Document:

<PAGE>

                                                                     EXHIBIT 4.6

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

                        MARTIN OPERATING PARTNERSHIP L.P.

                                                                       as Issuer

                         MARTIN MIDSTREAM PARTNERS L.P.

                                                                    as Guarantor

                                       and

                                   [         ]
                                                                      as Trustee

                          ___________________________

                                    Indenture

                       Dated as of _________________, 2004

                          ___________________________

                          Subordinated Debt Securities

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

<PAGE>

                        MARTIN OPERATING PARTNERSHIP L.P.

           RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
                 AND INDENTURE, DATED AS OF _____________, 2004

<TABLE>
<CAPTION>
   Section of
 Trust Indenture                                               Section(s) of
   Act of 1939                                                   Indenture
-----------------                                             ---------------
<S>                                                           <C>
Section 310(a)(1)........................................     7.10
           (a)(2)........................................     7.10
           (a)(3)........................................     Not Applicable
           (a)(4)........................................     Not Applicable
           (a)(5)........................................     7.10
           (b)...........................................     7.08, 7.10
Section 311(a)...........................................     7.11
           (b)...........................................     7.11
           (c)...........................................     Not Applicable
Section 312(a)...........................................     2.07
           (b)...........................................     12.03
           (c)...........................................     12.03
Section 313(a)...........................................     7.06
           (b)...........................................     7.06
           (c)...........................................     7.06
           (d)...........................................     7.06
Section 314(a)...........................................     4.03, 4.04
           (b)...........................................     Not Applicable
           (c)(1)........................................     12.04
           (c)(2)........................................     12.04
           (c)(3)........................................     Not Applicable
           (d)...........................................     Not Applicable
           (e)...........................................     12.05
Section 315(a)...........................................     7.01(b)
           (b)...........................................     7.05
           (c)...........................................     7.01(a)
           (d)...........................................     7.01(c)
           (d)(1)........................................     7.01(c)(1)
           (d)(2)........................................     7.01(c)(2)
           (d)(3)........................................     7.01(c)(3)
           (e)...........................................     6.11
Section 316(a)(1)(A).....................................     6.05
           (a)(1)(B).....................................     6.04
           (a)(2)........................................     Not Applicable
           (a)(last sentence)............................     2.11
           (b)...........................................     6.07
Section 317(a)(1)........................................     6.08
           (a)(2)........................................     6.09
           (b)...........................................     2.06
Section 318(a)...........................................     12.01
</TABLE>

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

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

                                       i
<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                                        PAGE
                                                                                                                        ----
<S>                                                                                                                     <C>
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................         1

     SECTION 1.01          Definitions...........................................................................         1
     SECTION 1.02          Other Definitions.....................................................................         6
     SECTION 1.03          Incorporation by Reference of Trust Indenture Act.....................................         6
     SECTION 1.04          Rules of Construction.................................................................         7
     SECTION 1.05          Non-Recourse to the General Partner; No Personal Liability of Officers, Directors,
                           Employees or Partners.................................................................         7

ARTICLE II THE SECURITIES........................................................................................         8

     SECTION 2.01          Amount Unlimited; Issuable in Series..................................................         8
     SECTION 2.02          Denominations.........................................................................        11
     SECTION 2.03          Forms Generally.......................................................................        11
     SECTION 2.04          Execution, Authentication, Delivery and Dating........................................        11
     SECTION 2.05          Registrar and Paying Agent............................................................        13
     SECTION 2.06          Paying Agent to Hold Money in Trust...................................................        14
     SECTION 2.07          Holder Lists..........................................................................        14
     SECTION 2.08          Transfer and Exchange.................................................................        14
     SECTION 2.09          Replacement Securities................................................................        15
     SECTION 2.10          Outstanding Securities................................................................        15
     SECTION 2.11          Original Issue Discount, Foreign-Currency Denominated and Treasury Securities.........        16
     SECTION 2.12          Temporary Securities..................................................................        16
     SECTION 2.13          Cancellation..........................................................................        16
     SECTION 2.14          Payments; Defaulted Interest..........................................................        17
     SECTION 2.15          Persons Deemed Owners.................................................................        17
     SECTION 2.16          Computation of Interest...............................................................        17
     SECTION 2.17          Global Securities; Book-Entry Provisions..............................................        17

ARTICLE III REDEMPTION...........................................................................................        20

     SECTION 3.01          Applicability of Article..............................................................        20
     SECTION 3.02          Notice to the Trustee.................................................................        20
     SECTION 3.03          Selection of Securities To Be Redeemed................................................        20
     SECTION 3.04          Notice of Redemption..................................................................        20
     SECTION 3.05          Effect of Notice of Redemption........................................................        21
     SECTION 3.06          Deposit of Redemption Price...........................................................        21
     SECTION 3.07          Securities Redeemed or Purchased in Part..............................................        22
     SECTION 3.08          Purchase of Securities................................................................        22
     SECTION 3.09          Mandatory and Optional Sinking Funds..................................................        22
     SECTION 3.10          Satisfaction of Sinking Fund Payments with Securities.................................        23
     SECTION 3.11          Redemption of Securities for Sinking Fund.............................................        23
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                                      <C>
ARTICLE IV COVENANTS.............................................................................................        24

     SECTION 4.01          Payment of Securities.................................................................        24
     SECTION 4.02          Maintenance of Office or Agency.......................................................        24
     SECTION 4.03          SEC Reports; Financial Statements.....................................................        24
     SECTION 4.04          Compliance Certificate................................................................        25
     SECTION 4.05          Existence.............................................................................        25
     SECTION 4.06          Waiver of Stay, Extension or Usury Laws...............................................        26
     SECTION 4.07          Additional Amounts....................................................................        26

ARTICLE V SUCCESSORS.............................................................................................        26

     SECTION 5.01          Limitations on Mergers and Consolidations.............................................        26
     SECTION 5.02          Successor Person Substituted..........................................................        27

ARTICLE VI DEFAULTS AND REMEDIES.................................................................................        27

     SECTION 6.01          Events of Default.....................................................................        27
     SECTION 6.02          Acceleration..........................................................................        30
     SECTION 6.03          Other Remedies........................................................................        30
     SECTION 6.04          Waiver of Defaults....................................................................        30
     SECTION 6.05          Control by Majority...................................................................        31
     SECTION 6.06          Limitations on Suits..................................................................        31
     SECTION 6.07          Rights of Holders to Receive Payment..................................................        32
     SECTION 6.08          Collection Suit by Trustee............................................................        32
     SECTION 6.09          Trustee May File Proofs of Claim......................................................        32
     SECTION 6.10          Priorities............................................................................        33
     SECTION 6.11          Undertaking for Costs.................................................................        33

ARTICLE VII TRUSTEE..............................................................................................        34

     SECTION 7.01          Duties of Trustee.....................................................................        34
     SECTION 7.02          Rights of Trustee.....................................................................        35
     SECTION 7.03          May Hold Securities...................................................................        36
     SECTION 7.04          Trustee's Disclaimer..................................................................        36
     SECTION 7.05          Notice of Defaults....................................................................        36
     SECTION 7.06          Reports by Trustee to Holders.........................................................        36
     SECTION 7.07          Compensation and Indemnity............................................................        36
     SECTION 7.08          Replacement of Trustee................................................................        37
     SECTION 7.09          Successor Trustee by Merger, etc......................................................        39
     SECTION 7.10          Eligibility; Disqualification.........................................................        39
     SECTION 7.11          Preferential Collection of Claims Against the Partnership or the Guarantor............        40

ARTICLE VIII DISCHARGE OF INDENTURE..............................................................................        40

     SECTION 8.01          Termination of the Partnership's and the Guarantor's Obligations......................        40
     SECTION 8.02          Application of Trust Money............................................................        44
     SECTION 8.03          Repayment to Partnership or the Guarantor.............................................        44
     SECTION 8.04          Reinstatement.........................................................................        44
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>                                                                                                                      <C>
ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS................................................................        45

     SECTION 9.01          Without Consent of Holders............................................................        45
     SECTION 9.02          With Consent of Holders...............................................................        46
     SECTION 9.03          Compliance with Trust Indenture Act...................................................        48
     SECTION 9.04          Revocation and Effect of Consents.....................................................        48
     SECTION 9.05          Notation on or Exchange of Securities.................................................        49
     SECTION 9.06          Trustee to Sign Amendments, etc.......................................................        49

ARTICLE X SUBORDINATION OF SECURITIES AND GUARANTEE..............................................................        49

     SECTION 10.01         Applicability of Article; Agreement To Subordinate....................................        49
     SECTION 10.02         Liquidation, Dissolution, Bankruptcy..................................................        49
     SECTION 10.03         Default on Senior Indebtedness........................................................        50
     SECTION 10.04         Acceleration of Payment of Securities.................................................        51
     SECTION 10.05         When Distribution Must Be Paid Over...................................................        51
     SECTION 10.06         Subrogation...........................................................................        51
     SECTION 10.07         Relative Rights.......................................................................        52
     SECTION 10.08         Subordination May Not Be Impaired by Partnership......................................        52
     SECTION 10.09         Rights of Trustee and Paying Agent....................................................        52
     SECTION 10.10         Distribution or Notice to Representative..............................................        52
     SECTION 10.11         Article X Not to Prevent Defaults or Limit Right to Accelerate........................        52
     SECTION 10.12         Trust Moneys Not Subordinated.........................................................        53
     SECTION 10.13         Trustee Entitled to Rely..............................................................        53
     SECTION 10.14         Trustee to Effectuate Subordination...................................................        53
     SECTION 10.15         Trustee Not Fiduciary for Holders of Senior Indebtedness..............................        54
     SECTION 10.16         Reliance by Holders of Senior Indebtedness on Subordination Provisions................        54

ARTICLE XI GUARANTEE.............................................................................................        54

     SECTION 11.01         Unconditional Guarantee...............................................................        54
     SECTION 11.02         Execution and Delivery of Guarantee...................................................        56
     SECTION 11.03         Limitation on Liability of the Guarantor..............................................        56
     SECTION 11.04         Release of Guarantor from Guarantee...................................................        57

ARTICLE XII MISCELLANEOUS........................................................................................        57

     SECTION 12.01         Trust Indenture Act Controls..........................................................        57
     SECTION 12.02         Notices...............................................................................        57
     SECTION 12.03         Communication by Holders with Other Holders...........................................        58
     SECTION 12.04         Certificate and Opinion as to Conditions Precedent....................................        58
     SECTION 12.05         Statements Required in Certificate or Opinion.........................................        59
     SECTION 12.06         Rules by Trustee and Agents...........................................................        59
     SECTION 12.07         Legal Holidays........................................................................        59
     SECTION 12.08         No Recourse Against Others............................................................        59
     SECTION 12.09         Governing Law.........................................................................        60
     SECTION 12.10         No Adverse Interpretation of Other Agreements.........................................        60
     SECTION 12.11         Successors............................................................................        60
</TABLE>

                                       iv
<PAGE>

<TABLE>
<S>                                                                                                                      <C>
     SECTION 12.12         Severability..........................................................................        60
     SECTION 12.13         Counterpart Originals.................................................................        60
     SECTION 12.14         Table of Contents, Headings, etc......................................................        60
</TABLE>

                                       v

<PAGE>

            INDENTURE dated as of _____________, 2003 among Martin Operating
Partnership L.P., a Delaware limited partnership (the "Partnership"), Martin
Midstream Partners L.P., a Delaware limited partnership (the "Guarantor"), and [
], a ___________, as trustee (the "Trustee").

            The Partnership and the Guarantor have duly authorized the execution
and delivery of this Indenture to provide for the issuance from time to time of
the Partnership's debentures, notes, bonds or other evidences of indebtedness to
be issued in one or more series unlimited as to principal amount (herein called
the "Securities"), and the Guarantee by the Guarantor of the Securities, as in
this Indenture provided.

            The Partnership and the Guarantor are members of the same
consolidated group of companies. The Guarantor will derive direct and indirect
economic benefit from the issuance of the Securities. Accordingly, the Guarantor
has duly authorized the execution and delivery of this Indenture to provide for
its full, unconditional and joint and several guarantee of the Securities to the
extent provided in or pursuant to this Indenture.

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

                                   ARTICLE I
                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01      Definitions.

            "Additional Amounts" means any additional amounts required by the
express terms of a Security or by or pursuant to a Board Resolution, under
circumstances specified therein or pursuant thereto, to be paid by the
Partnership or the Guarantor, as the case may be, with respect to certain taxes,
assessments or other governmental charges imposed on certain Holders and that
are owing to such Holders.

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

            "Agent" means any Registrar or Paying Agent.

            "Bankruptcy Law" means Title 11 of the United States Code or any
similar federal, state or foreign law for the relief of debtors.

            "Board of Directors," means the Board of Directors of the General
Partner or any authorized committee of the Board of Directors of the General
Partner or any directors and/or officers of the General Partner to whom such
Board of Directors or such committee shall have duly delegated its authority to
act hereunder.

                                       1
<PAGE>

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

            "Business Day" means any day that is not a Legal Holiday.

            "Corporate Trust Office of the Trustee" means the office of the
Trustee located at ________________________________, Attention:
____________________, and as may be located at such other address as the Trustee
may give notice to the Partnership and the Guarantor.

            "Debt" of any Person at any date means any obligation created or
assumed by such Person for the repayment of borrowed money and any guarantee
thereof.

            "Default" means any event, act or condition that is, or after notice
or the passage of time or both would be, an Event of Default.

            "Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in global form, the Person specified
pursuant to Section 2.01 hereof as the initial Depositary with respect to the
Securities of such series, until a successor shall have been appointed and
become such pursuant to the applicable provision of this Indenture, and
thereafter "Depositary" shall mean or include such successor.

            "Designated Senior Indebtedness" means (i) any Senior Indebtedness
which, at the date of determination, has an aggregate principal amount
outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to, at least $100.0 million and (ii) any other
Senior Indebtedness designated, as provided in Section 2.01, in respect of any
series of Securities.

            "Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debt.

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

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

            "General Partner" means Martin Midstream GP LLC, a Delaware limited
liability company.

            "Global Security" means a Security that is issued in global form in
the name of the Depositary with respect thereto or its nominee.

                                       2
<PAGE>

            "Government Obligations" means, with respect to a series of
Securities, direct obligations of the government that issues the currency in
which the Securities of the series are payable for the payment of which the full
faith and credit of such government is pledged, or obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of such
government, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by such government.

            "Guarantee" shall mean the guarantee of the Partnership's
obligations under the Securities by the Guarantor as provided in Article XI.

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

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

            "Indenture" means this Indenture as amended or supplemented from
time to time pursuant to the provisions hereof, and includes the terms of a
particular series of Securities established as contemplated by Section 2.01.

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

            "Interest Payment Date," when used with respect to any Security,
shall have the meaning assigned to such term in the Security as contemplated by
Section 2.01.

            "Issue Date" means, with respect to Securities of a series, the date
on which the Securities of such series are originally issued under this
Indenture.

            "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in any of The City of New York, New York or a Place of Payment are
authorized or obligated by law, regulation or executive order to remain closed.

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

            "Officer" means the Chief Executive Officer, the President, the
Chief Operating Officer, any Vice President, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Assistant Secretary of a Person.

            "Officers' Certificate" means a certificate signed by two Officers
of a Person.

            "Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. Such counsel may be an employee of or counsel to
the Partnership and the Guarantor or the Trustee.

                                       3
<PAGE>

            "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 6.02.

            "Partnership" means the Person named as the "Partnership" in the
first paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Partnership" shall mean such successor Person; provided, however, that for
purposes of any provision contained herein which is required by the TIA,
"Partnership" shall also mean each other obligor (if any), other than the
Guarantor, on the Securities of a series.

            "Partnership Order" and "Partnership Request" mean, respectively, a
written order or request signed in the name of the Partnership or the Guarantor
by two Officers of the General Partner and delivered to the Trustee.

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

            "Place of Payment" means, with respect to the Securities of any
series, the place or places where the principal of, premium (if any) and
interest on and any Additional Amounts with respect to the Securities of that
series are payable as specified in accordance with Section 2.01 subject to the
provisions of Section 4.02.

            "principal" of a Security means the principal of the Security plus,
when appropriate, the premium, if any, on the Security.

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

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

            "Representative" means the trustee, agent or representative (if any)
for an issue of Senior Indebtedness.

            "Responsible Officer" means any officer within the corporate trust
department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other
officer of the Trustee who customarily performs 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 such person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.

            "Rule 144A Securities" means Securities of a series designated
pursuant to Section 2.01 as entitled to the benefits of Section 4.03(b).

                                       4
<PAGE>

            "SEC" means the Securities and Exchange Commission.

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

            "Security Custodian" means, with respect to Securities of a series
issued in global form, the Trustee for Securities of such series, as custodian
with respect to the Securities of such series, or any successor entity thereto.

            "Senior Indebtedness," unless otherwise provided with respect to the
Securities of a series as contemplated by Section 2.01, means (1) all Debt of
the Guarantor or the Partnership, whether currently outstanding or hereafter
issued, unless, by the terms of the instrument creating or evidencing such Debt,
it is provided that such Debt is not superior in right of payment to the
Securities, in the case of the Partnership, or the Guarantee, in the case of the
Guarantor, or to other Debt which is pari passu with or subordinated to the
Securities, in the case of the Partnership, or the Guarantee, in the case of the
Guarantor, and (2) any modifications, refunding, deferrals, renewals, or
extensions of any such Debt or securities, notes or other evidence of Debt
issued in exchange for such Debt; provided that in no event shall "Senior
Indebtedness" include (a) Debt evidenced by the Securities or any Guarantee, (b)
Debt of the Guarantor or the Partnership owed or owing to any Subsidiary of the
Partnership, (c) Debt of the Guarantor owed or owing to the Partnership, (d)
Debt to trade creditors, (e) any liability for taxes owed or owing by the
Guarantor or the Partnership or (f) Debt of the Guarantor in the event there is
no series of Securities outstanding that is entitled to the benefits of a
Guarantee.

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

            "Subsidiary" of any Person means:

            (1)   any corporation, association or other business entity of which
                  more than 50% of the total voting power of equity interests
                  entitled, without regard to the occurrence of any contingency,
                  to vote in the election of directors, managers, trustees or
                  equivalent Persons thereof is at the time of determination
                  owned or controlled, directly or indirectly, by such Person or
                  one or more of the other Subsidiaries of such Person or
                  combination thereof; or

            in the case of a partnership, more than 50% of the partners' equity
interests, considering all partners' equity interests as a single class, is at
such time of determination owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person or combination
thereof.

            "TIA" means the Trust Indenture Act of 1939, as amended, as in
effect on the date hereof.

                                       5
<PAGE>

            "Trustee" means the Person named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture, and
thereafter "Trustee" means 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 means the Trustee with respect to Securities of
that series.

            "United States" means the United States of America (including the
States and the District of Columbia) and its territories and possessions, which
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.

            "U.S. Government Obligations" means Government Obligations with
respect to Securities payable in Dollars.

SECTION 1.02 Other Definitions.

<TABLE>
<CAPTION>
                                                              DEFINED
                TERM                                         IN SECTION
                ----                                         ----------
<S>                                                          <C>
"Bankruptcy Custodian".............................            6.01
"Conversion Event".................................            6.01
"covenant defeasance"..............................            8.01
"Event of Default".................................            6.01
"Exchange Rate"....................................            2.11
"Funding Guarantor"................................            11.05
"Judgment Currency"................................            6.10
"legal defeasance".................................            8.01
"mandatory sinking fund payment"...................            3.09
"optional sinking fund payment"....................            3.09
"Paying Agent".....................................            2.05
"Registrar"........................................            2.05
"Required Currency"................................            6.10
"Successor"........................................            5.01
"Subordinated Securities"..........................            10.01
</TABLE>

SECTION 1.03      Incorporation by Reference of Trust Indenture Act.

            Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture (and
if the Indenture is not qualified under the TIA at that time, as if it were so
qualified unless otherwise provided). The following TIA terms used in this
Indenture have the following meanings:

            "Commission" means the SEC.

            "indenture securities" means the Securities.

            "indenture security holder" means a Holder.

            "indenture to be qualified" means this Indenture.

                                       6
<PAGE>

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

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

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

SECTION 1.04      Rules of Construction.

            Unless the context otherwise requires:

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

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

            (3)   "or" is not exclusive;

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

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

            (6)   all references in this instrument to Articles and Sections are
                  references to the corresponding Articles and Sections in and
                  of this instrument.

SECTION 1.05      Non-Recourse to the General Partner; No Personal Liability of
                  Officers, Directors, Employees or Partners.

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

                                       7
<PAGE>

                                   ARTICLE II
                                 THE SECURITIES

SECTION 2.01 Amount Unlimited; Issuable in Series.

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

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

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

            (2)   if there is to be a limit, the limit upon the aggregate
      principal amount of the Securities of the series that may be authenticated
      and delivered under this Indenture (except for Securities authenticated
      and delivered upon registration of transfer of, or in exchange for, or in
      lieu of, other Securities of the series pursuant to Section 2.08, 2.09,
      2.12, 2.17, 3.07 or 9.05 and except for any Securities which, pursuant to
      Section 2.04 or 2.17, are deemed never to have been authenticated and
      delivered hereunder); provided, however, that unless otherwise provided in
      the terms of the series, the authorized aggregate principal amount of such
      series may be increased before or after the issuance of any Securities of
      the series by a Board Resolution (or action pursuant to a Board
      Resolution) to such effect;

            (3)   whether any Securities of the series are to be issuable
      initially in temporary global form and whether any Securities of the
      series are to be issuable in permanent global form, as Global Securities
      or otherwise, and, if so, whether beneficial owners of interests in any
      such Global Security may exchange such interests for Securities of such
      series and of like tenor of any authorized form and denomination and the
      circumstances under which any such exchanges may occur, if other than in
      the manner provided in Section 2.17, and the initial Depositary and
      Security Custodian, if any, for any Global Security or Securities of such
      series;

            (4)   the manner in which any interest payable on a temporary Global
      Security on any Interest Payment Date will be paid if other than in the
      manner provided in Section 2.14;

            (5)   the date or dates on which the principal of and premium (if
      any) on the Securities of the series is payable or the method of
      determination thereof;

            (6)   the rate or rates, or the method of determination thereof, at
      which the Securities of the series shall bear interest, if any, whether
      and under what circumstances Additional Amounts with respect to such
      Securities shall be payable, the date or dates from which such interest
      shall accrue, the Interest Payment Dates on which such interest shall be
      payable and the record date for the interest payable on any Securities on
      any

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      Interest Payment Date, or if other than provided herein, the Person to
      whom any interest on Securities of the series shall be payable;

            (7)   the place or places where, subject to the provisions of
      Section 4.02, the principal of, premium (if any) and interest on and any
      Additional Amounts with respect to the Securities of the series shall be
      payable;

            (8)   the period or periods within which, the price or prices
      (whether denominated in cash, securities or otherwise) at which and the
      terms and conditions upon which Securities of the series may be redeemed,
      in whole or in part, at the option of the Partnership, if the Partnership
      is to have that option, and the manner in which the Partnership must
      exercise any such option, if different from those set forth herein;

            (9)   whether Securities of the series are entitled to the benefits
      of any Guarantee of the Guarantor pursuant to this Indenture;

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

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

            (12)  if other than Dollars, the currency or currencies (including
      composite currencies) or the form, including equity securities, other debt
      securities (including Securities), warrants or any other securities or
      property of the Partnership and the Guarantor or any other Person, in
      which payment of the principal of, premium (if any) and interest on and
      any Additional Amounts with respect to the Securities of the series shall
      be payable;

            (13)  if the principal of, premium (if any) or interest on or any
      Additional Amounts with respect to the Securities of the series are to be
      payable, at the election of the Partnership or a Holder thereof, in a
      currency or currencies (including composite currencies) other than that in
      which the Securities are stated to be payable, the currency or currencies
      (including composite currencies) in which payment of the principal of,
      premium (if any) and interest on and any Additional Amounts with respect
      to Securities of such series as to which such election is made shall be
      payable, and the periods within which and the terms and conditions upon
      which such election is to be made;

            (14)  if the amount of payments of principal of, premium (if any)
      and interest on and any Additional Amounts with respect to the Securities
      of the series may be determined with reference to any commodities,
      currencies or indices, values, rates or prices or any other index or
      formula, the manner in which such amounts shall be determined;

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            (15)  if other than the entire principal amount thereof, the portion
      of the principal amount of Securities of the series that shall be payable
      upon declaration of acceleration of the Maturity thereof pursuant to
      Section 6.02;

            (16)  any additional means of satisfaction and discharge of this
      Indenture and any additional conditions or limitations to discharge with
      respect to Securities of the series and the related Guarantee pursuant to
      Article VIII or any modifications of or deletions from such conditions or
      limitations;

            (17)  any deletions or modifications of or additions to the Events
      of Default set forth in Section 6.01 or covenants of the Partnership or
      the Guarantor set forth in Article IV pertaining to the Securities of the
      series;

            (18)  any restrictions or other provisions with respect to the
      transfer or exchange of Securities of the series, which may amend,
      supplement, modify or supersede those contained in this Article II;

            (19)  if the Securities of the series are to be convertible into or
      exchangeable for capital stock, other debt securities (including
      Securities), warrants, other equity securities or any other securities or
      property of the Partnership and the Guarantor or any other Person, at the
      option of the Partnership or the Holder or upon the occurrence of any
      condition or event, the terms and conditions for such conversion or
      exchange;

            (20)  the subordination, if any, of the Securities of the series
      pursuant to Article X and any changes or additions to Article X or
      designation of any Designated Senior Indebtedness;

            (21)  whether the Securities of the series are to be entitled to the
      benefit of Section 4.03(b) (and accordingly constitute Rule 144A
      Securities); and

            (22)  any other terms of the series (which terms shall not be
      prohibited by the provisions of this Indenture).

            All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 2.03) set
forth, or determined in the manner provided, in the Officers' Certificate or
Partnership Order referred to above or in any such indenture supplemental
hereto.

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

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SECTION 2.02      Denominations.

            The Securities of each series shall be issuable in such
denominations as shall be specified as contemplated by Section 2.01. In the
absence of any such provisions with respect to the Securities of any series, the
Securities of such series denominated in Dollars shall be issuable in
denominations of $1,000 and any integral multiples thereof.

SECTION 2.03      Forms Generally.

            The Securities of each series shall be in fully registered form and
in substantially such form or forms (including temporary or permanent global
form) established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto. The Securities may have notations, legends or
endorsements required by law, securities exchange rule, the Partnership's
certificate of limited partnership, agreement of limited partnership or other
similar governing documents, agreements to which the Partnership is subject, if
any, or usage (provided that any such notation, legend or endorsement is in a
form acceptable to the Partnership). A copy of the Board Resolution establishing
the form or forms of Securities of any series shall be delivered to the Trustee
at or prior to the delivery of the Partnership Order contemplated by Section
2.04 for the authentication and delivery of such Securities.

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

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

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

                                         [                      ], as Trustee

                                         By: ___________________________________
                                             Authorized Signatory".

SECTION 2.04      Execution, Authentication, Delivery and Dating.

            Two Officers of the General Partner shall sign the Securities on
behalf of the Partnership and, with respect to the Guarantee of the Securities,
two Officers of the General Partner shall sign the Securities on behalf of the
Guarantor, in each case by manual or facsimile signature.

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

            A Security shall not be entitled to any benefit under this Indenture
or the related Guarantee or be valid or obligatory for any purpose until
authenticated by the manual signature of an authorized signatory of the Trustee,
which signature shall be conclusive evidence that the

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Security has been authenticated under this Indenture. Notwithstanding the
foregoing, if any Security has been authenticated and delivered hereunder but
never issued and sold by the Partnership, and the Partnership delivers such
Security to the Trustee for cancellation as provided in Section 2.13, together
with a written statement (which need not comply with Section 12.05 and need not
be accompanied by an Opinion of Counsel) stating that such Security has never
been issued and sold by the Partnership, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture or the
related Guarantee.

            At any time and from time to time after the execution and delivery
of this Indenture, the Partnership may deliver Securities of any series executed
by the Partnership and the Guarantor to the Trustee for authentication, and the
Trustee shall authenticate and deliver such Securities for original issue upon a
Partnership Order for the authentication and delivery of such Securities or
pursuant to such procedures acceptable to the Trustee as may be specified from
time to time by Partnership Order. Such order shall specify the amount of the
Securities to be authenticated, the date on which the original issue of
Securities is to be authenticated, the name or names of the initial Holder or
Holders and any other terms of the Securities of such series not otherwise
determined. If provided for in such procedures, such Partnership Order may
authorize (1) authentication and delivery of Securities of such series for
original issue from time to time, with certain terms (including, without
limitation, the Maturity dates or dates, original issue date or dates and
interest rate or rates) that differ from Security to Security and (2) may
authorize authentication and delivery pursuant to oral or electronic
instructions from the Partnership or its duly authorized agent, which
instructions shall be promptly confirmed in writing.

