issuer. The amount of any sinking fund payments not
so applied or allocated to the redemption of Securities of such series shall be
added to the next cash sinking fund payment for such series and, together with
such payment, shall be applied in accordance with the provisions of this
Section. Any and all sinking fund moneys held on the stated maturity date of the
Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the

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<PAGE>

payment or redemption of particular Securities of such series shall be applied,
together with other moneys, if necessary, sufficient for the purpose, to the
payment of the principal of, and interest on, the Securities of such series at
maturity.

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

     The Trustee shall not redeem or cause to be redeemed any Securities of a
series with sinking fund moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the giving of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Issuer a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default be deemed to have been collected
under Article Five and held for the payment of all such Securities. In case such
Event of Default shall have been waived as provided in Section 5.10 or the
default cured on or before the sixtieth day preceding the sinking fund payment
date in any year, such moneys shall thereafter be applied on the next succeeding
sinking fund payment date in accordance with this Section to the redemption of
such Securities.

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

                                       STILLWATER MINING COMPANY

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

Attest:

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

                                       [                     ], as Trustee

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

Attest:

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

                                       68

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