            If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Section 2.01, 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 addition to the Partnership Order
referred to above and the other documents required by Section 12.04), and
(subject to Section 7.01) shall be fully protected in relying upon:

            (a)   an Officers' Certificate setting forth the Board Resolution
      and, if applicable, an appropriate record of any action taken pursuant
      thereto, as contemplated by the last paragraph of Section 2.01; and

            (b)   an Opinion of Counsel to the effect that:

                  (i)   the form of such Securities has been established in
            conformity with the provisions of this Indenture;

                  (ii)  the terms of such Securities have been established in
            conformity with the provisions of this Indenture; and

                  (iii) that, when authenticated and delivered by the Trustee
            and issued by the Partnership in the manner and subject to any
            conditions specified in such Opinion of Counsel, such Securities and
            the related Guarantee will constitute

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            valid and binding obligations of the Partnership and the Guarantor,
            respectively, enforceable against the Partnership and the Guarantor,
            respectively, in accordance with their respective terms, except as
            the enforceability thereof may be limited by applicable bankruptcy,
            insolvency, reorganization, moratorium, fraudulent conveyance or
            other similar laws in effect from time to time affecting the rights
            of creditors generally, and the application of general principles of
            equity (regardless of whether such enforceability is considered in a
            proceeding in equity or at law).

            If all the Securities of any series are not to be issued at one
time, it shall not be necessary to deliver an Officers' Certificate and Opinion
of Counsel at the time of issuance of each such Security, but such Officers'
Certificate and Opinion of Counsel shall be delivered at or before the time of
issuance of the first Security of the series to be issued.

            The Trustee shall not be required to authenticate such Securities if
the issuance of such Securities pursuant to this Indenture would affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner not reasonably acceptable to the Trustee.

            The Trustee may appoint an authenticating agent acceptable to the
Partnership to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Partnership and the Guarantor or an
Affiliate of the Partnership and the Guarantor.

            Each Security shall be dated the date of its authentication.

SECTION 2.05      Registrar and Paying Agent.

            The Partnership shall maintain an office or agency for each series
of Securities where Securities of such series may be presented for registration
of transfer or exchange ("Registrar") and an office or agency where Securities
of such series may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Securities of such series and of their transfer and
exchange. The Partnership may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent.

            The Partnership shall enter into an appropriate agency agreement
with any Registrar or Paying Agent not a party to this Indenture. The agreement
shall implement the provisions of this Indenture that relate to such Agent. The
Partnership shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. The Partnership may change any Paying Agent or
Registrar without notice to any Holder. If the Partnership fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Partnership and the Guarantor, or any Subsidiary may act as Paying
Agent or Registrar.

            The Partnership initially appoints the Trustee as Registrar and
Paying Agent.

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SECTION 2.06      Paying Agent to Hold Money in Trust.

            The Partnership shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, or interest on or any Additional
Amounts with respect to Securities and will notify the Trustee of any default by
the Partnership in making any such payment. While any such default continues,
the Trustee may require a Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed. The Partnership at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed. Upon payment over to the Trustee and upon accounting
for any funds disbursed, the Paying Agent (if other than the Partnership and the
Guarantor or a Subsidiary) shall have no further liability for the money. If the
Partnership and the Guarantor or a Subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Each Paying Agent shall otherwise comply with
TIA Section 317(b).

SECTION 2.07      Holder Lists.

            The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is
not the Registrar with respect to a series of Securities, the Partnership shall
furnish to the Trustee at least five Business Days before each Interest Payment
Date with respect to such series of Securities, and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders of such
series, and the Partnership shall otherwise comply with TIA Section 312(a).

SECTION 2.08      Transfer and Exchange.

            Except as set forth in Section 2.17 or as may be provided pursuant
to Section 2.01:

            When Securities of any series are presented to the Registrar with
the request to register the transfer of such Securities or to exchange such
Securities for an equal principal amount of Securities of the same series of
like tenor and of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested if its requirements and the
requirements of this Indenture for such transactions are met; provided, however,
that the Securities presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instruction of
transfer in form reasonably satisfactory to the Registrar duly executed by the
Holder thereof or by his attorney, duly authorized in writing, on which
instruction the Registrar can rely.

            To permit registrations of transfers and exchanges, the Partnership
and the Guarantor shall execute and the Trustee shall authenticate Securities at
the Registrar's written request and submission of the Securities or Global
Securities. No service charge shall be made to a Holder for any registration of
transfer or exchange (except as otherwise expressly permitted herein), but the
Partnership may require payment of a sum sufficient to cover any transfer tax or

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similar governmental charge payable in connection therewith (other than such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Section 2.12, 3.07 or 9.05). The Trustee shall authenticate Securities in
accordance with the provisions of Section 2.04. Notwithstanding any other
provisions of this Indenture to the contrary, the Partnership shall not be
required to register the transfer or exchange of (a) any Security selected for
redemption in whole or in part pursuant to Article III, except the unredeemed
portion of any Security being redeemed in part, or (b) any Security during the
period beginning 15 Business Days prior to the mailing of notice of any offer to
repurchase Securities of the series required pursuant to the terms thereof or of
redemption of Securities of a series to be redeemed and ending at the close of
business on the day of mailing.

SECTION 2.09      Replacement Securities.

            If any mutilated Security is surrendered to the Trustee, or if the
Holder of a Security claims that the Security has been destroyed, lost or stolen
and the Partnership and the Trustee receive evidence to their satisfaction of
the destruction, loss or theft of such Security, the Partnership shall issue,
the Guarantor shall execute and the Trustee shall authenticate a replacement
Security of the same series if the Trustee's requirements are met. If any such
mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, the Partnership in its discretion may, instead of issuing a new
Security, pay such Security. If required by the Trustee, the Guarantor, or the
Partnership, such Holder must furnish an indemnity bond that is sufficient in
the judgment of the Trustee and the Partnership to protect the Partnership and
the Guarantor, the Trustee, any Agent or any authenticating agent from any loss
that any of them may suffer if a Security is replaced. The Partnership and the
Trustee may charge a Holder for their expenses in replacing a Security.

            Every replacement Security is an additional obligation of the
Partnership.

SECTION 2.10      Outstanding Securities.

            The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee hereunder and those described in this Section 2.10 as
not outstanding.

            If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

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

            A Security does not cease to be outstanding because the Partnership
or the Guarantor, or an Affiliate of the Partnership and the Guarantor holds the
Security.

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SECTION 2.11      Original Issue Discount, Foreign-Currency Denominated and
                  Treasury Securities.

            In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, amendment, supplement, waiver or
consent, (a) the principal amount of an Original Issue Discount Security shall
be the principal amount thereof that would be due and payable as of the date of
such determination upon acceleration of the Maturity thereof pursuant to Section
6.02, (b) the principal amount of a Security denominated in a foreign currency
shall be the Dollar equivalent, as determined by the Partnership by reference to
the noon buying rate in The City of New York for cable transfers for such
currency, as such rate is certified for customs purposes by the Federal Reserve
Bank of New York (the "Exchange Rate") on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent, as determined by the Partnership by reference
to the Exchange Rate on the date of original issuance of such Security, of the
amount determined as provided in (a) above), of such Security and (c) Securities
owned by the Partnership and the Guarantor or any other obligor upon the
Securities or any Affiliate of the Partnership, of the Guarantor or of such
other obligor shall be disregarded, except that, for the purpose of determining
whether the Trustee shall be protected in relying upon any such direction,
amendment, supplement, waiver or consent, only Securities that a Responsible
Officer of the Trustee actually knows are so owned shall be so disregarded.

SECTION 2.12      Temporary Securities.

            Until definitive Securities of any series are ready for delivery,
the Partnership may prepare, the Guarantor shall execute and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities, but may have variations that the
Partnership considers appropriate for temporary Securities. Without unreasonable
delay, the Partnership shall prepare, the Guarantor shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.

SECTION 2.13      Cancellation.

            The Partnership or the Guarantor at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange, payment or redemption or for credit against any sinking fund
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment, redemption, replacement or cancellation or for
credit against any sinking fund. Unless the Partnership shall direct in writing
that canceled Securities be returned to it, after written notice to the
Partnership all canceled Securities held by the Trustee shall be disposed of in
accordance with the usual disposal procedures of the Trustee, and the Trustee
shall maintain a record of their disposal. The Partnership may not issue new
Securities to replace Securities that have been paid or that have been delivered
to the Trustee for cancellation.

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SECTION 2.14      Payments; Defaulted Interest.

            Unless otherwise provided as contemplated by Section 2.01, interest
(except defaulted interest) on any Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Persons who are registered Holders of that Security at the close of business on
the record date next preceding such Interest Payment Date, even if such
Securities are canceled after such record date and on or before such Interest
Payment Date. The Holder must surrender a Security to a Paying Agent to collect
principal payments. Unless otherwise provided with respect to the Securities of
any series, the Partnership will pay the principal of, premium (if any) and
interest on and any Additional Amounts with respect to the Securities in
Dollars. Such amounts shall be payable at the offices of the Trustee or any
Paying Agent, provided that at the option of the Partnership, the Partnership
may pay such amounts (1) by wire transfer with respect to Global Securities or
(2) by check payable in such money mailed to a Holder's registered address with
respect to any Securities.

            If the Partnership defaults in a payment of interest on the
Securities of any series, the Partnership shall pay the defaulted interest in
any lawful manner plus, to the extent lawful, interest on the defaulted
interest, in each case at the rate provided in the Securities of such series and
in Section 4.01. The Partnership may pay the defaulted interest to the Persons
who are Holders on a subsequent special record date. At least 15 days before any
special record date selected by the Partnership, the Partnership (or the
Trustee, in the name of and at the expense of the Partnership upon 20 days'
prior written notice from the Partnership setting forth such special record date
and the interest amount to be paid) shall mail to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.

SECTION 2.15      Persons Deemed Owners.

            The Partnership and the Guarantor, the Trustee, any Agent and any
authenticating agent may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of receiving payments
of principal of, premium (if any) or interest on or any Additional Amounts with
respect to such Security and for all other purposes. None of the Partnership and
the Guarantor, the Trustee, any Agent or any authenticating agent shall be
affected by any notice to the contrary.

SECTION 2.16      Computation of Interest.

            Except as otherwise specified as contemplated by Section 2.01 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year comprising twelve 30-day months.

SECTION 2.17      Global Securities; Book-Entry Provisions.

            If Securities of a series are issuable in global form as a Global
Security, as contemplated by Section 2.01, then, notwithstanding clause (11) of
Section 2.01 and the provisions of Section 2.02, any such Global Security shall
represent such of the outstanding Securities of such series as shall be
specified therein and may provide that it shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be

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reduced or increased, as appropriate, to reflect exchanges, transfers or
redemptions. Any endorsement of a Global Security to reflect the amount, or any
increase or decrease in the amount, of outstanding Securities represented
thereby shall be made by the Trustee (i) in such manner and upon instructions
given by such Person or Persons as shall be specified in such Security or in a
Partnership Order to be delivered to the Trustee pursuant to Section 2.04 or
(ii) otherwise in accordance with written instructions or such other written
form of instructions as is customary for the Depositary for such Security, from
such Depositary or its nominee on behalf of any Person having a beneficial
interest in such Global Security. Subject to the provisions of Section 2.04 and,
if applicable, Section 2.12, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified in such Security or in the applicable
Partnership Order. With respect to the Securities of any series that are
represented by a Global Security, the Partnership and the Guarantor authorize
the execution and delivery by the Trustee of a letter of representations or
other similar agreement or instrument in the form customarily provided for by
the Depositary appointed with respect to such Global Security. Any Global
Security may be deposited with the Depositary or its nominee, or may remain in
the custody of the Trustee or the Security Custodian therefor pursuant to a FAST
Balance Certificate Agreement or similar agreement between the Trustee and the
Depositary. If a Partnership Order has been, or simultaneously is, delivered,
any instructions by the Partnership with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 12.05 and need not be accompanied by an Opinion of Counsel.

            Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary, or the Trustee or the Security Custodian
as its custodian, or under such Global Security, and the Depositary may be
treated by the Partnership and the Guarantor, the Trustee or the Security
Custodian and any agent of the Partnership and the Guarantor, the Trustee or the
Security Custodian as the absolute owner of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, (i) the registered holder of
a Global Security of a series may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a Holder of Securities of such series is
entitled to take under this Indenture or the Securities of such series and (ii)
nothing herein shall prevent the Partnership and the Guarantor, the Trustee or
the Security Custodian, or any agent of the Partnership and the Guarantor, the
Trustee or the Security Custodian, from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or shall
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a beneficial owner
of any Security.

            Notwithstanding Section 2.08, and except as otherwise provided
pursuant to Section 2.01: Transfers of a Global Security shall be limited to
transfers of such Global Security in whole, but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary. Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in a Global Security if, and only if,
either (1) the Depositary notifies the Partnership that it is unwilling or
unable to continue as Depositary for the Global Security and a successor
Depositary is not appointed by the Partnership within 90 days of such notice,
(2) an Event of Default has occurred with respect to such series and is
continuing and the Registrar

                                       18
<PAGE>

has received a request from the Depositary to issue Securities in lieu of all or
a portion of the Global Security (in which case the Partnership shall deliver
Securities within 30 days of such request) or (3) the Partnership determines not
to have the Securities represented by a Global Security.

            In connection with any transfer of a portion of the beneficial
interests in a Global Security to beneficial owners pursuant to this Section
2.17, the Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the Global Security in an amount equal to
the principal amount of the beneficial interests in the Global Security to be
transferred, and the Partnership and the Guarantor shall execute, and the
Trustee upon receipt of a Partnership Order for the authentication and delivery
of Securities shall authenticate and deliver, one or more Securities of the same
series of like tenor and amount.

            In connection with the transfer of all the beneficial interests in a
Global Security to beneficial owners pursuant to this Section 2.17, the Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Partnership and the Guarantor shall execute, and the Trustee shall
authenticate and deliver, to each beneficial owner identified by the Depositary
in exchange for its beneficial interests in the Global Security, an equal
aggregate principal amount of Securities of authorized denominations.

            Neither the Partnership, the Guarantor nor the Trustee will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, Securities by the Depositary, or for maintaining,
supervising or reviewing any records of the Depositary relating to such
Securities. Neither the Partnership, the Guarantor nor the Trustee shall be
liable for any delay by the related Global Security Holder or the Depositary in
identifying the beneficial owners, and each such Person may conclusively rely
on, and shall be protected in relying on, instructions from such Global Security
Holder or the Depositary for all purposes (including with respect to the
registration and delivery, and the respective principal amounts, of the
Securities to be issued).

            The provisions of the last sentence of the third paragraph of
Section 2.04 shall apply to any Global Security if such Global Security was
never issued and sold by the Partnership and the Partnership and the Guarantor
delivers to the Trustee the Global Security together with written instructions
(which need not comply with Section 12.05 and need not be accompanied by an
Opinion of Counsel) with regard to the cancellation or reduction in the
principal amount of Securities represented thereby, together with the written
statement contemplated by the last sentence of the third paragraph of Section
2.04.

            Notwithstanding the provisions of Sections 2.03 and 2.14, unless
otherwise specified as contemplated by Section 2.01, payment of principal of,
premium (if any) and interest on and any Additional Amounts with respect to any
Global Security shall be made to the Person or Persons specified therein.

                                       19
<PAGE>

                                  ARTICLE III
                                   REDEMPTION

SECTION 3.01      Applicability of Article.

            Securities of any series that are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 2.01 for Securities of any
series) in accordance with this Article III.

SECTION 3.02      Notice to the Trustee.

            If the Partnership elects to redeem Securities of any series
pursuant to this Indenture, it shall notify the Trustee of the Redemption Date
and the principal amount of Securities of such series to be redeemed. The
Partnership shall so notify the Trustee at least 45 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee) by
delivering to the Trustee an Officers' Certificate stating that such redemption
will comply with the provisions of this Indenture and of the Securities of such
series. Any such notice may be canceled at any time prior to the mailing of such
notice of such redemption to any Holder and shall thereupon be void and of no
effect.

SECTION 3.03      Selection of Securities To Be Redeemed.

            If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee from the outstanding
Securities of such series (and tenor) not previously called for redemption,
either pro rata, by lot or by such other method as the Trustee shall deem fair
and appropriate and that may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series or of the principal amount of Global Securities of
such series.

            The Trustee shall promptly notify the Partnership and the Registrar
in writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.

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

SECTION 3.04      Notice of Redemption.

            Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at the address of such Holder
appearing in the register of Securities maintained by the Registrar.

                                       20
<PAGE>

            All notices of redemption shall identify the Securities to be
redeemed and shall state:

            (1)   the Redemption Date;

            (2)   the Redemption Price;

            (3)   that, unless the Partnership and the Guarantor default in
      making the redemption payment, interest on Securities called for
      redemption ceases to accrue on and after the Redemption Date, and the only
      remaining right of the Holders of such Securities is to receive payment of
      the Redemption Price upon surrender to the Paying Agent of the Securities
      redeemed;

            (4)   if any Security is to be redeemed in part, the portion of the
      principal amount thereof to be redeemed and that on and after the
      Redemption Date, upon surrender for cancellation of such Security to the
      Paying Agent, a new Security or Securities in the aggregate principal
      amount equal to the unredeemed portion thereof will be issued without
      charge to the Holder;

            (5)   that Securities called for redemption must be surrendered to
      the Paying Agent to collect the Redemption Price and the name and address
      of the Paying Agent;

            (6)   that the redemption is for a sinking or analogous fund, if
      such is the case; and

            (7)   the CUSIP number, if any, relating to such Securities.

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

SECTION 3.05      Effect of Notice of Redemption.

            Once notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the Redemption
Price. Upon surrender to the Paying Agent, such Securities called for redemption
shall be paid at the Redemption Price, but interest installments whose maturity
is on or prior to such Redemption Date will be payable on the relevant Interest
Payment Dates to the Holders of record at the close of business on the relevant
record dates specified pursuant to Section 2.01.

SECTION 3.06      Deposit of Redemption Price.

            On or prior to 11:00 a.m., New York City time, on any Redemption
Date, the Partnership or the Guarantor shall deposit with the Trustee or the
Paying Agent (or, if the Partnership or the Guarantor is acting as the Paying
Agent, segregate and hold in trust as provided in Section 2.06) an amount of
money in same day funds sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest on
and any Additional Amounts with respect to, the Securities or portions

                                       21
<PAGE>

thereof which are to be redeemed on that date, other than Securities or portions
thereof called for redemption on that date which have been delivered by the
Partnership or the Guarantor to the Trustee for cancellation.

            If the Partnership or the Guarantor complies with the preceding
paragraph, then, unless the Partnership or Guarantor default in the payment of
such Redemption Price, interest on the Securities to be redeemed will cease to
accrue on and after the applicable Redemption Date, whether or not such
Securities are presented for payment, and the Holders of such Securities shall
have no further rights with respect to such Securities except for the right to
receive the Redemption Price upon surrender of such Securities. If any Security
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal, premium, if any, any Additional Amounts, and, to the
extent lawful, accrued interest thereon shall, until paid, bear interest from
the Redemption Date at the rate specified pursuant to Section 2.01 or provided
in the Securities or, in the case of Original Issue Discount Securities, such
Securities' yield to maturity.

SECTION 3.07      Securities Redeemed or Purchased in Part.

            Upon surrender to the Paying Agent of a Security to be redeemed in
part, the Partnership and the Guarantor shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge a
new Security or Securities, of the same series and of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed.

SECTION 3.08      Purchase of Securities.

            Unless otherwise specified as contemplated by Section 2.01, the
Partnership and the Guarantor, and any Affiliate of the Partnership or the
Guarantor may, subject to applicable law, at any time purchase or otherwise
acquire Securities in the open market or by private agreement. Any such
acquisition shall not operate as or be deemed for any purpose to be a redemption
of the indebtedness represented by such Securities. Any Securities purchased or
acquired by the Partnership or the Guarantor may be delivered to the Trustee
and, upon such delivery, the indebtedness represented thereby shall be deemed to
be satisfied. Section 2.13 shall apply to all Securities so delivered.

SECTION 3.09      Mandatory and Optional Sinking Funds.

            The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." Unless otherwise provided by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 3.10. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series and by this Article III.

                                       22
<PAGE>

SECTION 3.10      Satisfaction of Sinking Fund Payments with Securities.

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

SECTION 3.11      Redemption of Securities for Sinking Fund.

            Not less than 45 days prior (unless a shorter period shall be
satisfactory to the Trustee) to each sinking fund payment date for any series of
Securities, the Partnership will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivery of or by crediting Securities of that series pursuant to
Section 3.10 and will also deliver or cause to be delivered to the Trustee any
Securities to be so delivered. Failure of the Partnership to timely deliver or
cause to be delivered such Officers' Certificate and Securities specified in
this paragraph, if any, shall not constitute a default but shall constitute the
election of the Partnership (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 Partnership will make no optional
sinking fund payment with respect to such series as provided in this Section
3.11.

            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 $100,000 (or the Dollar equivalent thereof based on the applicable
Exchange Rate on the date of original issue of the applicable Securities) or a
lesser sum if the Partnership 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 $100,000 (or the Dollar equivalent thereof
as aforesaid) or less and the Partnership makes no such request then it shall be
carried over until a sum in excess of $100,000 (or the Dollar equivalent thereof
as aforesaid) is available. Not less than 30 days before each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 3.03 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Partnership in the manner provided in Section 3.04. Such notice having
been duly given, the redemption of such Securities shall be made upon the terms
and in the manner stated in Sections 3.05, 3.06 and 3.07.

                                       23
<PAGE>

                                   ARTICLE IV
                                    COVENANTS

SECTION 4.01      Payment of Securities.

            The Partnership shall pay the principal of, premium (if any) and
interest on and any Additional Amounts with respect to the Securities of each
series on the dates and in the manner provided in the Securities of such series
and in this Indenture. Principal, premium, interest and any Additional Amounts
shall be considered paid on the date due if the Paying Agent (other than the
Partnership, the Guarantor or a Subsidiary) holds on that date money deposited
by the Partnership or the Guarantor designated for and sufficient to pay all
principal, premium, interest and any Additional Amounts then due.

            The Partnership shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium (if
any), at a rate equal to the then applicable interest rate on the Securities to
the extent lawful; and it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
and any Additional Amount (without regard to any applicable grace period) at the
same rate to the extent lawful.

SECTION 4.02      Maintenance of Office or Agency.

            The Partnership will maintain in each Place of Payment for any
series of Securities an office or agency (which may be an office of the Trustee,
the Registrar or the Paying Agent) where Securities of that series may be
presented for registration of transfer or exchange, where Securities of that
series may be presented for payment and where notices and demands to or upon the
Partnership or the Guarantor in respect of the Securities of that series and
this Indenture may be served. Unless otherwise designated by the Partnership by
written notice to the Trustee and the Guarantor, such office or agency shall be
the office of the Trustee in The City of New York, which on the date hereof is
located at ______________________________. The Partnership will give prompt
written notice to the Trustee and the Guarantor of the location, and any change
in the location, of such office or agency. If at any time the Partnership shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee and the Guarantor with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.

            The Partnership may also from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Partnership of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Partnership will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.

SECTION 4.03      SEC Reports; Financial Statements.

            (a)   If the Partnership or the Guarantor is subject to the
requirements of Section 13 or 15(d) of the Exchange Act, the Partnership or the
Guarantor, as the case may be,

                                       24
<PAGE>

shall file with the Trustee, within 15 days after it files the same with the
SEC, copies of the annual reports and the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) that the Partnership or the Guarantor is
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act. If this Indenture is qualified under the TIA, but not otherwise, the
Partnership and the Guarantor shall also comply with the provisions of TIA
Section 314(a). Delivery of such reports, information and documents to the
Trustee shall be for informational purposes only, and the Trustee's receipt
thereof shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Partnership's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates or
certificates delivered pursuant to Section 4.04).

            (b)   If neither the Partnership nor the Guarantor is subject to the
requirements of Section 13 or 15(d) of the Exchange Act, the Partnership and the
Guarantor shall furnish to all Holders of Rule 144A Securities and prospective
purchasers of Rule 144A Securities designated by the Holders of Rule 144A
Securities, promptly upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) promulgated under the Securities Act of
1933, as amended.

SECTION 4.04      Compliance Certificate.

            (a)   Each of the Partnership and the Guarantor shall deliver to the
Trustee, within 120 days after the end of each fiscal year, a statement signed
by an Officer of the General Partner, which need not constitute an Officers'
Certificate, complying with TIA Section 314(a)(4) and stating that in the course
of performance by the signing Officer of his duties as such Officer of the
General Partner, he would normally obtain knowledge of the keeping, observing,
performing and fulfilling by the Partnership or the Guarantor, as the case may
be, of its obligations under this Indenture, and further stating that to the
best of his knowledge the Partnership or the Guarantor, as the case may be, has
kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions hereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which such Officer may have knowledge and what action the Partnership or the
Guarantor, as the case may be, is taking or proposes to take with respect
thereto).

            (b)   The Partnership or the Guarantor shall, so long as Securities
of any series are outstanding, deliver to the Trustee, forthwith upon any
Officer of the General Partner, becoming aware of any Default or Event of
Default under this Indenture, an Officers' Certificate specifying such Default
or Event of Default and what action the Partnership or the Guarantor, as the
case may be, is taking or proposes to take with respect thereto.

SECTION 4.05      Existence.

            Subject to Article V, each of the Partnership and the Guarantor
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its existence.

                                       25
<PAGE>

SECTION 4.06      Waiver of Stay, Extension or Usury Laws.

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

SECTION 4.07      Additional Amounts.

            If the Securities of a series expressly provide for the payment of
Additional Amounts, the Partnership will pay to the Holder of any Security of
such series Additional Amounts as expressly provided therein. Whenever in this
Indenture there is mentioned, in any context, the payment of the principal of or
any premium or interest on, or in respect of, any Security of any series or the
net proceeds received from the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided for in this Section 4.07 to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section 4.07 and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.

                                   ARTICLE V
                                   SUCCESSORS

SECTION 5.01      Limitations on Mergers and Consolidations.

            Neither the Partnership nor the Guarantor shall, in any transaction
or series of transactions, consolidate with or merge into any Person, or sell,
lease, convey, transfer or otherwise dispose of all or substantially all of its
assets to any Person (other than a consolidation or merger of the Partnership
and the Guarantor, the Partnership and a Subsidiary, or the Guarantor and a
Subsidiary, or a sale, lease, conveyance, transfer or other disposition of all
or substantially all of the assets of the Partnership to the Guarantor, the
Guarantor to the Partnership, the Partnership to a Subsidiary, a Subsidiary to
the Partnership, the Guarantor to a Subsidiary, or a Subsidiary to the
Guarantor), unless:

            (1)   either (a) the Partnership or the Guarantor, as the case may
      be, shall be the continuing Person or (b) the Person (if other than the
      Partnership or the Guarantor) formed by such consolidation or into which
      the Partnership and the Guarantor is merged, or to which such sale, lease,
      conveyance, transfer or other disposition shall be made (collectively, the
      "Successor"), is organized and validly existing under the laws of the
      United States, any political subdivision thereof or any State thereof or
      the District of

                                       26
<PAGE>

      Columbia, and expressly assumes by supplemental indenture, in the case of
      the Partnership, the due and punctual payment of the principal of, premium
      (if any) and interest on and any Additional Amounts with respect to all
      the Securities and the performance of the Partnership's covenants and
      obligations under this Indenture and the Securities, or, in the case of
      the Guarantor, the performance of the Guarantee and the Guarantor's
      covenants and obligations under this Indenture and the Securities;

            (2)   immediately after giving effect to such transaction or series
      of transactions, no Default or Event of Default shall have occurred and be
      continuing or would result therefrom; and

            (3)   the Partnership or the Guarantor, as the case may be, delivers
      to the Trustee an Officers' Certificate and an Opinion of Counsel, each
      stating that the transaction and such supplemental indenture comply with
      this Indenture.

SECTION 5.02      Successor Person Substituted.

            Upon any consolidation or merger of the Partnership or the
Guarantor, as the case may be, or any sale, lease, conveyance, transfer or other
disposition of all or substantially all of the assets of the Partnership or the
Guarantor in accordance with Section 5.01, the Successor formed by such
consolidation or into or with which the Partnership or the Guarantor is merged
or to which such sale, lease, conveyance, transfer or other disposition is made
shall succeed to, and be substituted for, and may exercise every right and power
of the Partnership or the Guarantor, as the case may be, under this Indenture
and the Securities with the same effect as if such Successor had been named as
the Partnership or the Guarantor, as the case may be, herein and the predecessor
Partnership or Guarantor, in the case of a sale, conveyance, transfer or other
disposition, shall be released from all obligations under this Indenture, the
Securities and, in the case of the Guarantor, the Guarantee.

                                   ARTICLE VI
                              DEFAULTS AND REMEDIES

SECTION 6.01      Events of Default.

            Unless either inapplicable to a particular series or specifically
deleted or modified in or pursuant to the supplemental indenture or Board
Resolution establishing such series of Securities or in the form of Security for
such series, an "Event of Default," wherever used herein with respect to
Securities of any series, occurs if:

                  (1)   there is a default in the payment of interest on or any
      Additional Amounts with respect to any Security of that series when the
      same becomes due and payable and such default continues for a period of 30
      days;

                  (2)   there is a default in the payment of the principal of or
      premium, if any, on any Securities of that series as and when the same
      shall become due and payable, whether at Stated Maturity, upon redemption,
      by declaration, upon required repurchase or otherwise;

                                       27
<PAGE>

                  (3)   there is a default in the payment of any sinking fund
      payment with respect to any Securities of that series as and when the same
      shall become due and payable;

                  (4)   there is a failure on the part of the Partnership, or if
      any series of Securities outstanding under this Indenture is entitled to
      the benefits of a Guarantee by the Guarantor, the Guarantor, duly to
      observe or perform any other of the covenants or agreements on the part of
      the Partnership, or if applicable, the Guarantor, in the Securities of
      that series, in any resolution of the Board of Directors authorizing the
      issuance of that series of Securities, in this Indenture with respect to
      such series or in any supplemental Indenture with respect to such series
      (other than a default in the performance of a covenant which is
      specifically dealt with elsewhere in this Section 6.01), continuing for a
      period of 60 days after the date on which written notice specifying such
      failure and requiring the Partnership, or if applicable, the Guarantor, to
      remedy the same shall have been given, by registered or certified mail, to
      the Partnership, or if applicable, the Guarantor, by the Trustee or to the
      Partnership, or if applicable, the Guarantor, and the Trustee by the
      Holders of at least 25% in aggregate principal amount of the Securities of
      that series at the time outstanding;

                  (5)   the Partnership, or if any series of Securities
      outstanding under this Indenture is entitled to the benefits of a
      Guarantee by the Guarantor, the Guarantor, pursuant to or within the
      meaning of any Bankruptcy Law:

                  (A)   commences a voluntary case,

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

                  (C)   consents to the appointment of a Bankruptcy Custodian of
            it or for all or substantially all of its property, or

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

                  (6)   a court of competent jurisdiction enters an order or
      decree under any Bankruptcy Law that remains unstayed and in effect for 60
      days and that:

                  (A)   is for relief against the Partnership or the Guarantor
            as debtor in an involuntary case;

                  (B)   appoints a Bankruptcy Custodian of the Partnership or
            the Guarantor or a Bankruptcy Custodian for all or substantially all
            of the property of the Partnership or the Guarantor; or

                  (C)   orders the liquidation of the Partnership or the
            Guarantor;

                  (7)   If any series of Securities outstanding under this
      Indenture is entitled to the benefits of a Guarantee by the Guarantor, the
      Guarantee ceases to be in full force and effect with respect to Securities
      of that series (except as

                                       28
<PAGE>

      otherwise provided in this Indenture) or is declared null and void in a
      judicial proceeding or the Guarantor (if applicable) denies or disaffirms
      its obligations under this Indenture or such Guarantee; or

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

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

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

            When a Default is cured, it ceases.

            Notwithstanding the foregoing provisions of this Section 6.01, if
the principal of, premium (if any) or interest on or Additional Amounts with
respect to any Security is payable in a currency or currencies (including a
composite currency) other than Dollars and such currency or currencies are not
available to the Partnership or the Guarantor for making payment thereof due to
the imposition of exchange controls or other circumstances beyond the control of
the Partnership or the Guarantor (a "Conversion Event"), each of the Partnership
and the Guarantor will be entitled to satisfy its obligations to Holders of the
Securities by making such payment in Dollars in an amount equal to the Dollar
equivalent of the amount payable in such other currency, as determined by the
Partnership or the Guarantor making such payment, as the case may be, by
reference to the Exchange Rate on the date of such payment, or, if such rate is
not then available, on the basis of the most recently available Exchange Rate.
Notwithstanding the foregoing provisions of this Section 6.01, any payment made
under such circumstances in Dollars where the required payment is in a currency
other than Dollars will not constitute an Event of Default under this Indenture.

            Promptly after the occurrence of a Conversion Event, the Partnership
or the Guarantor shall give written notice thereof to the Trustee; and the
Trustee, promptly after receipt of such notice, shall give notice thereof in the
manner provided in Section 12.02 to the Holders. Promptly after the making of
any payment in Dollars as a result of a Conversion Event, the Partnership or the
Guarantor making such payment, as the case may be, shall give notice in the
manner provided in Section 12.02 to the Holders, setting forth the applicable
Exchange Rate and describing the calculation of such payments.

            A Default under clause (4) or (8) of this Section 6.01 is not an
Event of Default until the Trustee notifies the Partnership and the Guarantor,
or the Holders of at least 25% in principal amount of the then outstanding
Securities of the series affected by such Default (or, in the case of a Default
under clause (4) of this Section 6.01, if outstanding Securities of other series
are affected by such Default, then at least 25% in principal amount of the then
outstanding Securities so affected) notify the Partnership and the Guarantor and
the Trustee, of the Default,

                                       29
<PAGE>

and the Partnership or the Guarantor, as the case may be, fails to cure the
Default within 60 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default."

SECTION 6.02      Acceleration.

            If an Event of Default with respect to any Securities of any series
at the time outstanding (other than an Event of Default specified in clause (5)
or (6) of Section 6.01) occurs and is continuing, the Trustee by notice to the
Partnership and the Guarantor, or the Holders of at least 25% in principal
amount of the then outstanding Securities of the series affected by such Event
of Default (or, in the case of an Event of Default described in clause (4) of
Section 6.01, if outstanding Securities of other series are affected by such
Event of Default, then at least 25% in principal amount of the then outstanding
Securities so affected) by notice to the Partnership and the Guarantor and the
Trustee, may declare the principal of (or, if any such Securities are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) and all accrued and unpaid interest on
all then outstanding Securities of such series or of all series, as the case may
be, to be due and payable. Upon any such declaration, the amounts due and
payable on the Securities shall be due and payable immediately. If an Event of
Default specified in clause (5) or (6) of Section 6.01 hereof occurs, such
amounts shall ipso facto become and be immediately due and payable without any
declaration, notice or other act on the part of the Trustee or any Holder. The
Holders of a majority in principal amount of the then outstanding Securities of
the series affected by such Event of Default or all series, as the case may be,
by written notice to the Trustee may rescind an acceleration and its
consequences (other than nonpayment of principal of or premium or interest on or
any Additional Amounts with respect to the Securities) if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
with respect to Securities of that series (or of all series, as the case may be)
have been cured or waived, except nonpayment of principal, premium, interest or
any Additional Amounts that has become due solely because of the acceleration.

SECTION 6.03      Other Remedies.

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

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

SECTION 6.04      Waiver of Defaults.

            Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the then outstanding Securities of any series or of all
series (acting as one class) by notice to the Trustee may waive an existing or
past Default or Event of Default with respect to such series

                                       30
<PAGE>

or all series, as the case may be, and its consequences (including waivers
obtained in connection with a tender offer or exchange offer for Securities of
such series or all series or a solicitation of consents in respect of Securities
of such series or all series, provided that in each case such offer or
solicitation is made to all Holders of then outstanding Securities of such
series or all series (but the terms of such offer or solicitation may vary from
series to series)), except (1) a continuing Default or Event of Default in the
payment of the principal of, or premium, if any, or interest on or any
Additional Amounts with respect to any Security or (2) a continued Default in
respect of a provision that under Section 9.02 cannot be amended or supplemented
without the consent of each Holder affected. Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.

SECTION 6.05      Control by Majority.

            With respect to Securities of any series, the Holders of a majority
in principal amount of the then outstanding Securities of such series may direct
in writing the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on it
relating to or arising under an Event of Default described in clause (1), (2),
(3) or (7) of Section 6.01, and with respect to all Securities, the Holders of a
majority in principal amount of all the then outstanding Securities affected may
direct in writing the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on it not relating to or arising under such an Event of Default. However, the
Trustee may refuse to follow any direction that conflicts with applicable law or
this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of other Holders, or that may involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion from Holders directing the Trustee against all
losses and expenses caused by taking or not taking such action.

SECTION 6.06      Limitations on Suits.

            Subject to Section 6.07 hereof, a Holder of a Security of any series
may pursue a remedy with respect to this Indenture or the Securities of such
series only if:

            (1)   the Holder gives to the Trustee written notice of a continuing
      Event of Default with respect to such series;

            (2)   the Holders of at least 25% in principal amount of the then
      outstanding Securities of such series make a written request to the
      Trustee to pursue the remedy;

            (3)   such Holder or Holders offer to the Trustee indemnity
      satisfactory to the Trustee against any loss, liability or expense;

            (4)   the Trustee does not comply with the request within 60 days
      after receipt of the request and the offer of indemnity; and

                                       31
<PAGE>

            (5)   during such 60-day period the Holders of a majority in
      principal amount of the Securities of that series do not give the Trustee
      a direction inconsistent with the request.

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

SECTION 6.07      Rights of Holders to Receive Payment.

            Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal of and premium, if any,
and interest on and any Additional Amounts with respect to the Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.

SECTION 6.08      Collection Suit by Trustee.

            If an Event of Default specified in clause (1) or (2) of Section
6.01 hereof occurs and is continuing, the Trustee is authorized to recover
judgment in its own name and as trustee of an express trust against the
Partnership or the Guarantor for the amount of principal, premium (if any),
interest and any Additional Amounts remaining unpaid on the Securities of the
series affected by the Event of Default, and interest on overdue principal and
premium, if any, and, to the extent lawful, interest on overdue interest, and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

SECTION 6.09      Trustee May File Proofs of Claim.

            The Trustee is authorized to file such proofs of claim and other
papers or documents and to take such actions, including participating as a
member, voting or otherwise, of any committee of creditors, as may be necessary
or advisable to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Partnership or the Guarantor or their respective creditors or
properties and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any Bankruptcy Custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07. To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties which the Holders of the Securities may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization

                                       32
<PAGE>

or arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

SECTION 6.10      Priorities.

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

            First: to the Trustee for amounts due under Section 7.07;

            Second: to Holders for amounts due and unpaid on the Securities in
      respect of which or for the benefit of which such money has been
      collected, for principal, premium (if any), interest and any Additional
      Amounts ratably, without preference or priority of any kind, according to
      the amounts due and payable on such Securities for principal, premium (if
      any), interest and any Additional Amounts, respectively; and

            Third: to the Partnership.

            The Trustee, upon prior written notice to the Partnership, may fix
record dates and payment dates for any payment to Holders pursuant to this
Article VI.

            To the fullest extent allowed under applicable law, if for the
purpose of obtaining a judgment against the Partnership or the Guarantor in any
court it is necessary to convert the sum due in respect of the principal of,
premium (if any) or interest on or Additional Amounts with respect to 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 Business Day in The City of New York next preceding
that on which final judgment is given. Neither the Partnership, the Guarantor
nor the Trustee shall be liable for any shortfall nor shall it benefit from any
windfall in payments to Holders of Securities under this Section 6.10 caused by
a change in exchange rates between the time the amount of a judgment against it
is calculated as above and the time the Trustee converts the Judgment Currency
into the Required Currency to make payments under this Section 6.10 to Holders
of Securities, but payment of such judgment shall discharge all amounts owed by
the Partnership and the Guarantor on the claim or claims underlying such
judgment.

SECTION 6.11      Undertaking for Costs.

            In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a

                                       33
<PAGE>

suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a
Holder or Holders of more than 10% in principal amount of the then outstanding
Securities of any series.

                                   ARTICLE VII
                                     TRUSTEE

SECTION 7.01      Duties of Trustee.

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

            (b)   Except during the continuance of an Event of Default with
respect to the Securities of any series:

            (1)   the Trustee need perform only those duties that are
      specifically set forth in this Indenture and no others, and no implied
      covenants or obligations shall be read into this Indenture against the
      Trustee; and

            (2)   in the absence of bad faith on its part, the Trustee may
      conclusively rely, as to the truth of the statements and the correctness
      of the opinions expressed therein, upon certificates or opinions furnished
      to the Trustee and conforming to the requirements of this Indenture.
      However, the Trustee shall examine such certificates and opinions to
      determine whether, on their face, they appear to conform to the
      requirements of this Indenture.

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

            (1)   this paragraph does not limit the effect of Section 7.01(b);

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

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

            (d)   Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to the
provisions of this Section 7.01.

            (e)   No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee may refuse to
perform any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.

                                       34
<PAGE>

            (f)   The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Partnership
and the Guarantor. Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law. All money received by the
Trustee shall, until applied as herein provided, be held in trust for the
payment of the principal of, premium (if any) and interest on and Additional
Amounts with respect to the Securities.

SECTION 7.02      Rights of Trustee.

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

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

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

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

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

            (f)   The Trustee shall not be obligated to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document.

            (g)   The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder.

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

                                       35
<PAGE>

SECTION 7.03      May Hold Securities.

            The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Partnership and
the Guarantor, or any of their respective Affiliates with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights
and duties. However, the Trustee is subject to Sections 7.10 and 7.11.

SECTION 7.04      Trustee's Disclaimer.

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

SECTION 7.05      Notice of Defaults.

            If a Default or Event of Default with respect to the Securities of
any series occurs and is continuing and it is known to the Trustee, the Trustee
shall mail to Holders of Securities of such series a notice of the Default or
Event of Default within 90 days after it occurs. Except in the case of a Default
or Event of Default in payment of principal of, premium (if any) and interest on
and Additional Amounts or any sinking fund installment with respect to the
Securities of such series, the Trustee may withhold the notice if and so long as
a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Holders of Securities of such
series.

SECTION 7.06      Reports by Trustee to Holders.

            Within 60 days after each September 15 of each year after the
execution of this Indenture, the Trustee shall mail to Holders of a series, the
Guarantor and the Partnership a brief report dated as of such reporting date
that complies with TIA Section 313(a); provided, however, that if no event
described in TIA Section 313(a) has occurred within the twelve months preceding
the reporting date with respect to a series, no report need be transmitted to
Holders of such series. The Trustee also shall comply with TIA Section 313(b).
The Trustee shall also transmit by mail all reports if and as required by TIA
Sections. 313(c) and 313(d).

            A copy of each report at the time of its mailing to Holders of a
series of Securities shall be filed by the Partnership or the Guarantor with the
SEC and each securities exchange, if any, on which the Securities of such series
are listed. The Partnership shall notify the Trustee if and when any series of
Securities is listed on any securities exchange.

SECTION 7.07      Compensation and Indemnity.

            The Partnership agrees to pay to the Trustee for its acceptance of
this Indenture and services hereunder such compensation as the Partnership and
the Trustee shall from time to

                                       36
<PAGE>

time agree in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Partnership agrees to
reimburse the Trustee upon request for all reasonable disbursements, advances
and expenses incurred by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.

            The Partnership hereby indemnifies the Trustee and any predecessor
Trustee against any and all loss, liability, damage, claim or expense, including
taxes (other than taxes based upon, measured by or determined by the income of
the Trustee), incurred by it arising out of or in connection with the acceptance
or administration of its duties under this Indenture, except as set forth in the
next following paragraph. The Trustee shall notify the Partnership and the
Guarantor promptly of any claim for which it may seek indemnity. The Partnership
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Partnership shall pay the reasonable
fees and expenses of such counsel. The Partnership need not pay for any
settlement made without its consent.

            The Partnership shall not be obligated to reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through the
Trustee's negligence or bad faith.

            To secure the payment obligations of the Partnership in this Section
7.07, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
principal of, premium (if any) and interest on and any Additional Amounts with
respect to Securities of any series. Such lien and the Partnership's obligations
under this Section 7.07 shall survive the satisfaction and discharge of this
Indenture.

            When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

SECTION 7.08      Replacement of Trustee.

            A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.

            The Trustee may resign and be discharged at any time with respect to
the Securities of one or more series by so notifying the Partnership and the
Guarantor. The Holders of a majority in principal amount of the then outstanding
Securities of any series may remove the Trustee with respect to the Securities
of such series by so notifying the Trustee, the Partnership and the Guarantor.
The Partnership may remove the Trustee if:

            (1)   the Trustee fails to comply with Section 7.10;

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

            (3)   a Bankruptcy Custodian or public officer takes charge of the
      Trustee or its property; or

                                       37
<PAGE>

            (4)   the Trustee otherwise becomes incapable of acting.

            If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Securities of one or more
series, the Partnership shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series). Within one
year after the successor Trustee with respect to the Securities of any series
takes office, the Holders of a majority in principal amount of the Securities of
such series then outstanding may appoint a successor Trustee to replace the
successor Trustee appointed by the Partnership.

            If a successor Trustee with respect to the Securities of any series
does not take office within 30 days after the retiring or removed Trustee
resigns or is removed, the retiring or removed Trustee (at the expense of the
Partnership), the Partnership, the Guarantor or the Holders of at least 10% in
principal amount of the then outstanding Securities of such series may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.

            If the Trustee with respect to the Securities of a series fails to
comply with Section 7.10, any Holder of Securities of such series may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee with respect to the Securities of such
series.

            In case of the appointment of a successor Trustee with respect to
all Securities, each such successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee, to the Partnership and to the
Guarantor. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the retiring Trustee under this Indenture. The successor Trustee
shall mail a notice of its succession to Holders. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.07.

            In case of the appointment of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Partnership and the
Guarantor, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more (but not all) series shall execute and deliver an
indenture supplemental hereto in which each successor Trustee shall accept such
appointment and that (1) shall confer to each successor Trustee all the rights,
powers and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
confirm that all the rights, powers and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee. Nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust, and each
such Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee. Upon
the execution and delivery of such supplemental indenture, the

                                       38
<PAGE>

resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee shall have all the
rights, powers and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates. On request of the Partnership or any successor Trustee, such retiring
Trustee shall transfer to such successor Trustee all property held by such
retiring Trustee as Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates. Such retiring
Trustee shall, however, have the right to deduct its unpaid fees and expenses,
including attorneys' fees.

            Notwithstanding replacement of the Trustee or Trustees pursuant to
this Section 7.08, the obligations of the Partnership under Section 7.07 shall
continue for the benefit of the retiring Trustee or Trustees.

SECTION 7.09      Successor Trustee by Merger, etc.

            Subject to Section 7.10, if the Trustee consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor Trustee; provided, however, that in the case of a
transfer of all or substantially all of its corporate trust business to another
corporation, the transferee corporation expressly assumes all of the Trustee's
liabilities hereunder.

            In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated; and in case at that time any of the
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Securities or
in this Indenture provided that the certificate of the Trustee shall have.

SECTION 7.10      Eligibility; Disqualification.

            There shall at all times be a Trustee hereunder which shall be a
corporation or banking association organized and doing business under the laws
of the United States, any State thereof or the District of Columbia and
authorized under such laws to exercise corporate trust power, shall be subject
to supervision or examination by federal or state (or the District of Columbia)
authority and shall have, or be a subsidiary of a bank or bank holding company
having, a combined capital and surplus of at least $50 million as set forth in
its most recent published annual report of condition.

            The Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is
subject to and shall comply with the provisions of TIA Section 310(b) during the
period of time required by this Indenture. Nothing in this Indenture shall
prevent the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b).

                                       39
<PAGE>

SECTION 7.11      Preferential Collection of Claims Against the Partnership or
                  the Guarantor.

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

                                  ARTICLE VIII
                             DISCHARGE OF INDENTURE

SECTION 8.01      Termination of the Partnership's and the Guarantor's
                  Obligations.

            (a)   This Indenture shall cease to be of further effect with
respect to the Securities of a series (except that the Partnership's obligations
under Section 7.07, the Trustee's and Paying Agent's obligations under Section
8.03 and the rights, powers, protections and privileges accorded the Trustee
under Article VII shall survive), and the Trustee and the Guarantor, on demand
of the Partnership, shall execute proper instruments acknowledging the
satisfaction and discharge of this Indenture with respect to the Securities of
such series, when:

            (1)   either:

                  (A)   all outstanding Securities of such series theretofore
            authenticated and issued (other than destroyed, lost or stolen
            Securities that have been replaced or paid) have been delivered to
            the Trustee for cancellation; or

                  (B)   all outstanding Securities of such series not
            theretofore delivered to the Trustee for cancellation:

                        (i)   have become due and payable, or

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

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

            and, in the case of clause (i), (ii) or (iii) above, the Partnership
            or the Guarantor has irrevocably deposited or caused to be deposited
            with the Trustee as funds (immediately available to the Holders in
            the case of clause (i)) in trust for such purpose (x) cash in an
            amount, or (y) Government Obligations, maturing as to principal and
            interest at such times and in such amounts as will ensure the
            availability of cash in an amount or (z) a combination thereof,
            which will be sufficient, in the opinion (in the case of clauses (y)
            and (z)) of a nationally recognized firm of independent public
            accountants expressed in a written certification thereof delivered
            to the Trustee, to pay and discharge the entire indebtedness on the
            Securities of such series for principal and interest to the date

                                       40
<PAGE>

            of such deposit (in the case of Securities which have become due and
            payable) or for principal, premium, if any, and interest to the
            Stated Maturity or Redemption Date, as the case may be; or

                  (C)   the Partnership and the Guarantor have properly
            fulfilled such other means of satisfaction and discharge as is
            specified, as contemplated by Section 2.01, to be applicable to the
            Securities of such series;

            (2)   the Partnership and the Guarantor have paid or caused to be
      paid all other sums payable by them hereunder with respect to the
      Securities of such series; and

            (3)   the Partnership has delivered to the Trustee an Officers'
      Certificate stating that all conditions precedent to satisfaction and
      discharge of this Indenture with respect to the Securities of such series
      have been complied with, together with an Opinion of Counsel to the same
      effect.

            (b)   Unless this Section 8.01(b) is specified as not being
applicable to Securities of a series as contemplated by Section 2.01, the
Partnership may, at its option, terminate certain of its and the Guarantor's
respective obligations under this Indenture ("covenant defeasance") with respect
to the Securities of a series if:

            (1)   the Partnership or the Guarantor has irrevocably deposited or
      caused to be irrevocably 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 Securities of such series, (i) money in the currency in which payment
      of the Securities of such series is to be made in an amount, or (ii)
      Government Obligations with respect to such series, maturing as to
      principal and interest at such times and in such amounts as will ensure
      the availability of money in the currency in which payment of the
      Securities of such series is to be made in an amount or (iii) a
      combination thereof, that is sufficient, in the opinion (in the case of
      clauses (ii) and (iii)) of a nationally recognized firm of independent
      public accountants expressed in a written certification thereof delivered
      to the Trustee, to pay the principal of and premium (if any) and interest
      on all Securities of such series on each date that such principal, premium
      (if any) or interest is due and payable and (at the Stated Maturity
      thereof or upon redemption as provided in Section 8.01(e)) to pay all
      other sums payable by it hereunder; provided that the Trustee shall have
      been irrevocably instructed to apply such money and/or the proceeds of
      such Government Obligations to the payment of said principal, premium (if
      any) and interest with respect to the Securities of such series as the
      same shall become due;

            (2)   the Partnership has delivered to the Trustee an Officers'
      Certificate stating that all conditions precedent to satisfaction and
      discharge of this Indenture with respect to the Securities of such series
      have been complied with, and an Opinion of Counsel to the same effect;

            (3)   no Default or Event of Default with respect to the Securities
      of such series shall have occurred and be continuing on the date of such
      deposit;

                                       41
<PAGE>

            (4)   the Partnership shall have delivered to the Trustee an Opinion
      of Counsel from a nationally recognized counsel acceptable to the Trustee
      or a tax ruling to the effect that the Holders will not recognize income,
      gain or loss for U.S. Federal income tax purposes as a result of the
      Partnership's exercise of its option under this Section 8.01(b) and will
      be subject to U.S. 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 option
      had not been exercised;

            (5)   the Partnership and the Guarantor have complied with any
      additional conditions specified pursuant to Section 2.01 to be applicable
      to the discharge of Securities of such series pursuant to this Section
      8.01; and

            (6)   such deposit and discharge shall not cause the Trustee to have
      a conflicting interest as defined in TIA Section 310(b).

            In such event, this Indenture shall cease to be of further effect
(except as set forth in this paragraph), and the Trustee and the Guarantor, on
demand of the Partnership, shall execute proper instruments acknowledging
satisfaction and discharge under this Indenture. However, the Partnership's and
the Guarantor's respective obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09,
4.01, 4.02, 7.07, 7.08, 8.04 and 11.01, the Trustee's and Paying Agent's
obligations in Section 8.03 and the rights, powers, protections and privileges
accorded the Trustee under Article VII shall survive until all Securities of
such series are no longer outstanding. Thereafter, only the Partnership's
obligations in Section 7.07 and the Trustee's and Paying Agent's obligations in
Section 8.03 shall survive with respect to Securities of such series.

            After such irrevocable deposit made pursuant to this Section 8.01(b)
and satisfaction of the other conditions set forth herein, the Trustee upon
request shall acknowledge in writing the discharge of the Partnership's and the
Guarantor's obligations under this Indenture with respect to the Securities of
such series except for those surviving obligations specified above.

            In order to have money available on a payment date to pay principal
of or premium (if any) or interest on the Securities, the Government Obligations
shall be payable as to principal or interest on or before such payment date in
such amounts as will provide the necessary money. Government Obligations shall
not be callable at the issuer's option.

            (c)   If the Partnership and the Guarantor have previously complied
or are concurrently complying with Section 8.01(b) (other than any additional
conditions specified pursuant to Section 2.01 that are expressly applicable only
to covenant defeasance) with respect to Securities of a series, then, unless
this Section 8.01(c) is specified as not being applicable to Securities of such
series as contemplated by Section 2.01, the Partnership may elect its and the
Guarantor's respective obligations to make payments with respect to Securities
of such series be discharged ("legal defeasance"), if:

            (1)   no Default or Event of Default under clauses (5) and (6) of
      Section 6.01 hereof shall have occurred at any time during the period
      ending on the 91st day after the

                                       42
<PAGE>

      date of deposit contemplated by Section 8.01(b) (it being understood that
      this condition shall not be deemed satisfied until the expiration of such
      period);

            (2)   unless otherwise specified with respect to Securities of such
      series as contemplated by Section 2.01, the Partnership has delivered to
      the Trustee an Opinion of Counsel from a nationally recognized counsel
      acceptable to the Trustee to the effect referred to in Section 8.01(b)(4)
      with respect to such legal defeasance, which opinion is based on (i) a
      private ruling of the Internal Revenue Service addressed to the
      Partnership, (ii) a published ruling of the Internal Revenue Service
      pertaining to a comparable form of transaction or (iii) a change in the
      applicable federal income tax law (including regulations) after the date
      of this Indenture;

            (3)   the Partnership and the Guarantor have complied with any other
      conditions specified pursuant to Section 2.01 to be applicable to the
      legal defeasance of Securities of such series pursuant to this Section
      8.01(c); and

            (4)   the Partnership has delivered to the Trustee a Partnership
      Request requesting such legal defeasance of the Securities of such series
      and an Officers' Certificate stating that all conditions precedent with
      respect to such legal defeasance of the Securities of such series have
      been complied with, together with an Opinion of Counsel to the same
      effect.

            In such event, the Partnership and the Guarantor will be discharged
from their respective obligations under this Indenture and the Securities of
such series to pay principal of, premium (if any) and interest on, and any
Additional Amounts with respect to, Securities of such series, the Partnership's
and the Guarantor's respective obligations under Sections 4.01, 4.02 and 11.01
shall terminate with respect to such Securities, and the entire indebtedness of
the Partnership evidenced by such Securities and of the Guarantor evidenced by
the related Guarantee shall be deemed paid and discharged.

            (d)   If and to the extent additional or alternative means of
satisfaction, discharge or defeasance of Securities of a series are specified to
be applicable to such series as contemplated by Section 2.01, each of the
Partnership and the Guarantor may terminate any or all of its obligations under
this Indenture with respect to Securities of a series and any or all of its
obligations under the Securities of such series if it fulfills such other means
of satisfaction and discharge as may be so specified, as contemplated by Section
2.01, to be applicable to the Securities of such series.

            (e)   If Securities of any series subject to subsections (a), (b),
(c) or (d) of this Section 8.01 are to be redeemed prior to their Stated
Maturity, whether pursuant to any optional redemption provisions or in
accordance with any mandatory or optional sinking fund provisions, the terms of
the applicable trust arrangement shall provide for such redemption, and the
Partnership shall make such arrangements as are reasonably satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Partnership.

                                       43
<PAGE>

SECTION 8.02      Application of Trust Money.

            The Trustee or a trustee satisfactory to the Trustee and the
Partnership shall hold in trust money or Government Obligations deposited with
it pursuant to Section 8.01 hereof. It shall apply the deposited money and the
money from Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of, premium (if any) and
interest on and any Additional Amounts with respect to the Securities of the
series with respect to which the deposit was made.

SECTION 8.03      Repayment to Partnership or the Guarantor.

            The Trustee and the Paying Agent shall promptly pay to the
Partnership or the Guarantor any excess money or Government Obligations (or
proceeds therefrom) held by them at any time upon the written request of the
Partnership.

            Subject to the requirements of any applicable abandoned property
laws, the Trustee and the Paying Agent shall pay to the Partnership upon written
request any money held by them for the payment of principal, premium (if any),
interest or any Additional Amounts that remain unclaimed for two years after the
date upon which such payment shall have become due. After payment to the
Partnership, Holders entitled to the money must look to the Partnership for
payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee and the Paying Agent
with respect to such money shall cease.

SECTION 8.04      Reinstatement.

            If the Trustee or the Paying Agent is unable to apply any money or
Government Obligations deposited with respect to Securities of any series in
accordance with Section 8.01 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the obligations of the
Partnership and the Guarantor under this Indenture with respect to the
Securities of such series and under the Securities of such series shall be
revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee or the Paying Agent is permitted to apply
all such money or Government Obligations in accordance with Section 8.01;
provided, however, that if the Partnership or the Guarantor has made any payment
of principal of, premium (if any) or interest on or any Additional Amounts with
respect to any Securities because of the reinstatement of its obligations, the
Partnership and the Guarantor, as the case may be, shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
or Government Obligations held by the Trustee or the Paying Agent.

                                       44
<PAGE>

                                   ARTICLE IX
                     SUPPLEMENTAL INDENTURES AND AMENDMENTS

SECTION 9.01      Without Consent of Holders.

            The Partnership, the Guarantor and the Trustee may amend or
supplement this Indenture or the Securities or waive any provision hereof or
thereof without the consent of any Holder:

            (1)   to cure any ambiguity, omission, defect or inconsistency;

            (2)   to comply with Section 5.01;

            (3)   to provide for uncertificated Securities in addition to or in
      place of certificated Securities, or to provide for the issuance of bearer
      Securities (with or without coupons);

            (4)   to provide any security for, or to add any guarantees of or
      additional obligors on, any series of Securities or the related Guarantee;

            (5)   to comply with any requirement in order to effect or maintain
      the qualification of this Indenture under the TIA;

            (6)   to add to the covenants of the Partnership or the Guarantor
      for the benefit of the Holders of all or any series of Securities (and if
      such covenants are to be for the benefit of less than all series of
      Securities, stating that such covenants are expressly being included
      solely for the benefit of such series), or to surrender any right or power
      herein conferred upon the Partnership or the Guarantor;

            (7)   to add any additional Events of Default with respect to all or
      any series of the Securities (and, if any Event of Default is applicable
      to less than all series of Securities, specifying the series to which such
      Event of Default is applicable);

            (8)   to change or eliminate any of the provisions of this
      Indenture; provided that any such change or elimination shall become
      effective only when there is no outstanding Security of any series created
      prior to the execution of such amendment or supplemental indenture that is
      adversely affected in any material respect by such change in or
      elimination of such provision;

            (9)   to establish the form or terms of Securities of any series as
      permitted by Section 2.01;

            (10)  to supplement any of the provisions of this Indenture to such
      extent as shall be necessary to permit or facilitate the defeasance and
      discharge of any series of Securities pursuant to Section 8.01; provided,
      however, that any such action shall not adversely affect the interest of
      the Holders of Securities of such series or any other series of Securities
      in any material respect; or

                                       45
<PAGE>

            (11)  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 7.08.

            Upon the request of the Partnership, accompanied by a Board
Resolution, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall, subject to Section 9.06, join with the
Partnership and the Guarantor in the execution of any supplemental indenture
authorized or permitted by the terms of this Indenture and make any further
appropriate agreements and stipulations that may be therein contained.

SECTION 9.02      With Consent of Holders.

            Except as provided below in this Section 9.02, the Partnership and
the Guarantor and the Trustee may amend or supplement this Indenture with the
written consent (including consents obtained in connection with a tender offer
or exchange offer for Securities of any one or more series or all series or a
solicitation of consents in respect of Securities of any one or more series or
all series, provided that in each case such offer or solicitation is made to all
Holders of then outstanding Securities of each such series (but the terms of
such offer or solicitation may vary from series to series)) of the Holders of at
least a majority in principal amount of the then outstanding Securities of all
series affected by such amendment or supplement (acting as one class).

            Upon the request of the Partnership, accompanied by a Board
Resolution, and upon the filing with the Trustee of evidence of the consent of
the Holders as aforesaid, and upon receipt by the Trustee of the documents
described in Section 9.06, the Trustee shall, subject to Section 9.06, join with
the Partnership and the Guarantor in the execution of such amendment or
supplemental indenture.

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

            The Holders of a majority in principal amount of the then
outstanding Securities of one or more series or of all series may waive
compliance in a particular instance by the Partnership or the Guarantor with any
provision of this Indenture with respect to Securities of such series (including
waivers obtained in connection with a tender offer or exchange offer for
Securities of such series or a solicitation of consents in respect of Securities
of such series, provided that in each case such offer or solicitation is made to
all Holders of then outstanding Securities of such series (but the terms of such
offer or solicitation may vary from series to series)).

            However, without the consent of each Holder affected, an amendment,
supplement or waiver under this Section 9.02 may not:

            (1)   reduce the amount of Securities whose Holders must consent to
      an amendment, supplement or waiver;

                                       46
<PAGE>

            (2)   reduce the rate of or change the time for payment of interest,
      including default interest, on any Security;

            (3)   reduce the principal of, any premium on or any mandatory
      sinking fund payment with respect to, or change the Stated Maturity of,
      any Security or reduce the amount of the principal of an Original Issue
      Discount Security that would be due and payable upon a declaration of
      acceleration of the Maturity thereof pursuant to Section 6.02;

            (4)   reduce the premium, if any, payable upon the redemption of any
      Security or change the time at which any Security may or shall be
      redeemed;

            (5)   change any obligation of the Partnership or the Guarantor to
      pay Additional Amounts with respect to any Security;

            (6)   change the coin or currency or currencies (including composite
      currencies) in which any Security or any premium, interest or Additional
      Amounts with respect thereto are payable;

            (7)   impair the right to institute suit for the enforcement of any
      payment of principal of, premium (if any) or interest on or any Additional
      Amounts with respect to any Security pursuant to Sections 6.07 and 6.08,
      except as limited by Section 6.06;

            (8)   make any change in the percentage of principal amount of
      Securities necessary to waive compliance with certain provisions of this
      Indenture pursuant to Section 6.04 or 6.07 or make any change in this
      sentence of Section 9.02;

            (9)   modify the provisions of this Indenture with respect to the
      subordination of any Security and any related Guarantee in a manner
      adverse to the Holder thereof;

            (10)  waive a continuing Default or Event of Default in the payment
      of principal of, premium (if any) or interest on or Additional Amounts
      with respect to the Securities; or

            (11)  except as provided in Section 11.04, release the Guarantor or
      modify the Guarantee in any manner adverse to the Holders.

            An amendment under this Section 9.02 may not make any change that
adversely affects the rights under Article X of any holder of an issue of Senior
Indebtedness unless the holders of the issue pursuant to its terms consent to
the change.

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

                                       47
<PAGE>

            The right of any Holder to participate in any consent required or
sought pursuant to any provision of this Indenture (and the obligation of the
Partnership or the Guarantor to obtain any such consent otherwise required from
such Holder) may be subject to the requirement that such Holder shall have been
the Holder of record of any Securities with respect to which such consent is
required or sought as of a date identified by the Partnership or the Guarantor
in a notice furnished to Holders in accordance with the terms of this Indenture.

            After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Partnership shall mail to the Holders of each Security
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Partnership to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such amendment, supplement or waiver.

SECTION 9.03      Compliance with Trust Indenture Act.

            Every amendment or supplement to this Indenture or the Securities
shall comply in form and substance with the TIA as then in effect.

SECTION 9.04      Revocation and Effect of Consents.

            Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his or her Security or portion of a Security if the Trustee
receives written notice of revocation before a date and time therefor identified
by the Partnership or the Guarantor in a notice furnished to such Holder in
accordance with the terms of this Indenture or, if no such date and time shall
be identified, the date the amendment, supplement or waiver becomes effective.
An amendment, supplement or waiver becomes effective in accordance with its
terms and thereafter binds every Holder.

            The Partnership or the Guarantor may, but shall not be obligated to,
fix a record date (which need not comply with TIA Section 316(c)) for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver or to take any other action under this Indenture. If a
record date is fixed, then notwithstanding the provisions of the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
consent to such amendment, supplement or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the principal amount of
Securities required hereunder for such amendment or waiver to be effective shall
have also been given and not revoked within such 90-day period.

            After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it is of the type described in any of clauses (1)
through (9) of Section 9.02 hereof. In such case, the amendment, supplement or
waiver shall bind each Holder who has consented to it and every subsequent
Holder that evidences the same debt as the consenting Holder's Security.

                                       48
<PAGE>

SECTION 9.05      Notation on or Exchange of Securities.

            If an amendment or supplement changes the terms of an outstanding
Security, the Partnership may require the Holder of the Security to deliver it
to the Trustee. The Trustee may place an appropriate notation on the Security at
the request of the Partnership regarding the changed terms and return it to the
Holder. Alternatively, if the Partnership so determines, the Partnership in
exchange for the Security shall issue, the Guarantor shall execute and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment or supplement.

            Securities of any series authenticated and delivered after the
execution of any amendment or supplement may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such amendment or supplement.

SECTION 9.06      Trustee to Sign Amendments, etc.

            The Trustee shall sign any amendment or supplement authorized
pursuant to this Article if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplement, the Trustee shall be entitled to receive, and, subject
to Section 7.01 hereof, shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel provided at the expense of the Partnership
or the Guarantor as conclusive evidence that such amendment or supplement is
authorized or permitted by this Indenture, that it is not inconsistent herewith,
and that it will be valid and binding upon the Partnership and the Guarantor in
accordance with its terms.

                                   ARTICLE X
                    SUBORDINATION OF SECURITIES AND GUARANTEE

SECTION 10.01     Applicability of Article; Agreement To Subordinate.

            The provisions of this Article X shall only be applicable to the
Securities of any series (Securities of such series referred to in this Article
X as "Subordinated Securities") designated, pursuant to Section 2.01, as
subordinated to Senior Indebtedness and any related Guarantee of such
Subordinated Securities. Each Holder by accepting a Subordinated Security agrees
that the Debt evidenced by such Subordinated Security and any related Guarantee
of such Subordinated Security is subordinated in right of payment, to the extent
and in the manner provided in this Article X, to the prior payment of all Senior
Indebtedness and that the subordination is for the benefit of and enforceable by
the holders of Indebtedness. All provisions of this Article X shall be subject
to Section 10.12.

SECTION 10.02     Liquidation, Dissolution, Bankruptcy.

            Upon any payment or distribution of the assets of the Partnership or
the Guarantor, as the case may be, to creditors, upon a liquidation or a
dissolution of the Partnership or the Guarantor, as the case may be, or in a
bankruptcy, reorganization, insolvency, receivership

                                       49
<PAGE>

or similar proceeding relating to the Partnership or the Guarantor, as the case
may be, or their respective property:

            (a)   holders of Senior Indebtedness of the Partnership or the
Guarantor, as the case may be, shall be entitled to receive payment in full in
cash of such Senior Indebtedness of such Person (including interest (if any),
accruing on or after the commencement of a proceeding in bankruptcy, whether or
not allowed as a claim against the Partnership or the Guarantor, as the case may
be, in such bankruptcy proceeding) before Holders of Subordinated Securities and
any related Guarantee shall be entitled to receive any payment of principal of,
or premium, if any, or interest on, the Subordinated Securities from the
Partnership, or any payment in respect of any Guarantee from the Guarantor; and

            (b)   until the Senior Indebtedness of the Partnership and the
Guarantor, as the case may be, is paid in full, any distribution to which
Holders of Subordinated Securities and any related Guarantee would be entitled
but for this Article X shall be made to holders of Senior Indebtedness of the
Partnership or the Guarantor, as the case may be, as their interests may appear,
except that such Holders may receive capital stock and any debt securities that
are subordinated to Senior Indebtedness of the Partnership or the Guarantor, as
the case may be, to at least the same extent as the Subordinated Securities of
the Partnership or the related Guarantee of the Guarantor, respectively.

SECTION 10.03     Default on Senior Indebtedness.

            The Partnership and the Guarantor may not pay the principal of, or
premium, if any, or interest on, the Subordinated Securities or any related
Guarantee or make any deposit pursuant to Article VIII and may not repurchase,
redeem or otherwise retire (except, in the case of Subordinated Securities that
provide for a mandatory sinking fund pursuant to Section 3.11, by the delivery
of Subordinated Securities by the Partnership to the Trustee pursuant to the
first paragraph of Section 3.11) any Subordinated Securities (collectively, "pay
the Subordinated Securities") if any principal, premium or interest in respect
of Senior Indebtedness of such Person is not paid within any applicable grace
period (including at maturity) or any other default on Senior Indebtedness of
such Person occurs and the maturity of such Senior Indebtedness is accelerated
in accordance with its terms unless, in either case, the default has been cured
or waived and any such acceleration has been rescinded or such Senior
Indebtedness has been paid in full in cash; provided, however, that the
Partnership and the Guarantor may make payments on the Subordinated Securities
or any related Guarantee without regard to the foregoing if the Partnership and
the Trustee receive written notice approving such payment from the
Representative of each issue of Designated Senior Indebtedness. During the
continuance of any other default with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods, the
Partnership and the Guarantor may not make payments on the Subordinated
Securities or any related Guarantee for a period (a "Payment Blockage Period")
commencing upon the receipt by the Partnership and the Trustee (and if such
Designated Senior Indebtedness is Debt of the Guarantor) of written notice of
such default from the Representative of any Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period (a "Blockage Notice")
and ending 179 days thereafter (or earlier if such Payment Blockage Period is
terminated by

                                       50
<PAGE>

written notice to the Trustee and the Partnership from the Person or Persons who
gave such Blockage Notice, by repayment in full in cash of such Designated
Senior Indebtedness or because the default giving rise to such Blockage Notice
is no longer continuing). Notwithstanding the provisions described in the
immediately preceding sentence (but subject to the provisions contained in
Section 10.02 and the first sentence of this Section 10.03), unless the holders
of such Designated Senior Indebtedness or the Representative of such holders
shall have accelerated the maturity of such Designated Senior Indebtedness, the
Partnership and the Guarantor may resume payments on the Subordinated Securities
and related Guarantee after such Payment Blockage Period. Not more than one
Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to any number of issues of Designated Senior
Indebtedness during such period, unless otherwise specified pursuant to Section
2.01 for the Subordinated Securities of a series; provided, however, that in no
event may the total number of days during which any Payment Blockage Period or
Periods is in effect exceed 179 days in the aggregate during any 360 consecutive
day period. For purposes of this Section 10.03, no default or event of default
which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or be made, the basis of the commencement
of a subsequent Payment Blockage Period by the Representative of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such default or event of default shall have been cured or waived for a
period of not less than 90 consecutive days.

SECTION 10.04     Acceleration of Payment of Securities.

            If payment of the Subordinated Securities is accelerated because of
an Event of Default, the Partnership shall promptly notify the holders of the
Designated Senior Indebtedness (or their Representatives) of the acceleration.

SECTION 10.05     When Distribution Must Be Paid Over.

            If a distribution is made to Holders of Subordinated Securities or a
related Guarantee that because of this Article X should not have been made to
them, the Holders who receive such distribution shall hold it in trust for
holders of Senior Indebtedness and pay it over to them as their interests may
appear.

SECTION 10.06     Subrogation.

            After all Senior Indebtedness is paid in full and until the
Subordinated Securities are paid in full, Holders thereof shall be subrogated to
the rights of holders of Senior Indebtedness to receive distributions applicable
to Senior Indebtedness. A distribution made under this Article X to holders of
Senior Indebtedness which otherwise would have been made to Holders of
Subordinated Securities is not, as between the Partnership and the Guarantor and
such Holders, a payment by the Partnership and the Guarantor on Senior
Indebtedness.

                                       51
<PAGE>

SECTION 10.07     Relative Rights.

            This Article X defines the relative rights of Holders of
Subordinated Securities and holders of Senior Indebtedness. Nothing in this
Indenture shall:

            (a)   impair, as between the Partnership or the Guarantor and
Holders of either Subordinated Securities or Securities, the obligation of the
Partnership or the Guarantor, which is absolute and unconditional, to pay
principal of, and premium, if any, and interest on, the Subordinated Securities
and the Securities in accordance with their terms; or

            (b)   prevent the Trustee or any Holder of either Subordinated
Securities or Securities from exercising its available remedies upon an Event of
Default, subject to the rights of holders of Senior Indebtedness to receive
distributions otherwise payable to Holders of Subordinated Securities.

SECTION 10.08     Subordination May Not Be Impaired by Partnership.

            No right of any holder of Senior Indebtedness to enforce the
subordination of the Debt evidenced by the Subordinated Securities and the
Guarantee in respect thereof shall be impaired by any act or failure to act by
the Partnership or the Guarantor or by its failure to comply with this
Indenture.

SECTION 10.09     Rights of Trustee and Paying Agent.

            Notwithstanding Sections 10.02 and 10.03, the Trustee or any paying
agent may continue to make payments on Subordinated Securities and shall not be
charged with knowledge of the existence of facts that would prohibit the making
of any such payments unless, not less than two Business Days prior to the date
of such payment, a responsible officer of the Trustee receives notice
satisfactory to it that payments may not be made under this Article X. The
Partnership, the Registrar, any paying agent, a Representative or a holder of
Senior Indebtedness may give the notice; provided, however, that, if an issue of
Senior Indebtedness has a Representative, only the Representative may give the
notice on behalf of the Holders of the Senior Indebtedness of that issue.

            The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and any paying agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article X with respect to
any Senior Indebtedness which may at any time be held by it, to the same extent
as any other holder of Senior Indebtedness; and nothing in Article VII shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
X shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.07.

SECTION 10.10     Distribution or Notice to Representative.

            Whenever a distribution is to be made or a notice given to holders
of Senior Indebtedness, the distribution may be made and the notice given to
their Representative (if any).

                                       52
<PAGE>

SECTION 10.11     Article X Not to Prevent Defaults or Limit Right to
                  Accelerate.

            The failure to make a payment pursuant to the Subordinated
Securities, whether directly or pursuant to the Guarantee, by reason of any
provision in this Article X shall not be construed as preventing the occurrence
of a Default. Nothing in this Article X shall have any effect on the right of
the Holders or the Trustee to accelerate the maturity of either the Subordinated
Securities or the Securities, as the case may be.

SECTION 10.12     Trust Moneys Not Subordinated.

            Notwithstanding anything contained herein to the contrary, payments
from money or the proceeds of U.S. Government Obligations held in trust under
Article VIII by the Trustee for the payment of principal of, and premium, if
any, and interest on, the Subordinated Securities or the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness or subject to the
restrictions set forth in this Article X, and none of the Holders thereof shall
be obligated to pay over any such amount to the Partnership, the Guarantor or
any holder of Senior Indebtedness of the Partnership or the Guarantor or any
other creditor of the Partnership or the Guarantor.

SECTION 10.13     Trustee Entitled to Rely.

            Upon any payment or distribution pursuant to this Article X, the
Trustee and the Holders shall be entitled to rely upon any order or decree of a
court of competent jurisdiction in which any proceedings of the nature referred
to in Section 10.02 are pending, upon a certificate of the liquidating trustee
or agent or other Person making such payment or distribution to the Trustee or
to such Holders or upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other Debt of the Partnership or the Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article X. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness to participate in any payment
or distribution pursuant to this Article X, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article X, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article X.

SECTION 10.14     Trustee to Effectuate Subordination.

            Each Holder by accepting a Subordinated Security authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination between the Holders
of Subordinated Securities and the holders of Senior Indebtedness as provided in
this Article X and appoints the Trustee as attorney-in-fact for any and all such
purposes.

                                       53
<PAGE>

SECTION 10.15     Trustee Not Fiduciary for Holders of Senior Indebtedness.

            The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Holders of Subordinated Securities or
the Partnership or the Guarantor or any other Person, money or assets to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article X
or otherwise.

SECTION 10.16     Reliance by Holders of Senior Indebtedness on Subordination
                  Provisions.

            Each Holder by accepting a Subordinated Security acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Subordinated Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.

                                   ARTICLE XI
                                    GUARANTEE

SECTION 11.01     Unconditional Guarantee.

            (a)   Notwithstanding any provision of this Article XI to the
contrary, the provisions of this Article XI relating to the Guarantor shall be
applicable only to, and inure solely to the benefit of, the Securities of any
series designated, pursuant to Section 2.01 as entitled to the benefits of the
Guarantee of the Guarantor.

            (b)   For value received, the Guarantor hereby fully,
unconditionally and absolutely guarantees (the "Guarantee") to the Holders and
to the Trustee the due and punctual payment of the principal of, and premium, if
any, and interest on the Securities and all other amounts due and payable under
this Indenture and the Securities by the Partnership, when and as such
principal, premium, if any, and interest shall become due and payable, whether
at the stated maturity or by declaration of acceleration, call for redemption or
otherwise, according to the terms of the Securities and this Indenture, subject
to the limitations set forth in Section 11.03 and (ii) in the case of the
Guarantee of the Subordinated Securities, to the subordination provisions
contained in Article X.

            (c)   Failing payment when due of any amount guaranteed pursuant to
the Guarantee, for whatever reason, the Guarantor will be obligated to pay the
same immediately, subject, in the case of the Guarantee of the Subordinated
Securities, to the subordination provisions contained in Article X. The
Guarantee hereunder (other than the Guarantee of Subordinated Securities) is
intended to be a general, unsecured, senior obligation of the Guarantor and will
rank pari passu in right of payment with all Debt of the Guarantor that is not,
by its terms, expressly subordinated in right of payment to the Guarantee. The
Guarantor hereby agrees that its obligations hereunder shall be full,
unconditional and absolute, irrespective of the validity, regularity or
enforceability of the Securities, the Guarantee (including the Guarantee of the
Guarantor) or this Indenture, the absence of any action to enforce the same, any
waiver or

                                       54
<PAGE>

consent by any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against the Partnership or the Guarantor,
or any action to enforce the same or any other circumstances which might
otherwise constitute a legal or equitable discharge or defense of the Guarantor.
The Guarantor hereby agrees that in the event of a default in payment of the
principal of, or premium, if any, or interest on the Securities, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise, legal proceedings may be instituted by the Trustee on behalf of the
Holders or, subject to Section 6.06, by the Holders, on the terms and conditions
set forth in this Indenture, directly against the Guarantor to enforce the
Guarantee without first proceeding against the Partnership.

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

            (e)   The Guarantor hereby (i) waives diligence, presentment, demand
of payment, filing of claims with a court in the event of the merger, insolvency
or bankruptcy of the Partnership or the Guarantor, and all demands whatsoever,
(ii) acknowledges that any agreement, instrument or document evidencing the
Guarantee may be transferred and that the benefit of its obligations hereunder
shall extend to each holder of any agreement, instrument or document

                                       55
<PAGE>

evidencing the Guarantee without notice to it and (iii) covenants that the
Guarantee will not be discharged except by complete performance of the
Guarantee. The Guarantor further agrees that if at any time all or any part of
any payment theretofore applied by any Person to the Guarantee is, or must be,
rescinded or returned for any reason whatsoever, including without limitation,
the insolvency, bankruptcy or reorganization of the Partnership, the Guarantor,
the Guarantee shall, to the extent that such payment is or must be rescinded or
returned, be deemed to have continued in existence notwithstanding such
application, and the Guarantee shall continue to be effective or be reinstated,
as the case may be, as though such application had not been made.

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

SECTION 11.02     Execution and Delivery of Guarantee.

            To further evidence the Guarantee set forth in Section 11.01, the
Guarantor hereby agrees that a notation relating to such Guarantee,
substantially in the form attached hereto as Annex A, shall be endorsed on each
Security entitled to the benefits of the Guarantee authenticated and delivered
by the Trustee and executed by either manual or facsimile signature of an
Officer of the General Partner. The Guarantor hereby agrees that the Guarantee
set forth in Section 11.01 shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation relating to the Guarantee. If
any Officer of the General Partner, whose signature is on this Indenture or a
Security no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, the Guarantee of such Security shall be
valid nevertheless. The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in this Indenture on behalf of the Guarantor.

            The Trustee hereby accepts the trusts in this Indenture upon the
terms and conditions herein set forth.

SECTION 11.03     Limitation on Liability of the Guarantor.

            The Guarantor and by its acceptance hereof each Holder of a Security
entitled to the benefits of the Guarantee hereby confirm that it is the
intention of all such parties that the guarantee by the Guarantor pursuant to
its Guarantee not constitute a fraudulent transfer or conveyance for purposes of
any federal or state law. To effectuate the foregoing intention, the Holders of
a Security entitled to the benefits of the Guarantee and the Guarantor hereby
irrevocably agree that the obligations of the Guarantor under its Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of the Guarantor, result in the obligations of
the Guarantor under the Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law.

                                       56
<PAGE>

SECTION 11.04     Release of Guarantor from Guarantee.

            (a)   Notwithstanding any other provisions of this Indenture, the
Guarantee of the Guarantor may be released upon the terms and subject to the
conditions set forth in this Section 11.04. Provided that no Default shall have
occurred and shall be continuing under this Indenture, any Guarantee incurred by
the Guarantor pursuant to this Article XI shall be unconditionally released and
discharged automatically upon the merger of the Guarantor into the Partnership
or any Subsidiary or the liquidation or dissolution of the Guarantor (in each
case to the extent not prohibited by this Indenture) or (iii) following delivery
of a written notice of such release or discharge by the Partnership, the
Trustee, upon the release or discharge of all guarantees by the Guarantor of any
Debt of the Partnership other than obligations arising under this Indenture and
any Securities issued hereunder, except a discharge or release by or as a result
of payment under such guarantees.

            (b)   The Trustee shall deliver an appropriate instrument evidencing
any release of the Guarantor from the Guarantee upon receipt of a written
request of the Partnership accompanied by an Officers' Certificate and an
Opinion of Counsel that the Guarantor is entitled to such release in accordance
with the provisions of this Indenture. The Guarantor not so released remains
liable for the full amount of principal of (and premium, if any, on) and
interest on the Securities entitled to the benefits of such Guarantee as
provided in this Indenture, subject to the limitations of Section 11.03.

                                   ARTICLE XII
                                  MISCELLANEOUS

SECTION 12.01     Trust Indenture Act Controls.

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

SECTION 12.02     Notices.

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

            If to the Partnership or the Guarantor:

            Martin Operating Partnership L.P.
            4200 Stone Road
            Kilgore, Texas  75662
            Attn: Robert D. Bondurant
            (903) 983-6200
            (903) 983-6262

                                       57
<PAGE>

            If to the Trustee:

            Attn:
            Telephone:
            Facsimile:

            The Partnership, the Guarantor or the Trustee by notice to the
others may designate additional or different addresses for subsequent notices or
communications.

            All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if by facsimile; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

            Any notice or communication to a Holder shall be mailed by
first-class mail, postage prepaid, to the Holder's address shown on the register
kept by the Registrar. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other Holders.

            If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it, except in the case of notice to the Trustee, it is duly given only
when received.

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

            All notices or communications, including without limitation notices
to the Trustee, the Partnership or the Guarantor by Holders, shall be in
writing, except as otherwise set forth herein.

            In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice required by
this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.

SECTION 12.03     Communication by Holders with Other Holders.

            Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Partnership and the Guarantor, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).

SECTION 12.04     Certificate and Opinion as to Conditions Precedent.

            Upon any request or application by the Partnership or the Guarantor
to the Trustee to take any action under this Indenture, the Partnership or the
Guarantor, as the case may be,

                                       58
<PAGE>

shall, if requested by the Trustee, furnish to the Trustee at the expense of the
Partnership or the Guarantor, as the case may be:

            (1)   an Officers' Certificate (which shall include the statements
      set forth in Section 12.05) stating that, in the opinion of the signers,
      all conditions precedent and covenants, if any, provided for in this
      Indenture relating to the proposed action have been complied with; and

            (2)   an Opinion of Counsel (which shall include the statements set
      forth in Section 12.05 hereof) stating that, in the opinion of such
      counsel, all such conditions precedent and covenants have been complied
      with.

SECTION 12.05     Statements Required in Certificate or Opinion.

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

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

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

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

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

SECTION 12.06     Rules by Trustee and Agents.

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

SECTION 12.07     Legal Holidays.

            If a payment date is a Legal Holiday at a Place of Payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.

SECTION 12.08     No Recourse Against Others.

            A director, officer, employee, stockholder, partner or other owner
of the Partnership, the Guarantor or the Trustee, as such, shall not have any
liability for any obligations

                                       59
<PAGE>

of the Partnership under the Securities, for any obligations of the Guarantor
under the Guarantee, or for any obligations of the Partnership, the Guarantor,
or the Trustee under this Indenture or for any claim based on, in respect of or
by reason of such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release shall be
part of the consideration for the issue of Securities.

SECTION 12.09     Governing Law.

            THIS INDENTURE, THE SECURITIES AND THE GUARANTEE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THE
LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

SECTION 12.10     No Adverse Interpretation of Other Agreements.

            This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Partnership, Guarantor or any Subsidiary. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

SECTION 12.11     Successors.

            All agreements of the Partnership and the Guarantor in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.

SECTION 12.12     Severability.

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

SECTION 12.13     Counterpart Originals.

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

SECTION 12.14     Table of Contents, Headings, etc.

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

                                       60
<PAGE>

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

                                        MARTIN OPERATING PARTNERSHIP L.P.

                                        By:    MARTIN OPERATING GP LLC,
                                               Its General Partner

                                        By:    MARTIN MIDSTREAM PARTNERS L.P.,
                                               Its Sole Member

                                        By:    MARTIN MIDSTREAM GP LLC,
                                               Its General Partner

                                        By: ____________________________________
                                               Name:
                                               Title:

                                        MARTIN MIDSTREAM PARTNERS L.P.

                                        By:    MARTIN MIDSTREAM GP LLC,
                                               Its General Partner

                                        By: ____________________________________
                                               Name:
                                               Title:

<PAGE>

                                     ANNEX A

                              NOTATION OF GUARANTEE

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

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

                                        MARTIN MIDSTREAM PARTNERS L.P.

                                        By:    MARTIN MIDSTREAM GP LLC,
                                               Its General Partner

                                        By: ____________________________________
                                               Name:
                                               Title:<PAGE>

                                                                     EXHIBIT 4.1

                                                                [EXECUTION COPY]

                           Encore Acquisition Company

                                     Issuer

                    6.25% Senior Subordinated Notes Due 2014

                                    INDENTURE

                            Dated as of April 2, 2004

                     WELLS FARGO BANK, NATIONAL ASSOCIATION

                                     Trustee

<PAGE>

                              CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
  TIA                                                                                      Indenture
Section                                                                                     Section
-------                                                                                     -------
<S>                                                                                        <C>
  310(a) (1).............................................................................     7.10
     (a) (2).............................................................................     7.10
     (a) (3).............................................................................     N.A.
     (a) (4).............................................................................     N.A.
     (b) ................................................................................     7.08; 7.10
     (c) ................................................................................     N.A.
  311(a) ................................................................................     7.11
     (b) ................................................................................     7.11
     (c) ................................................................................     N.A.
  312(a) ................................................................................     2.05
     (b) ................................................................................     13.03
     (c) ................................................................................     13.03
  313(a) ................................................................................     7.06
     (b) (1).............................................................................     N.A.
     (b) (2).............................................................................     7.06
     (c) ................................................................................     13.02
     (d) ................................................................................     7.06
  314(a) ................................................................................     4.02; 4.11; 13.02
     (b) ................................................................................     N.A.
     (c) (1).............................................................................     13.04
     (c) (2).............................................................................     13.04
     (c) (3).............................................................................     N.A.
     (d) ................................................................................     N.A.
     (e) ................................................................................     13.05
     (f) ................................................................................     N.A.
  315(a) ................................................................................     7.01
     (b) ................................................................................     7.05; 13.02
     (c) ................................................................................     7.01
     (d) ................................................................................     7.01
     (e) ................................................................................     6.11
  316(a) (last sentence).................................................................     13.06
     (a) (1)(A)..........................................................................     6.05
     (a) (1)(B)..........................................................................     6.04
     (a) (2).............................................................................     N.A.
     (b) ................................................................................     6.07
  317(a) (1).............................................................................     6.08
     (a) (2).............................................................................     6.09
     (b) ................................................................................     2.04
  318(a) ................................................................................     13.01
</TABLE>

                           N.A. means Not Applicable.

-----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.

<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                    Page
                                                                                                                    -----
<S>                                                                                                                 <C>
ARTICLE 1 Definitions and Incorporation by Reference                                                                  1
         SECTION 1.01.Definitions................................................................................     1
         SECTION 1.02.Other Definitions..........................................................................    37
         SECTION 1.03.Incorporation by Reference of Trust Indenture Act..........................................    38
         SECTION 1.04.Rules of Construction......................................................................    38

ARTICLE 2 The Securities                                                                                             39
         SECTION 2.01.Form and Dating............................................................................    39
         SECTION 2.02.Execution and Authentication...............................................................    39
         SECTION 2.03.Registrar and Paying Agent.................................................................    40
         SECTION 2.04.Paying Agent To Hold Money in Trust........................................................    40
         SECTION 2.05.Securityholder Lists.......................................................................    40
         SECTION 2.06.Transfer and Exchange......................................................................    41
         SECTION 2.07.Replacement Securities.....................................................................    41
         SECTION 2.08.Outstanding Securities.....................................................................    41
         SECTION 2.09.Temporary Securities.......................................................................    41
         SECTION 2.10.Cancellation...............................................................................    42
         SECTION 2.11.Defaulted Interest.........................................................................    42
         SECTION 2.12.CUSIP Numbers..............................................................................    42
         SECTION 2.13.Issuance of Additional Securities..........................................................    42

ARTICLE 3 Redemption                                                                                                 43
         SECTION 3.01.Notices to Trustee.........................................................................    43
         SECTION 3.02.Selection of Securities To Be Redeemed.....................................................    43
         SECTION 3.03.Notice of Redemption.......................................................................    44
         SECTION 3.04.Effect of Notice of Redemption.............................................................    44
         SECTION 3.05.Deposit of Redemption Price................................................................    44
         SECTION 3.06.Securities Redeemed in Part................................................................    45
         SECTION 3.07.Special Mandatory Redemption...............................................................    45

ARTICLE 4 Covenants                                                                                                  46
         SECTION 4.01.Payment of Securities......................................................................    46
         SECTION 4.02.SEC Reports................................................................................    46
         SECTION 4.03.Limitation on Indebtedness.................................................................    46
         SECTION 4.04.Limitation on Restricted Payments..........................................................    50
         SECTION 4.05.Limitation on Restrictions on Distributions from Restricted Subsidiaries...................    54
         SECTION 4.06.Limitation on Sales of Assets and Subsidiary Stock.........................................    56
         SECTION 4.07.Limitation on Affiliate Transactions.......................................................    60
         SECTION 4.08.Change of Control..........................................................................    62
         SECTION 4.09.Limitation on Liens........................................................................    63
         SECTION 4.10.Future Guarantors..........................................................................    63
         SECTION 4.11.Compliance Certificate.....................................................................    64
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                                                                                                                 <C>
         SECTION 4.12.Further Instruments and Acts...............................................................    64
         SECTION 4.13.Suspension of Covenants....................................................................    64

ARTICLE 5 Successor Company                                                                                          64
         SECTION 5.01.When Company May Merge or Transfer Assets..................................................    64

ARTICLE 6 Defaults and Remedies                                                                                      66
         SECTION 6.01.Events of Default..........................................................................    66
         SECTION 6.02.Acceleration...............................................................................    68
         SECTION 6.03.Other Remedies.............................................................................    69
         SECTION 6.04.Waiver of Past Defaults....................................................................    69
         SECTION 6.05.Control by Majority........................................................................    69
         SECTION 6.06.Limitation on Suits........................................................................    70
         SECTION 6.07.Rights of Holders to Receive Payment.......................................................    70
         SECTION 6.08.Collection Suit by Trustee.................................................................    70
         SECTION 6.09.Trustee May File Proofs of Claim...........................................................    70
         SECTION 6.10.Priorities.................................................................................    71
         SECTION 6.11.Undertaking for Costs......................................................................    71
         SECTION 6.12.Waiver of Stay or Extension Laws...........................................................    71

ARTICLE 7 Trustee                                                                                                    72
         SECTION 7.01.Duties of Trustee..........................................................................    72
         SECTION 7.02.Rights of Trustee..........................................................................    73
         SECTION 7.03.Individual Rights of Trustee...............................................................    73
         SECTION 7.04.Trustee's Disclaimer.......................................................................    73
         SECTION 7.05.Notice of Defaults.........................................................................    74
         SECTION 7.06.Reports by Trustee to Holders..............................................................    74
         SECTION 7.07.Compensation and Indemnity.................................................................    74
         SECTION 7.08.Replacement of Trustee.....................................................................    75
         SECTION 7.09.Successor Trustee by Merger................................................................    76
         SECTION 7.10.Eligibility; Disqualification..............................................................    76
         SECTION 7.11.Preferential Collection of Claims Against Company..........................................    76

ARTICLE 8 Discharge of Indenture; Defeasance                                                                         76
         SECTION 8.01.Discharge of Liability on Securities; Defeasance...........................................    76
         SECTION 8.02.Conditions to Defeasance...................................................................    77
         SECTION 8.03.Application of Trust Money.................................................................    79
         SECTION 8.04.Repayment to Company.......................................................................    79
         SECTION 8.05.Indemnity for Government Obligations.......................................................    79
         SECTION 8.06.Reinstatement..............................................................................    79

ARTICLE 9 Amendments                                                                                                 80
         SECTION 9.01.Without Consent of Holders.................................................................    80
         SECTION 9.02.With Consent of Holders....................................................................    81
         SECTION 9.03.Compliance with Trust Indenture Act........................................................    82
         SECTION 9.04.Revocation and Effect of Consents and Waivers..............................................    82
         SECTION 9.05.Notation on or Exchange of Securities......................................................    82
</TABLE>

                                      -ii-
<PAGE>
<TABLE>
<S>                                                                                                                 <C>
         SECTION 9.06.Trustee To Sign Amendments.................................................................    82
         SECTION 9.07.Payment for Consent........................................................................    83

ARTICLE 10 Subordination                                                                                             83
         SECTION 10.01.        Agreement To Subordinate..........................................................    83
         SECTION 10.02.        Liquidation, Dissolution, Bankruptcy..............................................    83
         SECTION 10.03.        Default on Senior Indebtedness of the Company.....................................    83
         SECTION 10.04.        Acceleration of Payment of Securities.............................................    84
         SECTION 10.05.        When Distribution Must Be Paid Over...............................................    85
         SECTION 10.06.        Subrogation.......................................................................    85
         SECTION 10.07.        Relative Rights...................................................................    85
         SECTION 10.08.        Subordination May Not Be Impaired by Company......................................    85
         SECTION 10.09.        Rights of Trustee and Paying Agent................................................    85
         SECTION 10.10.        Distribution or Notice to Representative..........................................    86
         SECTION 10.11.        Article 10 Not To Prevent Events of Default or Limit Right To Accelerate..........    86
         SECTION 10.12.        Trust Moneys and Escrow Funds Not Subordinated....................................    86
         SECTION 10.13.        Trustee Entitled To Rely..........................................................    86
         SECTION 10.14.        Trustee To Effectuate Subordination...............................................    87
         SECTION 10.15.        Trustee Not Fiduciary for Holders of Senior Indebtedness of the Company...........    87
         SECTION 10.16.        Reliance by Holders of Senior Indebtedness of the Company on Subordination
                               Provisions........................................................................    87

ARTICLE 11 Subsidiary Guaranties                                                                                     87
         SECTION 11.01.        Guaranties........................................................................    87
         SECTION 11.02.        Limitation on Liability...........................................................    89
         SECTION 11.03.        Successors and Assigns............................................................    89
         SECTION 11.04.        No Waiver.........................................................................    89
         SECTION 11.05.        Modification......................................................................    90
         SECTION 11.06.        Release of Subsidiary Guarantor...................................................    90

ARTICLE 12 Subordination of Subsidiary Guaranties                                                                    90
         SECTION 12.01.        Agreement To Subordinate..........................................................    90
         SECTION 12.02.        Liquidation, Dissolution, Bankruptcy..............................................    90
         SECTION 12.03.        Default on Senior Indebtedness of Subsidiary Guarantor............................    91
         SECTION 12.04.        Demand for Payment................................................................    92
         SECTION 12.05.        When Distribution Must Be Paid Over...............................................    92
         SECTION 12.06.        Subrogation.......................................................................    92
         SECTION 12.07.        Relative Rights...................................................................    92
         SECTION 12.08.        Subordination May Not Be Impaired by Company......................................    93
         SECTION 12.09.        Rights of Trustee and Paying Agent................................................    93
         SECTION 12.10.        Distribution or Notice to Representative..........................................    93
         SECTION 12.11.        Article 12 Not To Prevent Events of Default or Limit Right To Demand Payment......    93
         SECTION 12.12.        Trustee Entitled To Rely..........................................................    93
         SECTION 12.13.        Trustee To Effectuate Subordination...............................................    94
</TABLE>

                                      -iii-
<PAGE>

<TABLE>
<S>                                                                                                                 <C>
         SECTION 12.14.        Trustee Not Fiduciary for Holders  of Senior Indebtedness of Subsidiary Guarantor.    94
         SECTION 12.15.        Reliance by Holders of Senior Indebtedness of Subsidiary Guarantors on
                               Subordination Provisions..........................................................    94

ARTICLE 13 Miscellaneous                                                                                             95
         SECTION 13.01.        Trust Indenture Act Controls......................................................    95
         SECTION 13.02.        Notices...........................................................................    95
         SECTION 13.03.        Communication by Holders with Other Holders.......................................    95
         SECTION 13.04.        Certificate and Opinion as to Conditions Precedent................................    96
         SECTION 13.05.        Statements Required in Certificate or Opinion.....................................    96
         SECTION 13.06.        When Securities Disregarded.......................................................    96
         SECTION 13.07.        Rules by Trustee, Paying Agent and Registrar......................................    97
         SECTION 13.08.        Legal Holidays....................................................................    97
         SECTION 13.09.        Governing Law.....................................................................    97
         SECTION 13.10.        No Recourse Against Others........................................................    97
         SECTION 13.11.        Successors........................................................................    97
         SECTION 13.12.        Multiple Originals................................................................    97
         SECTION 13.13.        Table of Contents; Headings.......................................................    97

</TABLE>

Rule 144A/Regulation S Appendix

Exhibit 1 - Form of Initial Security

Exhibit A - Form of Exchange Security or Private Exchange  Security

                                      -iv-

<PAGE>

            INDENTURE dated as of April 2, 2004, among ENCORE ACQUISITION
COMPANY, a Delaware corporation (the "Company"), the guarantors listed on the
signature pages hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
(the "Trustee").

            Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Company's Initial
Securities, Exchange Securities and Private Exchange Securities (collectively,
the "Securities"):

                                   ARTICLE 1

                   Definitions and Incorporation by Reference

            SECTION 1.01. Definitions.

            "Additional Assets" means (1) any property, plant or equipment used
in a Related Business; (2) the Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by
the Company or another Restricted Subsidiary; or (3) Capital Stock constituting
a minority interest in any Person that at such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clause (2)
or (3) above is primarily engaged in a Related Business.

            "Additional Securities" means, subject to the Company's compliance
with Section 4.03, 6.25% Senior Subordinated Notes Due 2014 issued from time to
time after the Issue Date under the terms of this Indenture (other than pursuant
to Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other than Exchange
Securities or Private Exchange Securities issued pursuant to an exchange offer
for other Securities outstanding under this Indenture).

            "Adjusted Consolidated Net Tangible Assets" or "ACNTA" means
(without duplication), as of the date of determination:

            (a)   the sum of:

            (1)   discounted future net revenue from proved crude oil and
      natural gas reserves of the Company and its Restricted Subsidiaries
      (including oil and natural gas reserves attributable to the net profits
      interests owned by an Oil and Gas Royalty Trust to the extent such net
      profit interests are attributable to the Company or a Restricted
      Subsidiary by virtue of its ownership of Capital Stock of such Oil and Gas
      Royalty Trust) calculated in accordance with SEC guidelines before any
      state or federal income taxes, as estimated in a reserve report prepared
      as of the end of the most recently completed fiscal year for which audited
      financial statements are available, which reserve report is prepared or
      audited by independent petroleum engineers, as increased by, as of the
      date of determination, the discounted future net revenue calculated in
      accordance with SEC guidelines (utilizing the prices utilized in such year
      end reserve report) of:

                  (A)   estimated proved crude oil and natural gas reserves of
                        the Company and its Restricted Subsidiaries attributable
                        to

<PAGE>

                        acquisitions consummated since the date of such reserve
                        report, and

                  (B)   estimated crude oil and natural gas reserves of the
                        Company and its Restricted Subsidiaries attributable to
                        extensions, discoveries and other additions and upward
                        determinations of estimates of proved crude oil and
                        natural gas reserves (including previously estimated
                        development costs incurred during the period and the
                        accretion of discount since the prior period end) due to
                        exploration, development or exploitation, production or
                        other activities which reserves were not reflected in
                        such reserve report which would, in the case of
                        determinations made under clauses (A) or (B), in
                        accordance with standard industry practice, result in
                        such determinations,

            and decreased by, as of the date of determination, the discounted
            future net revenue calculated in accordance with SEC guidelines
            (utilizing the prices utilized in such year end reserve report)
            attributable to:

                  (C)   estimated proved crude oil and natural gas reserves of
                        the Company and its Restricted Subsidiaries reflected in
                        such reserve report produced or disposed of since the
                        date of such reserve report, and

                  (D)   reductions in the estimated oil and natural gas reserves
                        of the Company and its Restricted Subsidiaries reflected
                        in such reserve report since the date of such reserve
                        report attributable to downward determinations of
                        estimates of proved crude oil and natural gas reserves
                        due to exploration, development or exploitation,
                        production or other activities conducted or otherwise
                        occurring since the date of such reserve report which
                        would, in the case of determinations made under clauses
                        (C) or (D), in accordance with standard industry
                        practice, result in such determinations;

            provided, however, that, in the case of each of the determinations
            made pursuant to clauses (A) through (D), such increases and
            decreases shall be estimated by the Company's engineers, except that
            if as a result of such acquisitions, dispositions, discoveries,
            extensions or revisions, there is a Material Change, then such
            increases and decreases in the discounted future net revenue shall
            be confirmed in writing by an independent petroleum engineer;

            (2)   the capitalized costs that are attributable to crude oil and
      natural gas properties of the Company and its Restricted Subsidiaries to
      which no proved crude oil and natural gas reserves are attributed, based
      on the Company's books and records as of a date no earlier than the end of
      the most recent fiscal quarter for which financial

                                      -2-

<PAGE>

      statements of the Company have been made publicly available prior to the
      date of determination;

            (3)   the Net Working Capital as of the end of the most recent
      fiscal quarter for which financial statements of the Company have been
      made publicly available prior to the date of determination; and

            (4)   the greater of (i) the net book value as of a date no earlier
      than the end of the most recent fiscal quarter for which financial
      statements of the Company have been made publicly available prior to the
      date of determination and (ii) the appraised value, as estimated by
      independent appraisers, of other tangible assets of the Company and its
      Restricted Subsidiaries as of a date no earlier than the most recent
      fiscal year for which financial statements of the Company have been made
      publicly available prior to the date of determination (provided that the
      Company shall not be required to obtain such an appraisal of such assets
      if no such appraisal has been performed); minus

            (b)   to the extent not otherwise taken into account in the
immediately preceding clause (a), the sum of:

            (1)   minority interests;

            (2)   any natural gas balancing liabilities of the Company and its
      Restricted Subsidiaries reflected in the Company's latest audited
      consolidated financial statements;

            (3)   the discounted future net revenue, calculated in accordance
      with SEC guidelines (utilizing the same prices utilized in the Company's
      year-end reserve report), attributable to reserves subject to
      participation interests, overriding royalty interests or other interests
      of third parties, pursuant to participation, partnership, vendor financing
      or other agreements then in effect, or which otherwise are required to be
      delivered to third parties;

            (4)   the discounted future net revenue calculated in accordance
      with SEC guidelines (utilizing the same prices utilized in the Company's
      year-end reserve report), attributable to reserves that are required to be
      delivered to third parties to fully satisfy the obligations of the Company
      and its Restricted Subsidiaries with respect to Volumetric Production
      Payments on the schedules specified with respect thereto; and

            (5)   the discounted future net revenue, calculated in accordance
      with SEC guidelines, attributable to reserves subject to
      Dollar-Denominated Production Payments that, based on the estimates of
      production included in determining the discounted future net revenue
      specified in the immediately preceding clause (a)(1) (utilizing the same
      prices utilized in the Company's year-end reserve report), would be
      necessary to satisfy fully the obligations of the Company and its
      Restricted Subsidiaries with respect to Dollar-Denominated Production
      Payments on the schedules specified with respect thereto.

                                      -3-
<PAGE>

            If the Company changes its method of accounting from the successful
efforts method to the full cost method or a similar method of accounting,
"ACNTA" will continue to be calculated as if the Company were still using the
successful efforts method of accounting.

            "Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 10% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof. No Person shall be deemed an
Affiliate of an Oil and Gas Royalty Trust solely by virtue of ownership of
Capital Stock of such trust.

            "Applicable Premium" means, with respect to a Security at any time,
the greater of (1) 1.0% of the principal amount of such Security at such time
and (2) the excess, if any, of (A) the present value at such time of (i) the
principal amount of such Security plus (ii) any required interest payments due
on such Security through April 15, 2009, computed using a discount rate equal to
the Treasury Rate plus 50 basis points, over (B) the principal amount of such
Security.

            "Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary or any Oil and Gas Royalty Trust, the
Capital Stock of which is owned by the Company or a Restricted Subsidiary,
including any disposition by means of a merger, consolidation or similar
transaction (each referred to for the purposes of this definition as a
"disposition"), of:

            (1)   any shares of Capital Stock of a Restricted Subsidiary (other
                  than directors' qualifying shares or shares required by
                  applicable law to be held by a Person other than the Company
                  or a Restricted Subsidiary) or of an Oil and Gas Royalty
                  Trust;

            (2)   all or substantially all the assets of any division or line of
                  business of the Company or any Restricted Subsidiary;

            (3)   any other assets of the Company or any Restricted Subsidiary
                  outside of the ordinary course of business of the Company or
                  such Restricted Subsidiary; or

            (4)   any net profit interests held by any such Oil and Gas Royalty
                  Trust

other than, in the case of clauses (1), (2) and (3) above,

                  (A)   a disposition by a Restricted Subsidiary to the Company
                        or by the Company or a Restricted Subsidiary to a
                        Restricted Subsidiary;

                                      -4-
<PAGE>

                  (B)   for purposes of Section 4.06 only, (x) a disposition
                        that constitutes a Restricted Payment permitted by
                        Section 4.04 or a Permitted Investment and (y) a
                        disposition of all or substantially all the assets of
                        the Company in accordance with Section 5.01; and

                  (C)   the trade or exchange by the Company or any Restricted
                        Subsidiary of any oil or natural gas property or
                        interest therein of the Company or such Restricted
                        Subsidiary for any oil or natural gas property or
                        interest therein of another Person, including any cash
                        or cash equivalents necessary in order to achieve an
                        exchange of equivalent value; provided, however, that
                        the value of the oil or natural gas property or interest
                        therein received by the Company or any Restricted
                        Subsidiary in such trade or exchange (including any cash
                        or cash equivalents) is at least equal to the fair
                        market value (as determined in good faith by the Board
                        of Directors, an Officer or an officer of such
                        Restricted Subsidiary with responsibility for such
                        transaction, which determination shall be conclusive
                        evidence of compliance with this provision) of the oil
                        or natural gas property or interest therein (including
                        any cash or cash equivalents) so traded or exchanged;

                  (D)   the creation of a Lien;

                  (E)   a disposition of oil and natural gas properties in
                        connection with tax credit transactions complying with
                        Section 29 or any successor or analogous provisions of
                        the Code;

                  (F)   a disposition of the Capital Stock of or any Investment
                        in any Unrestricted Subsidiary other than an Oil and Gas
                        Royalty Trust;

                  (G)   surrender or waiver of contract rights or the
                        settlement, release or surrender of contract, tort or
                        other claims of any kind;

                  (H)   any disposition of defaulted receivables that arose in
                        the ordinary course of business for collection;

                  (I)   the contribution of net profits interests in oil and
                        natural gas properties to an Oil and Gas Royalty Trust
                        that is wholly owned by the Company or a Restricted
                        Subsidiary at the time or as the result of such
                        contribution;

                  (J)   Production Payments and Reserve Sales in connection with
                        the acquisition of any crude oil and natural gas
                        property after the Issue Date; provided that any such
                        Production Payment and Reserve Sale is created,
                        incurred, issued or assumed in connection with the
                        financing of, and within 30 days after the acquisition
                        of, such oil and natural gas property;

                                      -5-
<PAGE>

                  (K)   the sale or transfer (whether or not in the ordinary
                        course of business) of any oil and gas property or
                        interest therein to which no proved reserves are
                        attributable at the time of such sale or transfer; and

                  (L)   a single transaction or series of related transactions
                        that involve the disposition of assets with a fair
                        market value of less than $2.0 million.

            "Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded semiannually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended); provided, however, that if such
Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of
Indebtedness represented thereby will be determined in accordance with the
definition of "Capital Lease Obligation" in this Section 1.01.

            "Average Life" means, as of the date of determination, with respect
to any Indebtedness, the quotient obtained by dividing (1) the sum of the
products of the numbers of years from the date of determination to the dates of
each successive scheduled principal payment of or redemption or similar payment
with respect to such Indebtedness multiplied by the amount of such payment by
(2) the sum of all such payments.

            "Bank Indebtedness" means all Obligations pursuant to the Credit
Facilities.

            "Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.

            "Business Day" means each day which is not a Legal Holiday.

            "Capital Lease Obligation" means an obligation that is required to
be classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.

            "Capital Stock" of any Person means any and all shares, units of
beneficial interests (including of an Oil and Gas Royalty Trust), rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity of such Person, including any Preferred Stock,
but excluding any debt securities convertible into or exchangeable for such
equity.

            "Change of Control" means the occurrence of any of the following
events:

            (1)   any "person" (as such term is used in Sections 13(d) and 14(d)
                  of the Exchange Act), other than one or more Permitted
                  Holders, is or becomes

                                      -6-
<PAGE>

                  the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
                  under the Exchange Act), except that for purposes of this
                  clause (1) such person shall be deemed to have "beneficial
                  ownership" of all shares that any such person has the right to
                  acquire, whether such right is exercisable immediately or only
                  after the passage of time), directly or indirectly, of more
                  than 35% of the total voting power of the Voting Stock of the
                  Company; provided, however, that the Permitted Holders
                  beneficially own (as defined in Rules 13d-3 and 13d-5 under
                  the Exchange Act), directly or indirectly, in the aggregate a
                  lesser percentage of the total voting power of the Voting
                  Stock of the Company than such other person and do not have
                  the right or ability by voting power, contract or otherwise to
                  elect or designate for election a majority of the Board of
                  Directors (for the purposes of this clause (1), such other
                  person shall be deemed to beneficially own any Voting Stock of
                  a Person (the "specified person") held by any other Person
                  (the "parent entity"), if such other person is the beneficial
                  owner (as defined above in this clause (1)), directly or
                  indirectly, of more than 35% of the voting power of the Voting
                  Stock of such parent entity and the Permitted Holders
                  beneficially own (as defined in Rules 13d-3 and 13d-5 under
                  the Exchange Act), directly or indirectly, in the aggregate a
                  lesser percentage of the voting power of the Voting Stock of
                  such parent entity and do not have the right or ability by
                  voting power, contract or otherwise to elect or designate for
                  election a majority of the board of directors of such parent
                  entity);

            (2)   during any period of two consecutive years, individuals who,
                  at the beginning of such period, constituted the Board of
                  Directors (together with (A) any new directors whose election
                  by such Board of Directors or whose nomination for election by
                  the shareholders of the Company was approved by a vote of the
                  majority of the directors of the Company then still in office
                  who were either directors at the beginning of such period or
                  whose election or nomination for election was previously so
                  approved and (B) any representative of a Permitted Holder)
                  cease for any reason to constitute a majority of the Board of
                  Directors then in office;

            (3)   the adoption of a plan relating to the liquidation or
                  dissolution of the Company; or

            (4)   the merger or consolidation of the Company with or into
                  another Person or the merger of another Person with or into
                  the Company, or the sale of all or substantially all the
                  assets of the Company (determined on a consolidated basis) to
                  another Person (other than, in all such cases, a Person that
                  is controlled by one or more Permitted Holders), other than a
                  transaction following which (A) in the case of a merger or
                  consolidation transaction, holders of securities that
                  represented 100% of the Voting Stock of the Company
                  immediately prior to such transaction (or other securities
                  into which such securities are converted as part of such
                  merger or consolidation transaction) own directly or
                  indirectly at least a majority

                                      -7-
<PAGE>

                  of the voting power of the Voting Stock of the surviving
                  Person in such merger or consolidation transaction immediately
                  after such transaction and (B) in the case of a sale of assets
                  transaction, each transferee becomes an obligor in respect of
                  the Securities and a Subsidiary of the transferor of such
                  assets.

            "Code" means the Internal Revenue Code of 1986, as amended.

            "Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.

            "Consolidated Coverage Ratio" as of any date of determination means
the ratio of (x) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters for which financial information of the
Company has been made publicly available prior to the date of such determination
to (y) Consolidated Interest Expense for such four fiscal quarters; provided,
however, that:

            (1)   if the Company or any Restricted Subsidiary has Incurred any
                  Indebtedness since the beginning of such period that remains
                  outstanding or if the transaction giving rise to the need to
                  calculate the Consolidated Coverage Ratio is an Incurrence of
                  Indebtedness, or both, EBITDA and Consolidated Interest
                  Expense for such period shall be calculated after giving
                  effect on a pro forma basis to such Indebtedness and the use
                  of proceeds thereof as if such Indebtedness had been Incurred
                  on the first day of such period and such proceeds had been
                  applied as of such date;

            (2)   if the Company or any Restricted Subsidiary has repaid,
                  repurchased, defeased or otherwise discharged any Indebtedness
                  since the beginning of such period or if any Indebtedness is
                  to be repaid, repurchased, defeased or otherwise discharged on
                  the date of the transaction giving rise to the need to
                  calculate the Consolidated Coverage Ratio, EBITDA and
                  Consolidated Interest Expense for such period shall be
                  calculated on a pro forma basis as if such discharge had
                  occurred on the first day of such period and as if the Company
                  or such Restricted Subsidiary had not earned the interest
                  income actually earned (if any) during such period in respect
                  of cash or Temporary Cash Investments used to repay,
                  repurchase, defease or otherwise discharge such Indebtedness;

            (3)   if since the beginning of such period the Company or any
                  Restricted Subsidiary shall have made any Asset Disposition,
                  EBITDA for such period shall be reduced by an amount equal to
                  EBITDA (if positive) directly attributable to the assets which
                  were the subject of such Asset Disposition for such period, or
                  increased by an amount equal to EBITDA (if negative), directly
                  attributable thereto for such period and Consolidated Interest
                  Expense for such period shall be reduced by an amount equal to
                  the Consolidated Interest Expense directly attributable to any
                  Indebtedness

                                      -8-
<PAGE>

                  of the Company or any Restricted Subsidiary repaid,
                  repurchased, defeased or otherwise discharged with respect to
                  the Company and its continuing Restricted Subsidiaries in
                  connection with such Asset Disposition for such period (or, if
                  the Capital Stock of any Restricted Subsidiary is sold, the
                  Consolidated Interest Expense for such period directly
                  attributable to the Indebtedness of such Restricted Subsidiary
                  to the extent the Company and its continuing Restricted
                  Subsidiaries are no longer liable for such Indebtedness after
                  such sale);

            (4)   if since the beginning of such period the Company or any
                  Restricted Subsidiary (by merger or otherwise) shall have made
                  an Investment in any Restricted Subsidiary (or any Person
                  which becomes a Restricted Subsidiary) or an acquisition of
                  material assets, including any acquisition of assets occurring
                  in connection with a transaction requiring a calculation to be
                  made hereunder, which constitutes all or substantially all of
                  an operating unit of a business, EBITDA and Consolidated
                  Interest Expense for such period shall be calculated after
                  giving pro forma effect thereto (including the Incurrence of
                  any Indebtedness) as if such Investment or acquisition
                  occurred on the first day of such period; and

            (5)   if since the beginning of such period any Person (that
                  subsequently became a Restricted Subsidiary or was merged with
                  or into the Company or any Restricted Subsidiary since the
                  beginning of such period) shall have made any Asset
                  Disposition, any Investment or acquisition of assets that
                  would have required an adjustment pursuant to clause (3) or
                  (4) above if made by the Company or a Restricted Subsidiary
                  during such period, EBITDA and Consolidated Interest Expense
                  for such period shall be calculated after giving pro forma
                  effect thereto as if such Asset Disposition, Investment or
                  acquisition occurred on the first day of such period.

For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting Officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness, but if the remaining term of such Interest Rate Agreement is
less than twelve months, then such Interest Rate Agreement shall only be taken
into account for that portion of the period equal to the remaining term
thereof).

            The Consolidated Interest Expense attributable to interest on any
Indebtedness under a revolving credit facility, the outstanding principal
balance of which is required to be computed on a pro forma basis in accordance
with the foregoing, shall be computed based upon the average daily balance of
such Indebtedness during the applicable period, provided, that such average
daily balance shall take into account the amount of any repayment of
Indebtedness under

                                      -9-
<PAGE>

such revolving credit facility during the applicable period, to the extent such
repayment permanently reduced the commitments or amounts available to be
borrowed under such facility.

            "Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, without
duplication:

            (1)   interest expense attributable to capital leases and the
                  interest expense attributable to leases constituting part of a
                  Sale/Leaseback Transaction;

            (2)   amortization of debt discount and debt issuance cost;

            (3)   capitalized interest;

            (4)   non-cash interest expense;

            (5)   commissions, discounts and other fees and charges owed with
                  respect to letters of credit and bankers' acceptance
                  financing;

            (6)   net payments pursuant to Interest Rate Agreements;

            (7)   Preferred Stock dividends in respect of all Preferred Stock
                  held by Persons other than the Company or a Wholly Owned
                  Subsidiary (other than dividends payable solely in Capital
                  Stock (other than Disqualified Stock) of the Company);

            (8)   interest incurred in connection with Investments in
                  discontinued operations;

            (9)   interest accruing on any Indebtedness of any other Person to
                  the extent such Indebtedness is Guaranteed by (or secured by
                  the assets of) the Company or any Restricted Subsidiary; and

            (10)  the cash contributions to any employee stock ownership plan or
                  similar trust to the extent such contributions are used by
                  such plan or trust to pay interest or fees to any Person
                  (other than the Company) in connection with Indebtedness
                  Incurred by such plan or trust;

minus, to the extent included above, write-off of deferred financing costs and
interest attributable to Dollar-Denominated Production Payments.

                                      -10-
<PAGE>

            "Consolidated Net Income" means, for any period, the net income of
the Company and its consolidated Subsidiaries; provided, however, that there
shall not be included in such Consolidated Net Income:

            (1)   any net income of any Person (other than the Company) if such
                  Person is not a Restricted Subsidiary, except that:

                  (A)   subject to the exclusion contained in clause (4) below,
                        the Company's equity in the net income of any such
                        Person for such period shall be included in such
                        Consolidated Net Income in an amount equal to the
                        aggregate amount of cash actually distributed by such
                        Person during such period to the Company or a Restricted
                        Subsidiary as a dividend, interest payment or other
                        distribution (subject, in the case of a dividend,
                        interest payment or other distribution paid to a
                        Restricted Subsidiary, to the limitations contained in
                        clause (3) below); and

                  (B)   the Company's equity in a net loss of any such Person
                        for such period shall not be included in determining
                        such Consolidated Net Income, except to the extent of
                        the aggregate cash actually contributed to such Person
                        by the Company or a Restricted Subsidiary during such
                        period;

            (2)   solely for the purposes of determining the aggregate amount
                  available for Restricted Payments under Section 4.04(a)(3),
                  any net income (or loss) of any Person acquired by the Company
                  or a Subsidiary in a pooling of interests transaction for any
                  period prior to the date of such acquisition;

            (3)   any net income of any Restricted Subsidiary if such Restricted
                  Subsidiary is subject to restrictions, directly or indirectly,
                  on the payment of dividends or the making of distributions by
                  such Restricted Subsidiary, directly or indirectly, to the
                  Company, except that:

                  (A)   subject to the exclusion contained in clause (4) below,
                        the Company's equity in the net income of any such
                        Restricted Subsidiary for such period shall be included
                        in such Consolidated Net Income in an amount equal to
                        the aggregate amount of cash that could have been
                        distributed by such Restricted Subsidiary during such
                        period to the Company or another Restricted Subsidiary
                        as a dividend, interest payment or other distribution
                        (subject, in the case of a dividend, interest payment or
                        other distribution paid to another Restricted
                        Subsidiary, to the limitation contained in this clause);
                        and

                  (B)   the Company's equity in a net loss of any such
                        Restricted Subsidiary for such period shall be included
                        in determining such Consolidated Net Income;

                                      -11-
<PAGE>

            (4)   any gain or loss, together with any related provision for
                  taxes on such gain or loss and all related fees and expenses,
                  realized in connection with (A) the sale or other disposition
                  of any assets of the Company, its consolidated Subsidiaries or
                  any other Person (including pursuant to any Sale/Leaseback
                  Transaction) which is not sold or otherwise disposed of in the
                  ordinary course of business and (B) the disposition of any
                  securities of any Person or the extinguishment of any
                  Indebtedness of the Company or any of its Subsidiaries;

            (5)   extraordinary or non-recurring gains or losses, together with
                  any related provision for taxes on such gains or losses and
                  all related fees and expenses; and

            (6)   the cumulative effect of a change in accounting principles;

            (7)   any impairment losses on oil and natural gas properties;

            (8)   any unrealized non-cash gains or losses or charges in respect
                  of Hedging Obligations (including those resulting from the
                  application of FAS 133); and

            (9)   any non-cash compensation charge arising from any grant of
                  stock, stock options or other equity-based awards.

Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of Investments or
return of capital to the Company or a Restricted Subsidiary to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under such section pursuant to clause (a)(3)(E)
thereof.

            "Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as the sum of:

            (1)   the par or stated value of all outstanding Capital Stock of
                  the Company plus

            (2)   paid-in capital or capital surplus relating to such Capital
                  Stock plus

            (3)   any retained earnings or earned surplus

less (A) any accumulated deficit and (B) any amounts attributable to
Disqualified Stock.

            "Cortez" means Cortez Oil & Gas, Inc., a Delaware corporation.

                                      -12-
<PAGE>

            "Cortez Agreement" means that certain Stock Purchase Agreement dated
March 2, 2004 by and among the Company, Cortez and the other parties thereto.

            "Credit Facilities" means, with respect to the Company or any
Restricted Subsidiary, one or more debt facilities (including under the
Revolving Credit Facility) or commercial paper facilities with banks or other
lenders providing revolving credit loans, term loans, production payment
facilities, receivables financing facilities (including through the sale of
receivables) or letters of credit facilities, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.

            "Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.

            "Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.

            "Designated Senior Indebtedness", with respect to a Person means:

            (1)   the Bank Indebtedness; and

            (2)   any other Senior Indebtedness of such Person which, at the
                  date of determination, has an aggregate principal amount
                  outstanding of, or under which, at the date of determination,
                  the holders thereof are committed to lend up to, at least
                  $25.0 million and is specifically designated by such Person in
                  the instrument evidencing or governing such Senior
                  Indebtedness as "Designated Senior Indebtedness" for purposes
                  of this Indenture.

            "Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder) or upon
the happening of any event:

            (1)   matures or is mandatorily redeemable (other than redeemable
                  only for Capital Stock of such Person which is not itself
                  Disqualified Stock) pursuant to a sinking fund obligation or
                  otherwise;

            (2)   is convertible or exchangeable at the option of the holder for
                  Indebtedness or Disqualified Stock; or

            (3)   is mandatorily redeemable or must be purchased upon the
                  occurrence of certain events or otherwise, in whole or in part
                  (other than redeemable or required to be purchased only for
                  Capital Stock of such Person which is not itself Disqualified
                  Stock);

in each case on or prior to the 91st day after the Stated Maturity of the
Securities; provided, however, (A) that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to purchase or redeem

                                      -13-
<PAGE>

such Capital Stock upon the occurrence of an "asset sale" or "change of control"
shall not constitute Disqualified Stock if:

            (1)   the "asset sale" or "change of control" provisions applicable
                  to such Capital Stock are not more favorable, as measured by
                  the purchase or redemption price or the breadth of the
                  definition of the event or events triggering such purchase or
                  redemption obligation, to the holders of such Capital Stock
                  than the terms applicable to the Securities and described in
                  Sections 4.06 and 4.08; and

            (2)   any such requirement only becomes operative after compliance
                  with such terms applicable to the Securities, including the
                  purchase of any Securities tendered pursuant thereto.

and (B) any Capital Stock that would constitute Disqualified Stock solely
because such Capital Stock is issued pursuant to any plan for the benefit of
employees of the Company or Subsidiaries of the Company or by any such plan to
such employees and may be required to be repurchased by the Company in order to
satisfy applicable statutory or regulatory obligations shall not constitute
Disqualified Stock.

            The amount of any Disqualified Stock that does not have a fixed
redemption, repayment or repurchase price will be calculated in accordance with
the terms of such Disqualified Stock as if such Disqualified Stock were
redeemed, repaid or repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to this Indenture; provided,
however, that if such Disqualified Stock could not be required to be redeemed,
repaid or repurchased at the time of such determination, the redemption,
repayment or repurchase price will be the book value of such Disqualified Stock
as reflected in the most recent financial statements of such Person.

            "Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.

            "EBITDA" for any period means the sum of Consolidated Net Income,
plus the following to the extent deducted in calculating such Consolidated Net
Income:

            (1)   all income tax expense of the Company and its consolidated
                  Restricted Subsidiaries;

            (2)   Consolidated Interest Expense;

            (3)   depreciation, depletion, exploration and amortization expense
                  of the Company and its consolidated Restricted Subsidiaries
                  (excluding amortization expense attributable to a prepaid
                  operating activity item that was paid in cash in a prior
                  period); and

            (4)   all other non-cash charges of the Company and its consolidated
                  Restricted Subsidiaries (excluding any such non-cash charge to
                  the extent that it

                                      -14-
<PAGE>

                  represents an accrual of or reserve for cash expenditures in
                  any future period);

in each case for such period, and less, to the extent included in calculating
such Consolidated Net Income and in excess of any costs or expenses attributable
thereto and deducted in calculating such Consolidated Net Income, the sum of:

                  (A)   the amount of deferred revenues that are amortized
                        during such period and are attributable to reserves that
                        are subject to Volumetric Production Payments; and

                  (B)   amounts recorded in accordance with GAAP as repayments
                        of principal and interest pursuant to Dollar-Denominated
                        Production Payments.

Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation, depletion, exploration and amortization and
non-cash charges of, a Restricted Subsidiary shall be added to Consolidated Net
Income to compute EBITDA (1) only to the extent (and in the same proportion,
including by reason of minority interests) that the net income of such
Restricted Subsidiary was included in calculating Consolidated Net Income and
(2) only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Restricted
Subsidiary or its stockholders.

            "Escrow Agent" means Wells Fargo Bank, National Association, in its
capacity as escrow agent under the Escrow Agreement.

            "Escrow Agreement" means the Escrow Agreement dated as of April 2,
2004 among Goldman, Sachs & Co., the Trustee and the Escrow Agent.

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

            "Exchange Securities" means the debt securities of the Company
issued pursuant to the Indenture in exchange for, and in an aggregate principal
amount equal to, the Securities, in compliance with the terms of the
Registration Rights Agreement.

            "Existing Investments" means assets (including securities) held by
the Company or any of the Restricted Subsidiaries as consideration for an
Investment made on or before the Issue Date or acquired thereafter pursuant to
any agreement or obligation as in effect on the Issue Date.

            "GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in:

            (1)   the opinions and pronouncements of the Accounting Principles
                  Board of the American Institute of Certified Public
                  Accountants;

                                      -15-
<PAGE>

            (2)   statements and pronouncements of the Financial Accounting
                  Standards Board;

            (3)   such other statements by such other entity as approved by a
                  significant segment of the accounting profession; and

            (4)   the rules and regulations of the SEC governing the inclusion
                  of financial statements (including pro forma financial
                  statements) in periodic reports required to be filed pursuant
                  to Section 13 of the Exchange Act, including opinions and
                  pronouncements in staff accounting bulletins and similar
                  written statements from the accounting staff of the SEC.

            "Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person:

            (1)   to purchase or pay (or advance or supply funds for the
                  purchase or payment of) such Indebtedness of such Person
                  (whether arising by virtue of partnership arrangements, or by
                  agreements to keep-well, to purchase assets, goods, securities
                  or services, to take-or-pay or to maintain financial statement
                  conditions or otherwise); or

            (2)   entered into for the purpose of assuring in any other manner
                  the obligee of such Indebtedness of the payment thereof or to
                  protect such obligee against loss in respect thereof (in whole
                  or in part);

provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business, or any obligation to
the extent it is payable only in Capital Stock of the Guarantor that is not
Disqualified Stock. The term "Guarantee" used as a verb has a corresponding
meaning. The term "Guarantor" shall mean any Person Guaranteeing any
Indebtedness.

            "Guaranty Agreement" means a supplemental indenture, in a form
satisfactory to the Trustee, pursuant to which a Subsidiary Guarantor guarantees
the Company's obligations with respect to the Securities on the terms provided
for in this Indenture.

            "Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Oil and Natural Gas Hedging Contract, Interest Rate
Agreement or Currency Agreement.

            "Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.

            "Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Person at the time it becomes a Restricted

                                      -16-
<PAGE>

Subsidiary. The term "Incurrence" when used as a noun shall have a correlative
meaning. Solely for purposes of determining compliance with Section 4.03:

            (1)   amortization of debt discount or the accretion of principal
                  with respect to a non-interest bearing or other discount
                  security;

            (2)   the payment of regularly scheduled interest in the form of
                  additional Indebtedness of the same instrument or the payment
                  of regularly scheduled dividends on Capital Stock in the form
                  of additional Capital Stock of the same class and with the
                  same terms;

            (3)   the obligation to pay a premium in respect of Indebtedness
                  arising in connection with the issuance of a notice of
                  redemption or making of a mandatory offer to purchase such
                  Indebtedness; and

            (4)   unrealized losses or charges in respect of Hedging Obligations
                  (including those resulting from the application of FAS 133)

will not be deemed to be the Incurrence of Indebtedness.

            "Indebtedness" means, with respect to any Person on any date of
determination (without duplication):

            (1)   the principal in respect of (A) indebtedness of such Person
                  for money borrowed and (B) indebtedness evidenced by notes,
                  debentures, bonds or other similar instruments for the payment
                  of which such Person is responsible or liable, including, in
                  each case, any premium on such indebtedness to the extent such
                  premium has become due and payable;

            (2)   all Capital Lease Obligations of such Person and all
                  Attributable Debt in respect of Sale/Leaseback Transactions
                  entered into by such Person;

            (3)   all obligations of such Person (other than obligations payable
                  solely in Capital Stock of such Person that is not
                  Disqualified Stock) issued or assumed as the deferred purchase
                  price of property, all conditional sale obligations of such
                  Person and all obligations of such Person under any title
                  retention agreement (but excluding trade accounts payable and
                  accrued expenses);

            (4)   all obligations of such Person for the reimbursement of any
                  obligor on any letter of credit, bankers' acceptance or
                  similar credit transactions (other than obligations with
                  respect to letters of credit securing obligations (other than
                  obligations described in clauses (1) through (3) above)
                  entered into in the ordinary course of business of such Person
                  to the extent such letters of credit are not drawn upon or, if
                  and to the extent drawn upon, such drawing is reimbursed no
                  later than the tenth Business Day following payment on the
                  letter of credit);

                                      -17-
<PAGE>

            (5)   the amount of all obligations of such Person with respect to
                  the redemption, repayment or other repurchase of any
                  Disqualified Stock of such Person or, with respect to any
                  Preferred Stock of any Restricted Subsidiary of such Person
                  the principal amount of such Preferred Stock to be determined
                  in accordance with this Indenture (but excluding, in each
                  case, any accrued dividends) (and the term "Incur
                  Indebtedness" and similar terms include issuances of such
                  Disqualified Stock and Preferred Stock);

            (6)   all obligations of the types referred to in clauses (1)
                  through (5) of other Persons and all dividends of other
                  Persons for the payment of which, in either case, such Person
                  is responsible or liable, directly or indirectly, as obligor,
                  guarantor or otherwise, including by means of any Guarantee;

            (7)   all obligations of the types referred to in clauses (1)
                  through (6) of other Persons secured by any Lien on any
                  property or asset of such Person (whether or not such
                  obligation is assumed by such Person), the amount of such
                  obligation being deemed to be the lesser of the liquidation
                  value of such property or asset and the amount of the
                  obligation so secured;

            (8)   to the extent not otherwise included in this definition,
                  Hedging Obligations of such Person; and

            (9)   any Guarantee by such Person of production or payment with
                  respect to a Production Payment and Reserve Sale;

if and to the extent, in the case of obligations of the types referred to in
clauses (1), (2) and (3) above, such obligations would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP.

            Notwithstanding the foregoing, the following shall not constitute
"Indebtedness":

            (1)   accrued expenses and trade accounts payable arising in the
                  ordinary course of business;

            (2)   except as expressly provided in clause (9) above, Production
                  Payments and Reserve Sales;

            (3)   obligations in respect of farm-in agreements;

            (4)   obligations arising from guarantees to suppliers, lessors,
                  licensees, contractors, franchisees or customers incurred in
                  the ordinary course of business;

            (5)   any obligations under workers' compensation laws and similar
                  legislation;

            (6)   any obligation in respect of any royalty, overriding royalty,
                  net profits interest, master limited partnership interest or
                  other interest in oil and

                                      -18-
<PAGE>

                  natural gas properties, reserves or the right to receive all
                  or a portion of the production or the proceeds from the sale
                  of production attributable to such properties; or

            (7)   any indebtedness which has been defeased in accordance with
                  GAAP or defeased pursuant to the deposit of cash or Government
                  Securities (in an amount sufficient to satisfy all such
                  indebtedness obligations at maturity or redemption, as
                  applicable, and all payments of interest and premium, if any)
                  in a trust or account created or pledged for the sole benefit
                  of the holders of such indebtedness, and subject to no other
                  Liens, and the other applicable terms of the instrument
                  governing such indebtedness.

            Notwithstanding the foregoing, in connection with the purchase by
the Company or any Restricted Subsidiary of any business, the term
"Indebtedness" will exclude post-closing payment adjustments to which the seller
may become entitled to the extent such payment is determined by a final closing
balance sheet or such payment depends on the performance of such business after
the closing; provided, however, that, at the time of closing, the amount of any
such payment is not determinable and, to the extent such payment thereafter
becomes fixed and determined, the amount is paid within 30 days thereafter.

            The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date; provided,
however, that in the case of Indebtedness sold at a discount, the amount of such
Indebtedness at any time will be the accreted value thereof at such time.

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

            "Independent Qualified Party" means an investment banking firm,
accounting firm or appraisal firm of national standing; provided, however, that
such firm is not an Affiliate of the Company.

            "Interest Rate Agreement" means in respect of a Person any interest
rate swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect such Person against fluctuations in interest
rates.

            "Investment" in any Person means any direct or indirect advance,
loan or other extension of credit (including by way of Guarantee but excluding
any such extension of credit made in the ordinary course of business to any
customer or supplier) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition for value of Capital
Stock, Indebtedness or other similar instruments issued by such Person. Except
as otherwise provided for herein, the amount of an Investment shall be its fair
value at the time the Investment is made and without giving effect to subsequent
changes in value.

                                      -19-
<PAGE>

            For purposes of the definition of "Unrestricted Subsidiary", the
definition of "Restricted Payment" and Section 4.04:

            (1)   "Investment" shall include the portion (proportionate to the
                  Company's equity interest in such Subsidiary) of the fair
                  market value of the net assets of any Subsidiary of the
                  Company at the time that such Subsidiary is designated an
                  Unrestricted Subsidiary; provided, however, that upon a
                  redesignation of such Subsidiary as a Restricted Subsidiary,
                  the Company shall be deemed to continue to have a permanent
                  "Investment" in an Unrestricted Subsidiary equal to an amount
                  (if positive) equal to (A) the Company's "Investment" in such
                  Subsidiary at the time of such redesignation less (B) the
                  portion (proportionate to the Company's equity interest in
                  such Subsidiary) of the fair market value of the net assets of
                  such Subsidiary at the time of such redesignation; and

            (2)   any property transferred to or from an Unrestricted Subsidiary
                  shall be valued at its fair market value at the time of such
                  transfer, in each case as determined in good faith by the
                  Board of Directors.

            "Investment Grade Rating" means having both a rating equal to or
higher than BBB- by S&P and a rating equal to or higher than Baa3 by Moody's.

            "Issue Date" means April 2, 2004.

            "Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions are not required to be open in the State of New York.

            "Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).

            "Material Change" means an increase or decrease (excluding changes
that result solely from changes in prices and changes resulting from the
incurrence of previously estimated development costs) of more than 50% during a
fiscal quarter in the discounted future net revenues from proved oil and natural
gas reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with clause (a)(1) of the definition of ACNTA; provided, however,
that the following will be excluded from the calculation of Material Change:

            (1)   any acquisitions during the fiscal quarter of oil and natural
                  gas reserves that have been estimated by independent petroleum
                  engineers and with respect to which a report or reports of
                  such engineers exist; and

            (2)   any disposition of properties existing at the beginning of
                  such fiscal quarter that have been disposed of in compliance
                  with Section 4.06.

            "Moody's" means Moody's Investors Service, Inc.

                                      -20-
<PAGE>

            "Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received (and, in the case of an Asset
Disposition by an Oil and Gas Royalty Trust, only as and when received by the
Company or any Restricted Subsidiary), but excluding any other consideration
received in the form of assumption by the acquiring Person of Indebtedness or
other obligations relating to such properties or assets or received in any other
non-cash form), in each case net of:

            (1)   all accounting, engineering, investment banking, brokerage,
                  legal, title and recording tax expenses, commissions and other
                  fees and expenses incurred, and all Federal, state,
                  provincial, foreign and local and other taxes required to be
                  accrued as a liability under GAAP, as a consequence of such
                  Asset Disposition, and any relocation expenses incurred or
                  assumed in connection with such Asset Disposition;

            (2)   all payments made on any Indebtedness which is secured by any
                  assets subject to such Asset Disposition, in accordance with
                  the terms of any Lien upon or other security agreement of any
                  kind with respect to such assets, or which must by its terms,
                  or in order to obtain a necessary consent to such Asset
                  Disposition, or by applicable law, be repaid out of the
                  proceeds from such Asset Disposition;

            (3)   all distributions and other payments required to be made to
                  minority interest holders in Restricted Subsidiaries as a
                  result of such Asset Disposition; and

            (4)   the deduction of appropriate amounts provided by the seller as
                  a reserve for adjustment in respect of the sale price of the
                  assets that were the subject of such Asset Disposition or as a
                  reserve, in accordance with GAAP, against any liabilities
                  associated with the property or other assets disposed in such
                  Asset Disposition and retained by the Company or any
                  Restricted Subsidiary after such Asset Disposition.

            "Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock or Indebtedness, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.

            "Net Present Value" means, with respect to any proved oil and
natural gas reserves, the discounted future net cash flows associated with such
reserves, determined in accordance with the rules and regulations (including
interpretations thereof) of the SEC in effect on the date of the Offering
Circular.

                                      -21-
<PAGE>

            "Net Working Capital" means:

            (1)   all current assets of the Company and its Restricted
      Subsidiaries, except current assets from commodity price risk management
      activities arising in the ordinary course of business; minus

            (2)   all current liabilities of the Company and its Restricted
      Subsidiaries, except current liabilities included in Indebtedness and
      current liabilities from commodity price risk management activities
      arising in the ordinary course of business;

in each case determined in accordance with GAAP.

            "Non-Recourse Purchase Money Indebtedness" means Indebtedness (other
than Capital Lease Obligations) of the Company or any Subsidiary Guarantor
incurred in connection with the acquisition by the Company or such Subsidiary
Guarantor in the ordinary course of business of fixed assets used in the Oil and
Gas Business (including office buildings and other real property used by the
Company or such Subsidiary Guarantor in conducting its operations) with respect
to which;

            (1)   the holders of such Indebtedness agree that they will look
      solely to the fixed assets so acquired which secure such Indebtedness, and
      neither the Company nor any Restricted Subsidiary (a) is directly or
      indirectly liable for such Indebtedness or (b) provides credit support,
      including any undertaking, Guarantee, agreement or instrument that would
      constitute Indebtedness (other than the grant of a Lien on such acquired
      fixed assets); and

            (2)   no default or even of default with respect to such
      Indebtedness would cause or permit (after notice or passage of time or
      both), any holder of any other Indebtedness of the Company or a Subsidiary
      Guarantor to declare a default or event of default on such other
      Indebtedness or cause the payment, repurchase, defeasance or other
      acquisition or retirement for value thereof to be accelerated or payable
      prior to any scheduled principal payment, scheduled sinking fund payment
      or Stated Maturity.

            "Obligations" means, with respect to any Indebtedness, all
obligations for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.

            "Offering Circular" means the offering circular, dated March 30,
2004, relating the issuance of the Securities.

            "Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.

            "Officers' Certificate" means a certificate signed by two Officers.

                                      -22-
<PAGE>

            "Oil and Gas Business" means:

            (1)   the acquisition, exploration, exploitation, development,
      operation and disposition of interests in oil, natural gas, other
      hydrocarbon and mineral properties;

            (2)   the gathering, marketing, distribution, treating, processing,
      storage, refining, selling and transporting of any production from such
      interests or properties and the marketing of oil, natural gas, other
      hydrocarbons and minerals obtained from unrelated Persons;

            (3)   any business relating to or arising from exploration for or
      exploitation, development, production, treatment, processing, storage,
      refining, transportation, gathering or marketing of oil, natural gas,
      other hydrocarbons and minerals and products produced in association
      therewith;

            (4)   any other related energy business, including power generation
      and electrical transmission business where fuel required by such business
      is supplied, directly or indirectly, from oil, natural gas, other
      hydrocarbons and minerals produced substantially from properties in which
      the Company or its Restricted Subsidiaries, directly or indirectly,
      participates;

            (5)   any business relating to oil field sales and service; and

            (6)   any activity necessary, appropriate or incidental to the
      activities described in the preceding clauses (1) through (5) of this
      definition.

            "Oil and Gas Royalty Trust" means a trust that is an Unrestricted
Subsidiary formed by the Company or a Restricted Subsidiary to hold net profits
interests in any of the Company's and its Restricted Subsidiaries' oil and
natural gas properties that, at all times:

            (1)   holds no assets other than (a) net profits interests in the
      Company's and its Restricted Subsidiaries' oil and natural gas properties
      and (b) Temporary Cash Investments;

            (2)   conducts no business or activities other than the holding of
      the assets permitted by clause (1) above and the distribution of its
      available funds as required by clause (3) below;

            (3)   distributes all funds (less reasonable reserves, if any, for
      operating liabilities as determined by the trustee) held by it to its unit
      holders on a pro rata basis no less frequently than monthly;

            (4)   does not incur, nor permit to exist, directly or indirectly,
      any Indebtedness other than Indebtedness Incurred for its routine
      administrative expenses;

            (5)   is not permitted to sell its net profits interests except in
      immaterial amounts or when revenue from such interests fall below $1.0
      million annually;

                                      -23-
<PAGE>

            (6)   is not permitted to sell its net profits interests except for
      cash equal to the fair market value thereof (as determined in good faith
      by the trustee of such Oil and Gas Royalty Trust, whose determination
      shall be conclusive);

            (7)   is not permitted to issue Capital Stock except to the Company
      or a Restricted Subsidiary in exchange for the conveyance to such Oil and
      Gas Royalty Trust of net profits interests in connection with its
      formation; and

            (8)   is governed by a trust agreement that requires the trustee to
      operate the Oil and Gas Royalty Trust in compliance with the terms of
      clauses (1) through (7) above.

            "Oil and Natural Gas Hedging Contract" means any oil and natural gas
hedging agreement, and other agreement or arrangement designed to protect the
Company or any Restricted Subsidiary against fluctuations in oil and natural gas
prices.

            "Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.

            "Permitted Business Investments" means Investments and expenditures
made in the ordinary course of, and of a nature that is or shall have become
customary in, the Oil and Gas Business as means of actively exploiting,
exploring for, acquiring, developing, processing, gathering, marketing or
transporting oil, natural gas, other hydrocarbons and minerals through
agreements, transactions, interests or arrangements that permit one to share
risks or costs, comply with regulatory requirements regarding local ownership or
satisfy other objectives customarily achieved through the conduct of the Oil and
Gas Business jointly with third parties, including:

            (1)   ownership interests in oil, natural gas, other hydrocarbon and
      mineral properties or gathering, transportation, processing, storage or
      related systems; and

            (2)   entry into, and Investments and expenditures in the form of or
      pursuant to, operating agreements, working interests, royalty interests,
      mineral leases, processing agreements, farm-in agreements, farm-out
      agreements, contracts for the sale, transportation or exchange of oil,
      natural gas, other hydrocarbons and minerals, production sharing
      agreements, development agreements, area of mutual interest agreements,
      unitization agreements, pooling arrangements, joint bidding agreements,
      service contracts, joint venture agreements, partnership agreements
      (whether general or limited), limited liability company agreements,
      subscription agreements, stock purchase agreements, stockholder agreements
      and other similar agreements with third parties (including Unrestricted
      Subsidiaries).

            "Permitted Holders" means:

            (1)   I. Jon Brumley;

            (2)   Jon S. Brumley;

                                      -24-
<PAGE>

            (3)   Warburg Pincus Equity Partners L.P.;

            (4)   trusts, the sole beneficiaries and trustees of which are the
                  individuals listed in clauses (1) and (2) above or their
                  immediate family members;

            (5)   corporations, partnerships and other entities (a) of which the
                  individuals listed in clauses (1) and (2) above or their
                  immediate family members are the beneficial owners of all
                  Capital Stock and other equity or voting interests and (b)
                  that are controlled by such individuals and their immediate
                  family members; and

            (6)   any Affiliates as of the Issue Date or successors of the
                  entity listed in clause (3) above.

            "Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:

            (1)   (a) the Company, (b) a Restricted Subsidiary or (c) a Person
                  that will, upon the making of such Investment become a
                  Restricted Subsidiary; provided, however, that the primary
                  business of such Restricted Subsidiary is a Related Business,
                  or (d) another Person if, as a result of such Investment, such
                  other Person is merged or consolidated with or into, or
                  transfers or conveys all or substantially all its assets to,
                  the Company or a Restricted Subsidiary; provided, however,
                  that the primary business of such Person is a Related
                  Business;

            (2)   cash and Temporary Cash Investments;

            (3)   receivables owing to the Company or any Restricted Subsidiary
                  if created or acquired in the ordinary course of business and
                  payable or dischargeable in accordance with customary trade
                  terms; provided, however, that such trade terms may include
                  such concessionary trade terms as the Company or any such
                  Restricted Subsidiary deems reasonable under the
                  circumstances;

            (4)   payroll, travel and similar advances to cover matters that are
                  expected at the time of such advances ultimately to be treated
                  as expenses for accounting purposes and that are made in the
                  ordinary course of business;

            (5)   loans or advances to officers, directors and employees made in
                  the ordinary course of business consistent with past practices
                  of the Company or such Restricted Subsidiary;

            (6)   Capital Stock, obligations or securities received in
                  settlement of debts created in the ordinary course of business
                  and owing to the Company or any Restricted Subsidiary or in
                  satisfaction of judgments;

                                      -25-
<PAGE>

            (7)   any Person to the extent such Investment represents the
                  non-cash portion of the consideration received for an Asset
                  Disposition as permitted pursuant to Section 4.06 or
                  consideration received for a disposition not constituting an
                  Asset Disposition;

            (8)   any Person where such Investment was acquired by the Company
                  or any of its Restricted Subsidiaries (a) in exchange for any
                  other Investment or accounts receivable held by the Company or
                  any such Restricted Subsidiary in connection with or as a
                  result of a bankruptcy, workout, reorganization or
                  recapitalization of the issuer of such other Investment or
                  accounts receivable or (b) as a result of a foreclosure by the
                  Company or any of its Restricted Subsidiaries with respect to
                  any secured Investment or other transfer of title with respect
                  to any secured Investment in default;

            (9)   any acquisitions of Capital Stock solely in exchange for
                  Capital Stock (other than Disqualified Stock) of the Company;
                  provided, however, that the fair market value of such acquired
                  Capital Stock, when taken together with all other Capital
                  Stock acquired pursuant to this clause (9) and at the time
                  owned by the Company or its Restricted Subsidiaries, does not
                  exceed $10.0 million;

            (10)  Hedging Obligations;

            (11)  obligations of one or more officers, directors or employees of
                  the Company or any of its Restricted Subsidiaries in
                  connection with such individual's acquisition of shares of
                  Capital Stock of the Company (and refinancings of the
                  principal thereof and accrued interest thereon) so long as no
                  net cash or other assets of the Company and its Restricted
                  Subsidiaries are paid by the Company or any of its Restricted
                  Subsidiaries to such individuals in connection with the
                  acquisition of any such obligations;

            (12)  Existing Investments and any Investments made with the
                  proceeds of any dispositions thereof;

            (13)  Permitted Business Investments;

            (14)  Guarantees of performance or other obligations (other than
                  Indebtedness) arising in the ordinary course in the Oil and
                  Gas Business, including obligations under oil and natural gas
                  exploration, development, joint operating, and related
                  agreements and licenses or concessions related to the Oil and
                  Gas Business;

            (15)  Investments in prepaid expenses, negotiable instruments held
                  for collection or deposit and lease, utility and workers
                  compensation, performance and similar deposits entered into as
                  a result of the operations of the business in the ordinary
                  course of business;

                                      -26-
<PAGE>

            (16)  Investments in a wholly-owned Unrestricted Subsidiary that
                  constructs and owns an office building for use as the
                  Company's headquarters in an aggregate amount not to exceed
                  $10.0 million at any one time outstanding;

            (17)  Investments in Capital Stock of any Oil and Gas Royalty Trust;
                  and

            (18)  Investments in any Person, not otherwise permitted to be made
                  pursuant to clause (1) through (17), in an aggregate amount,
                  which when taken together with all other Investments made on
                  or after the Issue Date pursuant to this clause, does not
                  exceed $20.0 million at any one time outstanding (after giving
                  effect to any reductions in the aggregate amount of such
                  Investments as a result of the disposition thereof, including
                  through liquidation, repayment or other reduction (but
                  excluding dividends) for cash, the aggregate amount of such
                  reductions not to exceed the aggregate amount of such
                  Investments outstanding and previously made pursuant to this
                  clause (18).

            "Permitted Liens" means the following types of Liens:

            (1)   Liens securing Senior Indebtedness;

            (2)   Liens in favor of the Company or a Restricted Subsidiary;

            (3)   Liens securing the Securities, any Subsidiary Guarantee or
                  other obligations arising under this Indenture;

            (4)   Liens existing as of the Issue Date;

            (5)   Liens for taxes, assessments and governmental charges or
                  claims either (A) not delinquent or (B) contested in good
                  faith by appropriate proceedings and as to which the Company
                  or its Restricted Subsidiaries shall have set aside on its
                  books such reserves as may be required pursuant to GAAP;

            (6)   statutory and contractual Liens of landlords and Liens of
                  carriers, warehousemen, mechanics, suppliers, materialmen,
                  repairmen and other Liens imposed by law or contract incurred
                  in the ordinary course of business for sums not delinquent or
                  being contested in good faith, if such reserve or other
                  appropriate provision, if any, as shall be required by GAAP
                  shall have been made in respect thereof;

            (7)   Liens incurred or deposits or pledges made in the ordinary
                  course of business in connection with workers' compensation,
                  unemployment insurance and other types of social security, or
                  to secure the payment or performance of tenders, statutory or
                  regulatory obligations, surety and appeal bonds, bids, leases,
                  government contracts and leases, performance and return of
                  money bonds and other similar obligations, including letters
                  of credit and bank guarantees required or requested by the
                  United States,

                                      -27-
<PAGE>

                  any State thereof or any foreign government or any
                  subdivision, department, agency, organization or
                  instrumentality of any of the foregoing in connection with any
                  contract or statute (exclusive of obligations for the payment
                  of borrowed money but including lessee or operator obligations
                  under statutes, governmental regulations, contracts or
                  instruments related to the ownership, exploration and
                  production of oil, natural gas, other hydrocarbons and
                  minerals on state, Federal or foreign lands or waters);

            (8)   Liens arising out of judgments, decrees, orders or awards not
                  constituting an Event of Default;

            (9)   leases, subleases, licenses or sublicenses to third parties
                  entered into in the ordinary course of business;

            (10)  Liens on, or related to, assets to secure all or part of the
                  costs incurred in the ordinary course of the Oil and Gas
                  Business for the exploration, drilling, development,
                  production, processing, transportation, marketing, storage or
                  operation thereof;

            (11)  Liens on pipeline or pipeline facilities that arise under
                  operation of law;

            (12)  Liens arising under operating agreements, joint venture
                  agreements, partnership agreements, oil, natural gas, other
                  hydrocarbon and mineral leases, farm-out or farm-in
                  agreements, division orders, contracts for the sale,
                  transportation or exchange of oil or natural gas, unitization
                  and pooling declarations and agreements, area of mutual
                  interest agreements and other agreements that are customary in
                  the Oil and Gas Business;

            (13)  Liens reserved in oil, natural gas, other hydrocarbon and
                  mineral leases for bonus or rental payments and for compliance
                  with the terms of such leases;

            (14)  Liens constituting survey exceptions, encumbrances, easements,
                  and reservations of, and rights to others for, rights-of-way,
                  zoning and other restrictions as to the use of real
                  properties, and minor defects of title which, in the case of
                  any of the foregoing, do not secure the payment of borrowed
                  money, and in the aggregate do not materially adversely affect
                  the value of the assets of the Company and its Restricted
                  Subsidiaries, taken as a whole, or materially impair the use
                  of such properties for the purposes for which such properties
                  are held by the Company or such Subsidiaries;

            (15)  Liens encumbering assets under construction arising from
                  progress or partial payments by a customer of the Company or
                  its Restricted Subsidiaries relating to such assets;

                                      -28-
<PAGE>

            (16)  Liens encumbering deposits made to secure obligations arising
                  from statutory, regulatory, contractual or warranty
                  requirements of the Company or any of its Restricted
                  Subsidiaries, including rights of offset and set-off;

            (17)  Liens upon specific items of inventory or other goods and
                  proceeds of any Person securing such Person's obligations in
                  respect of bankers' acceptances issued or created for the
                  account of such Person to facilitate the purchase, shipment or
                  storage of such inventory or other goods;

            (18)  Liens arising under this Indenture in favor of the Trustee for
                  its own benefit and similar Liens in favor of other trustees,
                  agents and representatives arising under instruments governing
                  Indebtedness permitted to be incurred under this Indenture;
                  provided, however, that such Liens are solely for the benefit
                  of the trustees, agents or representatives in their capacities
                  as such and not for the benefit of the holders of such
                  Indebtedness;

            (19)  set-off, chargeback and other rights of depositary and
                  collection banks and other regulated financial institutions
                  with respect to money or instruments of the Company or any of
                  its Restricted Subsidiaries on deposit with or in the
                  possession of such institutions;

            (20)  Liens arising from the deposit of funds or securities in trust
                  for the purpose of decreasing or defeasing Indebtedness so
                  long as such deposit of funds or securities and such
                  decreasing or defeasing of Indebtedness are permitted under
                  Section 4.04;

            (21)  any Lien existing on any Property of a Person at the time such
                  Person is merged or consolidated with or into the Company or a
                  Restricted Subsidiary or becomes a Restricted Subsidiary (and
                  not incurred in anticipation of or in connection with such
                  transaction), provided that such Liens are not extended to
                  other Property of the Company or the Restricted Subsidiaries;

            (22)  any Lien existing on any Property at the time of the
                  acquisition thereof (and not incurred in anticipation of or in
                  connection with such transaction), provided that such Liens
                  are not extended to other Property of the Company or the
                  Restricted Subsidiaries;

            (23)  Liens to secure Production Payments that are not prohibited by
                  this Indenture to the extent such Liens are limited to the
                  assets that are the subject of such Production Payments; and

            (24)  Liens to secure a Refinancing Indebtedness incurred to
                  refinance Indebtedness that was secured by a Lien permitted
                  under this Indenture and that was incurred in accordance with
                  the provisions of this Indenture; provided that such Liens do
                  not extend to or cover any property or assets

                                      -29-
<PAGE>

                  of the Company or any Restricted Subsidiary other than assets
                  or property securing the Indebtedness so refinanced.

            In each case set forth above, notwithstanding any stated limitation
on the assets that may be subject to such Lien, a Permitted Lien on a specified
asset or group or type of assets may include Liens on all improvements,
additions and accessions thereto and all products and proceeds thereof
(including, without limitation, dividends, distributions and increases in
respect thereof).

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

            "Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.

            "principal" of a Security means the principal of the Security plus
the premium, if any, payable on the Security which is due or overdue or is to
become due at the relevant time.

            "Production Payments" means, collectively, Dollar-Denominated
Production Payments and Volumetric Production Payments.

            "Production Payments and Reserve Sales" means the grant or transfer
to any Person of a Dollar-Denominated Production Payment, Volumetric Production
Payment, royalty, overriding royalty, net profits interest, master limited
partnership interest or other interest in oil and natural gas properties,
reserves or the right to receive all or a portion of the production or the
proceeds from the sale of production attributable to such properties.

            "Public Equity Offering" means an underwritten primary public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act.

            "Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.

            "Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that:

            (1)   such Refinancing Indebtedness has a Stated Maturity no earlier
                  than the Stated Maturity of the Indebtedness being Refinanced;

                                      -30-
<PAGE>

            (2)   such Refinancing Indebtedness has an Average Life at the time
                  such Refinancing Indebtedness is Incurred that is equal to or
                  greater than the Average Life of the Indebtedness being
                  Refinanced; and

            (3)   such Refinancing Indebtedness has an aggregate principal
                  amount (or if Incurred with original issue discount, an
                  aggregate issue price) that is equal to or less than the
                  aggregate principal amount (or if Incurred with original issue
                  discount, the aggregate accreted value) then outstanding or
                  committed (plus accrued interest thereon and fees and
                  expenses, including any premium and defeasance costs) under
                  the Indebtedness being Refinanced;

provided further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that
Refinances Indebtedness of the Company or (B) Indebtedness of the Company or a
Restricted Subsidiary that Refinances Indebtedness of an Unrestricted
Subsidiary.

            "Registration Rights Agreement" means the Registration Rights
Agreement dated April 2, 2004, among the Company, the Subsidiary Guarantors and
Goldman, Sachs & Co., Credit Suisse First Boston LLC, BNP Paribas Securities
Corp., Deutsche Bank Securities Inc., Fleet Securities, Inc., Fortis Investment
Services LLC, J.P. Morgan Securities Inc., KeyBanc Capital Markets, A Division
of McDonald Investments Inc. and Stanford Group Company.

            "Related Business" means the Oil and Gas Business and any other
business in which the Company or a Subsidiary was engaged on the Issue Date and
any business related, ancillary or complementary thereto.

            "Representative" means, with respect to a Person, any trustee, agent
or representative (if any) for an issue of Senior Indebtedness of such Person.

            "Restricted Payment" with respect to any Person means:

            (1)   the declaration or payment of any dividends or any other
                  distributions of any sort in respect of its Capital Stock
                  (including any payment in connection with any merger or
                  consolidation involving such Person) or similar payment to the
                  direct or indirect holders of its Capital Stock (other than
                  dividends or distributions payable solely in its Capital Stock
                  (other than Disqualified Stock) and dividends or distributions
                  payable solely to the Company or a Restricted Subsidiary, and
                  other than pro rata dividends or other distributions (or
                  dividends or distributions on a basis more favorable to the
                  Company or to a Restricted Subsidiary) made by a Subsidiary
                  that is not a Wholly Owned Subsidiary to stockholders (or
                  owners of an equivalent interest in the case of a Subsidiary
                  that is an entity other than a corporation));

            (2)   the purchase, redemption or other acquisition or retirement
                  for value of any Capital Stock of the Company held by any
                  Person (other than a Restricted Subsidiary) or of any Capital
                  Stock of a Restricted Subsidiary

                                     - 31 -
<PAGE>

                  held by any Affiliate of the Company (other than the Company
                  or a Restricted Subsidiary), including in connection with any
                  merger or consolidation and including the exercise of any
                  option to exchange any Capital Stock (other than into Capital
                  Stock of the Company that is not Disqualified Stock);

            (3)   the purchase, repurchase, redemption, defeasance or other
                  acquisition or retirement for value, prior to scheduled
                  maturity, scheduled repayment or scheduled sinking fund
                  payment of any Subordinated Obligations of such Person (other
                  than the purchase, repurchase, redemption, defeasance or other
                  acquisition of Subordinated Obligations or retirement for
                  value in anticipation of satisfying a sinking fund obligation,
                  principal installment or final maturity, in each case due
                  within one year of the date of such purchase, repurchase,
                  redemption, defeasance or other acquisition or retirement for
                  value); or

            (4)   the making of any Investment (other than a Permitted
                  Investment) in any Person.

            "Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.

            "Revolving Credit Facility" means the Credit Agreement dated June
25, 2002, as amended, among the Company, Encore Operating, L.P., Fleet National
Bank, as Administrative Agent, Wachovia Bank, National Association, as
Syndication Agent, Fortis Capital Corp., as Documentation Agent, and the lenders
listed on Schedule I thereto.

            "S&P" means Standard and Poor's Ratings Services.

            "Sale/Leaseback Transaction" means an arrangement relating to
property owned by the Company or a Restricted Subsidiary on the Issue Date or
thereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Subsidiary transfers such property to a Person and the
Company or a Restricted Subsidiary leases it from such Person.

            "SEC" means the U.S. Securities and Exchange Commission.

            "Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.

            "Securities" means the Securities issued under this Indenture.

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

            "Senior Indebtedness" means with respect to any Person:

            (1)   Indebtedness of such Person, whether outstanding on the Issue
                  Date or thereafter Incurred; and

                                     - 32 -
<PAGE>

            (2)   all other Obligations of such Person (including interest
                  accruing on or after the filing of any petition in bankruptcy
                  or for reorganization relating to such Person whether or not
                  post-filing interest is allowed in such proceeding) in respect
                  of Indebtedness described in clause (1) above;

unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such Indebtedness or other obligations are subordinate or pari passu in
right of payment to the Securities or the Subsidiary Guaranty of such Person, as
the case may be; provided, however, that Senior Indebtedness shall not include:

            (1)   any obligation of such Person to any Subsidiary;

            (2)   any liability for Federal, state, local or other taxes owed or
                  owing by such Person;

            (3)   any accounts payable or other liability to trade creditors
                  arising in the ordinary course of business (including
                  Guarantees thereof or instruments evidencing such
                  liabilities);

            (4)   any Indebtedness or other Obligation (and any accrued and
                  unpaid interest in respect thereof) of such Person which is
                  subordinate or junior in any respect to any other Indebtedness
                  or other Obligation of such Person;

            (5)   that portion of any Indebtedness which at the time of
                  Incurrence is Incurred in violation of this Indenture; or

            (6)   any Preferred Stock or Disqualified Stock.

            "Senior Subordinated Indebtedness" means, with respect to a Person,
the Securities (in the case of the Company), the Subsidiary Guaranty (in the
case of a Subsidiary Guarantor) and any other Indebtedness of such Person that
specifically provides that such Indebtedness is to rank pari passu with the
Securities or such Subsidiary Guaranty, as the case may be, in right of payment
and is not subordinated by its terms in right of payment to any Indebtedness or
other obligation of such Person which is not Senior Indebtedness of such Person.

            "Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.

            "Special Mandatory Redemption Trigger" means the earliest to occur
of the following three events:

            (1)   June 30, 2004, if the acquisition of Cortez has not been
                  consummated by such date in conformity in all material
                  respects with the terms and with satisfaction of all material
                  conditions of the Cortez Agreement (after giving effect to any
                  amendment, waiver or modification to any term or

                                     - 33 -
<PAGE>

                  condition, which amendment, waiver or modification does not
                  have a material adverse effect on the holders of the
                  Securities);

            (2)   the abandonment of the acquisition of Cortez under the Cortez
                  Agreement; or

            (3)   the termination of the Cortez Agreement.

            "Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).

            "Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities
or a Subsidiary Guaranty of such Person, as the case may be, pursuant to a
written agreement to that effect.

            "Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by (1) such Person; (2) such Person and one or more
Subsidiaries of such Person; or (3) one or more Subsidiaries of such Person.
Unless otherwise specified, "Subsidiary" means a Subsidiary of the Company.

            "Subsidiary Guarantor" means each Subsidiary of the Company that
executes the Indenture as a guarantor on the Issue Date and each other
Subsidiary of the Company that thereafter guarantees the Securities pursuant to
the terms of the Indenture, in each case unless and until such subsidiary is
released from its obligations under its Subsidiary Guaranty pursuant to the
terms of the Indenture. As of the Issue Date, the Subsidiary Guarantors are EAP
Energy, Inc., EAP Energy Services, L.P., EAP Operating, Inc., EAP Properties,
Inc., Encore Operating, L.P. and Encore Louisiana Operating LLC.

            "Subsidiary Guaranty" means a Guarantee by a Subsidiary Guarantor of
the Company's obligations with respect to the Securities.

            "Temporary Cash Investments" means any of the following:

            (1)   any investment in direct obligations of the United States of
                  America or any agency thereof or obligations guaranteed by the
                  United States of America or any agency thereof;

            (2)   investments in demand accounts and time deposit accounts,
                  bankers acceptances, overnight bank deposits, certificates of
                  deposit and money market deposits maturing within twelve
                  months of the date of acquisition thereof issued by a bank or

                                     - 34 -
<PAGE>

                  trust company which is organized under the laws of the United
                  States of America, any State thereof or any foreign country
                  recognized by the United States of America, and which bank or
                  trust company has capital, surplus and undivided profits
                  aggregating in excess of $50.0 million (or the foreign
                  currency equivalent thereof) and has outstanding debt which is
                  rated "A" (or such similar equivalent rating) or higher by at
                  least one nationally recognized statistical rating
                  organization (as defined in Rule 436 under the Securities Act)
                  or any money-market fund sponsored by a registered broker
                  dealer or mutual fund distributor;

            (3)   investments in deposits available for withdrawal on demand
                  with any commercial bank that is organized under the laws of
                  any country in which the Company or any Restricted Subsidiary
                  maintains an office or is engaged in the Oil and Gas Business,
                  provided that (i) all such deposits have been made in such
                  accounts in the ordinary course of business and (ii) such
                  deposits do not at any one time exceed $10.0 million in the
                  aggregate;

            (4)   repurchase (or reverse repurchase) obligations with a term of
                  not more than 30 days for underlying securities of the types
                  described in clause (1) above entered into with a bank meeting
                  the qualifications described in clause (2) above;

            (5)   investments in commercial paper, maturing not more than 90
                  days after the date of acquisition, issued by a corporation
                  (other than an Affiliate of the Company) organized and in
                  existence under the laws of the United States of America or
                  any foreign country recognized by the United States of America
                  with a rating at the time as of which any investment therein
                  is made of "P-1" (or higher) according to Moody's or "A-1" (or
                  higher) according to S&P; and

            (6)   investments in securities with maturities of six months or
                  less from the date of acquisition issued or fully guaranteed
                  by any state, commonwealth or territory of the United States
                  of America, or by any political subdivision or taxing
                  authority thereof, and rated at least "A" by S&P or "A" by
                  Moody's.

            "TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. sections 77aaa-77bbbb) as in effect on the date of this Indenture.

            "Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two Business Days prior
to the date fixed for redemption or, in the case of defeasance, prior to the
date of deposit (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the then
remaining average life to April 15, 2009 or, in the case of defeasance, to
maturity; provided, however, that if the average life to April 15, 2009 or
maturity, as the case may be, of the Securities is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the

                                     - 35 -
<PAGE>

Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the average
life to April 15, 2009 or maturity, as the case may be, of the Securities is
less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.

            "Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.

            "Trust Officer" means the Chairman of the Board, the President or
any other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

            "Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.

            "Unrestricted Subsidiary" means:

            (1)   any Subsidiary of the Company that at the time of
                  determination shall be designated an Unrestricted Subsidiary
                  by the Board of Directors in the manner provided below; and

            (2)   any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries own any Capital Stock or
Indebtedness of, or holds any Lien on any property of, the Company or any other
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided, however, that either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under Section
4.04. In the case of any designation by the Company of a Person as an
Unrestricted Subsidiary on the first day that such Person is a Subsidiary of the
Company in accordance with the provisions of this Indenture, such designation
shall be deemed to have occurred for all purposes of this Indenture
simultaneously with, and automatically upon, such Person becoming a Subsidiary.

            The Board of Directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation (A) the Company could Incur $1.00 of additional
Indebtedness under Section 4.03(a) and (B) no Default shall have occurred and be
continuing. Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.

            "U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and

                                     - 36 -
<PAGE>

credit of the United States of America is pledged and which are not callable at
the issuer's option.

            "Volumetric Production Payments" means production payment
obligations recorded as deferred revenue in accordance with GAAP, together with
all undertakings and obligations in connection therewith.

            "Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.

            "Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company or one or more Wholly Owned Subsidiaries.

            SECTION 1.02. Other Definitions.

<TABLE>
<CAPTION>
                                                                                     Defined
                                       Term                                          in Section
                                       ----                                          ----------
<S>                                                                                  <C>
"Affiliate Transaction".........................................................     4.07
"Bankruptcy Law"................................................................     6.01
"Cash Consideration"............................................................     4.06(a)(2)
"Change of Control Offer".......................................................     4.08(b)
"covenant defeasance option"....................................................     8.01(b)
"Custodian".....................................................................     6.01
"Event of Default"..............................................................     6.01
"Guaranteed Obligation".........................................................     11.01
"Investment Grade Rating".......................................................     4.13
"legal defeasance option".......................................................     8.01(b)
"Legal Holiday".................................................................     13.08
"Offer".........................................................................     4.06(b)
"Offer Amount"..................................................................     4.06(c)(2)
"Offer Period"..................................................................     4.06(c)(2)
"Paying Agent"..................................................................     2.03
"Purchase Date".................................................................     4.06(c)(1)
"Registrar".....................................................................     2.03
"Special Mandatory Redemption"..................................................     3.03
"Successor Company".............................................................     5.01
"Suspended Covenants"...........................................................     4.13
</TABLE>

            SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:

            "Commission" means the SEC;

                                     - 37 -
<PAGE>

            "indenture securities" means the Securities;

            "indenture security holder" means a Securityholder;

            "indenture to be qualified" means this Indenture;

            "indenture trustee" or "institutional trustee" means the Trustee;
and

            "obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.

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

            SECTION 1.04. Rules of Construction. Unless the context otherwise
            requires:

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

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

            (3)   "or" is not exclusive;

            (4)   "including" means including without limitation;

            (5)   words in the singular include the plural and words in the
                  plural include the singular;

            (6)   unsecured Indebtedness shall not be deemed to be subordinate
                  or junior to Secured Indebtedness merely by virtue of its
                  nature as unsecured Indebtedness;

            (7)   the principal amount of any noninterest bearing or other
                  discount security at any date shall be the principal amount
                  thereof that would be shown on a balance sheet of the issuer
                  dated such date prepared in accordance with GAAP;

            (8)   the principal amount of any Preferred Stock shall be (i) the
                  maximum liquidation value of such Preferred Stock or (ii) the
                  maximum mandatory redemption or mandatory repurchase price
                  with respect to such Preferred Stock, whichever is greater;
                  and

            (9)   all references to the date the Securities were originally
                  issued shall refer to the Issue Date.

                                     - 38 -
<PAGE>

                                   ARTICLE 2

                                 The Securities

            SECTION 2.01. Form and Dating. Provisions relating to the Initial
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Rule 144A/Regulation S Appendix attached hereto (the "Appendix"),
which is hereby incorporated in and expressly made part of this Indenture. The
Initial Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to the Appendix, which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities, the Private Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rules,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in the Appendix and Exhibit A are part of the terms of this
Indenture.

            SECTION 2.02. Execution and Authentication. Two Officers shall sign
the Securities for the Company by manual or facsimile signature. The Company's
seal shall be impressed, affixed, imprinted or reproduced on the Securities and
may be in facsimile form.

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

            A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.

            On the Issue Date, the Trustee shall authenticate and deliver $150
million of 6.25% Senior Subordinated Notes Due 2014, and, at any time and from
time to time thereafter, the Trustee shall authenticate and deliver Securities
for original issue in an aggregate principal amount specified in such order, in
each case upon a written order of the Company signed by two Officers or by an
Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company. Such order shall specify the amount of the Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated and, in the case of an issuance of Additional Securities pursuant
to Section 2.13 after the Issue Date, shall certify that such issuance is in
compliance with Section 4.03.

            The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.

                                     - 39 -
<PAGE>

            SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.

            The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.

            The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.

            SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal of and interest on any Security, the Company shall deposit
with the Paying Agent a sum sufficient to pay such principal and interest when
so becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed by the Paying Agent. Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.

            SECTION 2.05. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.

            SECTION 2.06. Transfer and Exchange. The Securities shall be issued
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of this Indenture
and Section 8-401(a) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Securities of other denominations, the Registrar
shall make the exchange as requested if the same requirements are met.

                                     - 40 -
<PAGE>

            SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.

            Every replacement Security is an additional obligation of the
            Company.

            SECTION 2.08. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.

            If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.

            If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may be,
and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.

            SECTION 2.09. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.

            SECTION 2.10. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation.

                                     - 41 -
<PAGE>

            SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.

            SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities
may use numbers assigned by the Committee on Uniform Securities Identification
Procedures ("CUSIP") and corresponding International Securities Identification
Numbers ("ISIN") (if then generally in use) and, if so, the Trustee shall use
CUSIP numbers and corresponding "ISIN's" (if then generally in use) in notices
of redemption as a convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company shall promptly notify
the Trustee of any change in the CUSIP or ISIN numbers.

            SECTION 2.13. Issuance of Additional Securities. The Company shall
be entitled, subject to its compliance with Section 4.03, to issue Additional
Securities under this Indenture which shall have identical terms as the Initial
Securities issued on the Issue Date, other than with respect to the date of
issuance and issue price. The Initial Securities issued on the Issue Date, any
Additional Securities and all Exchange Securities or Private Exchange Securities
issued in exchange therefor shall be treated as a single class for all purposes
under this Indenture.

            With respect to any Additional Securities, the Company shall set
forth in a resolution of the Board of Directors and an Officers' Certificate, a
copy of each which shall be delivered to the Trustee, the following information:

            (1)   the aggregate principal amount of such Additional Securities
                  to be authenticated and delivered pursuant to this Indenture;

            (2)   the issue price, the issue date and the CUSIP number of such
                  Additional Securities; provided, however, that no Additional
                  Securities may be issued at a price that would cause such
                  Additional Securities to have "original issue discount" within
                  the meaning of Section 1273 of the Code; and

            (3)   whether such Additional Securities shall be Transfer
                  Restricted Securities and issued in the form of Initial
                  Securities as set forth in the Appendix to this Indenture or
                  shall be issued in the form of Exchange Securities as set
                  forth in Exhibit A.

                                     - 42 -
<PAGE>

                                   ARTICLE 3

                                   Redemption

            SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraphs 5 or 7 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.

            The Company shall give each notice to the Trustee provided for in
this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.

            SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee in its
sole discretion shall deem to be fair and appropriate and in accordance with
methods generally used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from outstanding Securities
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000. Securities and portions of them the Trustee selects shall be in
principal amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.

            SECTION 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder's registered address, except that a notice of a Special
Mandatory Redemption shall be as set forth in Section 3.07.

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

            (1)   the redemption date;

            (2)   the redemption price;

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

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

            (5)   if fewer than all the outstanding Securities are to be
                  redeemed, the identification and principal amounts of the
                  particular Securities to be redeemed;

                                     - 43 -
<PAGE>

            (6)   that, unless the Company defaults in making such redemption
                  payment or the Paying Agent is prohibited from making such
                  payment pursuant to the terms of this Indenture, interest on
                  Securities (or portion thereof) called for redemption ceases
                  to accrue on and after the redemption date; and

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

            At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.

            SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date). Failure to give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder.

            SECTION 3.05. Deposit of Redemption Price. Prior to the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all Securities
to be redeemed on that date other than Securities or portions of Securities
called for redemption which have been delivered by the Company to the Trustee
for cancellation.

            SECTION 3.06. Securities Redeemed in Part. Upon surrender and
cancellation of a Security that is redeemed in part, the Company shall execute
and the Trustee shall authenticate for the Holder (at the Company's expense) a
new Security equal in principal amount to the unredeemed portion of the Security
surrendered.

            SECTION 3.07. Special Mandatory Redemption. Following the occurrence
of a Special Mandatory Redemption Trigger, the Company shall redeem the
Securities as a whole (the "Special Mandatory Redemption"), upon notice as
provided in this Section 3.07, at a redemption price equal to 100% of the
aggregate principal amount thereof plus accrued and unpaid interest to the
redemption date. Notwithstanding the provisions of Section 3.03, notice of such
mandatory redemption shall be given within five Business Days of the date of the
Special Mandatory Redemption Trigger by first-class mail, postage prepaid,
mailed not less than 15 nor more than 30 days prior to the redemption date, to
the Escrow Agent and to each Holder, at such Holder's address appearing in the
Security Register, and such notice shall state:

            (1)   that the Special Mandatory Redemption Trigger has occurred;

            (2)   the redemption date, which shall be on or before July 30,
                  2004;

            (3)   the redemption price;

                                     - 44 -
<PAGE>

            (4)   that on the redemption date the redemption price will become
                  due and payable upon each Security to be redeemed and that
                  interest thereon will cease to accrue on and after such date;
                  and

            (5)   the place or places where each Security is to be surrendered
                  for payment of the redemption price.

      Any notice of redemption given pursuant to this Article 3 may be modified
by the Company to conform with the applicable requirements of the Depositary if
any of the Securities subject to such notice are then represented by one or more
Global Securities.

                                   ARTICLE 4

                                    Covenants

SECTION 4.01.     Payment of Securities.

            (a) The Company shall promptly pay the principal of and interest on
the Securities on the dates and in the manner provided in the Securities and in
this Indenture. Principal and interest shall be considered paid on the date due
if on such date the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent, as the case may be, is not prohibited from paying
such money to the Securityholders on that date pursuant to the terms of this
Indenture.

            (b) The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

            SECTION 4.02. SEC Reports. Notwithstanding that the Company may not
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the SEC (to the extent the SEC will accept such
filings) and provide the Trustee and Securityholders with such annual reports
and such information, documents and other reports as are specified in Sections
13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to
such Sections (but, without exhibits in the case of the Securityholders), such
information, documents and other reports to be so filed and provided at the
times specified for the filings of such information, documents and reports under
such Sections. In addition, the Company shall furnish to the Holders of the
Securities and to prospective investors, upon the requests of such Holders, any
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act so long as the Securities are not freely transferable under the
Securities Act. The Company also shall comply with the other provisions of TIA
section 314(a).

            SECTION 4.03. Limitation on Indebtedness.

            (a)   The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided,
however, that the Company and the Subsidiary Guarantors will be entitled to
Incur Indebtedness if, on the date of such Incurrence and after giving effect
thereto on a pro forma basis, no Default has occurred and is continuing and the
Consolidated Coverage Ratio exceeds 2.5 to 1.

                                     - 45 -
<PAGE>

            (b) Notwithstanding the foregoing Section 4.03(a), the Company and
the Restricted Subsidiaries shall be entitled to Incur any or all of the
following Indebtedness:

            (1)   Indebtedness Incurred by the Company and its Restricted
                  Subsidiaries pursuant to Credit Facilities; provided, however,
                  that, immediately after giving effect to any such Incurrence,
                  the aggregate principal amount of all Indebtedness Incurred
                  under this clause (1) and then outstanding does not exceed the
                  greater of (A) $300 million less the sum of all principal
                  payments since the Issue Date with respect to such
                  Indebtedness pursuant to Section 4.06(a)(3)(A) and (B) $150
                  million plus 20% of ACNTA as of the date of such Incurrence;

            (2)   Indebtedness owed to and held by the Company or a Restricted
                  Subsidiary; provided, however, that (A) any subsequent
                  issuance or transfer of any Capital Stock which results in any
                  such Restricted Subsidiary ceasing to be a Restricted
                  Subsidiary or any subsequent transfer of such Indebtedness
                  (other than to the Company or a Wholly Owned Subsidiary) shall
                  be deemed, in each case, to constitute the Incurrence of such
                  Indebtedness by the obligor thereon and (B) if the Company or
                  a Subsidiary Guarantor is the obligor on such Indebtedness,
                  unless such Indebtedness is owing to the Company or a
                  Subsidiary Guarantor, such Indebtedness is expressly
                  subordinated to the prior payment in full in cash of all
                  obligations with respect to the Securities;

            (3)   the Securities including the Exchange Securities (but
                  excluding any Additional Securities) and all Subsidiary
                  Guaranties;

            (4)   Indebtedness outstanding on the Issue Date (other than
                  Indebtedness described in clause (1), (2) or (3) of this
                  Section 4.03(b));

            (5)   Indebtedness of a Restricted Subsidiary Incurred and
                  outstanding on or prior to the date on which such Subsidiary
                  became a Restricted Subsidiary or was acquired by the Company
                  (other than Indebtedness Incurred in connection with, or to
                  provide all or any portion of the funds or credit support
                  utilized to consummate, the transaction or series of related
                  transactions pursuant to which such Subsidiary became a
                  Restricted Subsidiary or was acquired by the Company);
                  provided, however, that on the date such Subsidiary became a
                  Restricted Subsidiary or was acquired by the Company and after
                  giving pro forma effect thereto, the Company would have been
                  able to Incur at least $1.00 of additional Indebtedness
                  pursuant to Section 4.03(a);

            (6)   Refinancing Indebtedness in respect of Indebtedness Incurred
                  pursuant to Section 4.03(a) or pursuant to clause (3), (4), or
                  (5) of this Section 4.03(b) or this clause (6); provided,
                  however, that to the extent such Refinancing Indebtedness
                  directly or indirectly Refinances Indebtedness of a Restricted
                  Subsidiary Incurred pursuant to clause (5) of this Section
                  4.03(b), such

                                     - 46 -
<PAGE>

                  Refinancing Indebtedness shall be Incurred only by such
                  Restricted Subsidiary;

            (7)   Hedging Obligations consisting of Interest Rate Agreements
                  directly related to Indebtedness outstanding on the Issue Date
                  or permitted to be Incurred by the Company and its Restricted
                  Subsidiaries pursuant to this Indenture;

            (8)   Hedging Obligations consisting of Oil and Natural Gas Hedging
                  Contracts and Currency Agreements entered into in the ordinary
                  course of business for the purpose of limiting risks that
                  arise in the ordinary course of business of the Company and
                  its Subsidiaries;

            (9)   Indebtedness in respect of performance, bid and surety bonds,
                  including Guarantees and letters of credit functioning as or
                  supporting such performance, bid and surety bonds, completion
                  guarantees and other reimbursement obligations provided by the
                  Company or any Restricted Subsidiary in the ordinary course of
                  business (in each case other than for an obligation for money
                  borrowed);

            (10)  Indebtedness arising from the honoring by a bank or other
                  financial institution of a check, draft or similar instrument
                  drawn against insufficient funds in the ordinary course of
                  business; provided, however, that such Indebtedness is
                  extinguished within two Business Days of its Incurrence;

            (11)  Indebtedness consisting of any Guarantee by the Company or a
                  Subsidiary Guarantor of Indebtedness of the Company or a
                  Subsidiary Guarantor outstanding on the Issue Date or
                  permitted by this Indenture to be Incurred by the Company or a
                  Subsidiary Guarantor;

            (12)  Indebtedness represented by Capital Lease Obligations,
                  mortgage financings or purchase money obligations, in each
                  case, Incurred for the purpose of financing all or any part of
                  the purchase price, cost of construction or improvement or
                  carrying cost of assets used in the business of the Company
                  and its Restricted Subsidiaries and related financing costs,
                  and Refinancing Indebtedness Incurred to Refinance any
                  Indebtedness Incurred pursuant to this clause, in an aggregate
                  principal amount at any one time outstanding not to exceed
                  $25.0 million;

            (13)  Indebtedness arising from any agreement providing for
                  indemnities, Guarantees, purchase price adjustments,
                  holdbacks, contingency payment obligations based on the
                  performance of the acquired or disposed assets or similar
                  obligations (other than Guarantees of Indebtedness) Incurred
                  by any Person in connection with the acquisition or
                  disposition of assets;

            (14)  Indebtedness in respect of in-kind obligations relating to net
                  oil or natural gas balancing positions arising in the ordinary
                  course of business;

                                     - 47 -
<PAGE>

            (15)  Non-Recourse Purchase Money Indebtedness Incurred by the
                  Company and any Subsidiary Guarantors; provided, however, that
                  immediately after giving effect to any such Incurrence, the
                  aggregate principal amount of all Non-Recourse Purchase Money
                  Indebtedness Incurred under this clause (15) and then
                  outstanding does not exceed $25.0 million; and

            (16)  Indebtedness of the Company or of any of its Restricted
                  Subsidiaries in an aggregate principal amount which, when
                  taken together with all other Indebtedness of the Company and
                  its Restricted Subsidiaries outstanding on the date of such
                  Incurrence (other than Indebtedness permitted by clauses (1)
                  through (15) of this Section 4.03(b) or Section 4.03(a)) does
                  not exceed $40.0 million of which not more than $20.0 million
                  may be Indebtedness of Restricted Subsidiaries that are not
                  Subsidiary Guarantors.

            (c)   Notwithstanding the foregoing, neither the Company nor any
Subsidiary Guarantor will incur any Indebtedness pursuant to Section 4.03(b) if
the proceeds thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations of the Company or any Subsidiary Guarantor unless such
Indebtedness shall be subordinated to the Securities or the applicable
Subsidiary Guaranty to at least the same extent as such Subordinated
Obligations.

            (d)   For purposes of determining compliance with this Section 4.03:

            (1)   any Indebtedness remaining outstanding under the Revolving
                  Credit Facility after the application of the net proceeds from
                  the sale of the Securities will be treated as Incurred on the
                  Issue Date under Section 4.03(b)(1);

            (2)   in the event that an item of Indebtedness (or any portion
                  thereof) meets the criteria of more than one of the types of
                  Indebtedness described above, or is entitled to be incurred in
                  compliance with the Consolidated Coverage Ratio in Section
                  4.03(a), the Company, in its sole discretion, may classify
                  such item of Indebtedness (or any portion thereof) in any
                  manner that complies with this Section 4.03 and will only be
                  required to include the amount and type of such Indebtedness
                  in one of the above clauses; and

            (3)   the Company will be entitled to divide and classify an item of
                  Indebtedness in more than one of the types of Indebtedness
                  described above or as having been incurred in compliance with
                  the Consolidated Coverage Ratio in Section 4.03(a).

            (e)   Notwithstanding Sections 4.03(a) and (b), neither the Company
nor any Subsidiary Guarantor will Incur any Indebtedness if such Indebtedness is
subordinate or junior in ranking in right of payment to any Senior Indebtedness
of such Person, as applicable, unless such Indebtedness is Senior Subordinated
Indebtedness or is expressly subordinated in right of payment to Senior
Subordinated Indebtedness of such Person.

                                     - 48 -
<PAGE>

            SECTION 4.04. Limitation on Restricted Payments.

            (a)   The Company shall not, and shall not permit any Restricted
Subsidiary, directly or indirectly, to make a Restricted Payment if at the time
the Company or such Restricted Subsidiary makes such Restricted Payment:

            (1)   a Default shall have occurred and be continuing (or would
                  result therefrom);

            (2)   the Company is not entitled to Incur an additional $1.00 of
                  Indebtedness pursuant to Section 4.03(a); or

            (3)   the aggregate amount of such Restricted Payment and all other
                  Restricted Payments since the Issue Date would exceed the sum
                  of (without duplication):

                  (A)   50% of the Consolidated Net Income accrued during the
                        period (treated as one accounting period) from the
                        beginning of the fiscal quarter immediately following
                        the fiscal quarter during which the Issue Date occurs to
                        the end of the most recent fiscal quarter for which
                        financial statements of the Company are publicly
                        available prior to the date of such Restricted Payment
                        (or, in case such Consolidated Net Income shall be a
                        deficit, minus 100% of such deficit); plus

                  (B)   100% of the aggregate Net Cash Proceeds or the fair
                        market value of property other than cash (including
                        Capital Stock of Persons engaged in the Oil and Gas
                        Business or assets used in the Oil and Gas Business)
                        received by the Company from the issuance or sale of its
                        Capital Stock (other than Disqualified Stock) subsequent
                        to the Issue Date (other than an issuance or sale to a
                        Subsidiary of the Company and other than an issuance or
                        sale to an employee stock ownership plan or to a trust
                        established by the Company or any of its Subsidiaries
                        for the benefit of their employees) and 100% of any cash
                        capital contribution, or the fair market value of
                        property other than cash, received by the Company from
                        its shareholders subsequent to the Issue Date; plus

                  (C)   the aggregate Net Cash Proceeds received by the Company
                        subsequent to the Issue Date from the issuance or sale
                        of its Capital Stock (other than Disqualified Stock) to
                        an employee stock ownership plan or to a trust
                        established by the Company or any of its Subsidiaries
                        for the benefit of their employees; provided, however,
                        that if such employee stock ownership plan or trust
                        Incurs any Indebtedness to finance the purchase of such
                        Capital Stock, such aggregate amount shall be limited to
                        the excess of such Net Cash Proceeds over the amount of
                        such Indebtedness plus an

                                     - 49 -
<PAGE>

                        amount equal to any increase in the Consolidated Net
                        Worth of the Company resulting from principal repayments
                        made from time to time by such employee stock ownership
                        plan or trust with respect to such Indebtedness; plus

                  (D)   the amount by which Indebtedness of the Company or any
                        Restricted Subsidiary is reduced on the Company's
                        consolidated balance sheet upon the conversion or
                        exchange subsequent to the Issue Date of any
                        Indebtedness of the Company or any Restricted Subsidiary
                        convertible or exchangeable for Capital Stock (other
                        than Disqualified Stock) of the Company (less the amount
                        of any cash, or the fair value of any other property,
                        distributed by the Company upon such conversion or
                        exchange); provided, however, that the foregoing amount
                        shall not exceed the Net Cash Proceeds received by the
                        Company or any Restricted Subsidiary from the sale of
                        such Indebtedness (excluding Net Cash Proceeds from
                        sales to a Subsidiary of the Company or to an employee
                        stock ownership plan or to a trust established by the
                        Company or any of its Subsidiaries for the benefit of
                        their employees); plus

                  (E)   an amount equal to the sum of (x) the net reduction in
                        the Investments (other than Permitted Investments) made
                        by the Company or any Restricted Subsidiary in any
                        Person (including any Unrestricted Subsidiary) resulting
                        from repurchases, repayments or redemptions of such
                        Investments by such Person, proceeds realized on the
                        sale of such Investment and proceeds representing the
                        return of capital (excluding dividends and
                        distributions), in each case received by the Company or
                        any Restricted Subsidiary, and (y) to the extent such
                        Person is an Unrestricted Subsidiary, the portion
                        (proportionate to the Company's equity interest in such
                        Subsidiary) of the fair market value of the net assets
                        of such Unrestricted Subsidiary at the time such
                        Unrestricted Subsidiary is designated a Restricted
                        Subsidiary; provided, however, that to the extent the
                        foregoing sum exceeds, in the case of any such Person or
                        Unrestricted Subsidiary, the amount of Investments
                        (excluding Permitted Investments) previously made (and
                        treated as a Restricted Payment) by the Company or any
                        Restricted Subsidiary in such Person or Unrestricted
                        Subsidiary, such excess shall not be included in this
                        clause (E) unless the amount represented by such excess
                        has not been and will not be taken into account in one
                        of the foregoing clauses (A), (B), (C) or (D); plus

                  (F)   $25.0 million.

                                     - 50 -
<PAGE>

                  (b)   The preceding provisions will not prohibit:

                  (1)   any Restricted Payment made out of the Net Cash Proceeds
                        of the substantially concurrent issuance or sale of, or
                        made by conversion into or exchange for, Capital Stock
                        of the Company (other than Disqualified Stock and other
                        than Capital Stock issued or sold to a Subsidiary of the
                        Company or an employee stock ownership plan or to a
                        trust established by the Company or any of its
                        Subsidiaries for the benefit of their employees) or a
                        substantially concurrent cash capital contribution
                        received by the Company from one or more of its
                        shareholders; provided, however, that (A) such
                        Restricted Payment shall be excluded in the calculation
                        of the amount of Restricted Payments under Section
                        4.04(a)(3) and (B) the Net Cash Proceeds from such sale
                        or such cash capital contribution (to the extent so used
                        for such Restricted Payment) shall be excluded from the
                        calculation of amounts under Section 4.04(a)(3)(B);

                  (2)   any purchase, repurchase, redemption, defeasance or
                        other acquisition or retirement for value of
                        Subordinated Obligations of the Company or any
                        Subsidiary Guarantor made by exchange for, or out of the
                        proceeds of the substantially concurrent Incurrence or
                        sale of, Indebtedness which is permitted to be Incurred
                        pursuant to Section 4.03; provided, however, that such
                        purchase, repurchase, redemption, defeasance or other
                        acquisition or retirement for value shall be excluded in
                        the calculation of the amount of Restricted Payments
                        under Section 4.04(a)(3);

                  (3)   any purchase, repurchase, redemption, defeasance or
                        other acquisition or retirement for value of
                        Disqualified Stock of the Company or a Subsidiary
                        Guarantor made by conversion into or exchange for, or
                        out of the proceeds of the substantially concurrent
                        issuance or sale (other than to a Subsidiary of the
                        Company or an employee stock ownership plan or to a
                        trust established by the Company or any of its
                        Subsidiaries for the benefit of their employees) of,
                        Disqualified Stock of the Company which is permitted to
                        be issued pursuant to Section 4.03; provided, however,
                        that such purchase, repurchase, redemption, defeasance
                        or other acquisition or retirement for value shall be
                        excluded in the calculation of the amount of Restricted
                        Payments under Section 4.04(a)(3);

                  (4)   dividends paid within 60 days after the date of
                        declaration thereof if at such date of declaration such
                        dividend would have complied with this Section 4.04;
                        provided, however, that at the time of payment of such
                        dividend, no other Default shall have occurred and be
                        continuing (or result therefrom); provided further,
                        however, that such dividend shall be included in the
                        calculation of the amount of Restricted Payments under
                        Section 4.04(a)(3) at the time of payment;

                  (5)   so long as no Default has occurred and is continuing,
                        the purchase, redemption or other acquisition or
                        retirement for value of shares of Capital

                                     - 51 -
<PAGE>

                        Stock of the Company or any of its Subsidiaries from
                        employees, former employees, directors or former
                        directors of the Company or any of its Subsidiaries (or
                        the respective heirs, estates or permitted transferees
                        of such employees, former employees, directors or former
                        directors), pursuant to the terms of the agreements
                        (including employment agreements) or plans (or
                        amendments thereto) approved by the Board of Directors
                        under which such individuals purchase or sell or are
                        granted the option to purchase or sell, shares of such
                        Capital Stock; provided, however, that the aggregate
                        amount of such purchases, redemptions and other
                        acquisitions and retirements (excluding amounts
                        representing cancellation of Indebtedness) shall not
                        exceed $2.0 million in any calendar year; provided
                        further, however, that such purchases, redemptions and
                        other acquisitions and retirements shall be excluded in
                        the calculation of the amount of Restricted Payments
                        under Section 4.04(a)(3);

                  (6)   repurchases, acquisitions or retirements of shares of
                        Company common stock deemed to occur upon the exercise
                        of stock options or similar rights issued under employee
                        benefit plans when shares are surrendered to pay all or
                        a portion of the exercise price or to satisfy any
                        federal income tax obligations; provided, however, that
                        such repurchases, acquisitions or retirements shall be
                        excluded in the calculation of the amount of Restricted
                        Payments under Section 4.04(a)(3);

                  (7)   the payment of cash in lieu of fractional shares of
                        Capital Stock in connection with any transaction
                        otherwise permitted under this Section 4.04; provided,
                        however, that such payment will be excluded in the
                        calculation of the amount of Restricted Payments under
                        Section 4.04(a)(3);

                  (8)   payments to dissenting stockholders (x) pursuant to
                        applicable law or (y) in connection with the settlement
                        or other satisfaction of legal claims made pursuant to
                        or in connection with a consolidation, merger or
                        transfer of assets in connection with a transaction that
                        is not prohibited by this Indenture; provided, however,
                        that such payments will be included in the calculation
                        of the amount of Restricted Payments under Section
                        4.04(a)(3).

                  (9)   upon the occurrence of a Change of Control or an Asset
                        Disposition and within 60 days after the completion of
                        the offer to repurchase the Securities pursuant to
                        Sections 4.06 or 4.08, (including the purchase of all
                        Securities tendered), any purchase, repurchase,
                        redemption, defeasance, acquisition or other retirement
                        for value of Subordinated Obligations required pursuant
                        to the terms thereof as a result of such Change of
                        Control or Asset Disposition at a purchase or redemption
                        price not to exceed 101% of the outstanding principal
                        amount thereof, plus accrued and unpaid interest
                        thereon, if any; provided, however, that (A) at the time
                        of such purchase, repurchase, redemption, defeasance or
                        other acquisition

                                     - 52 -
<PAGE>

                        or retirement for value, no Default shall have occurred
                        and be continuing (or would result therefrom), and (B)
                        such purchase, repurchase, redemption, defeasance or
                        other acquisition and retirement for value will be
                        excluded in the calculation of the amount of Restricted
                        Payments under Section 4.04(a)(3).

            The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the assets proposed
to be transferred by the Company or such Restricted Subsidiary, as the case may
be, in accordance with the Restricted Payment.

            For purposes of determining compliance with this Section 4.04, in
the event that a Restricted Payment meets the criteria of more than one of the
types of Restricted Payments described above, the Company, in its sole
discretion, may order and classify such Restricted Payment in any manner in
compliance with this Section 4.04.

            SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or (c) transfer any of its property or assets to the Company, except:

            (1)   with respect to clauses (a), (b) and (c),

                  (A)   any encumbrance or restriction pursuant to an agreement
                        governing Indebtedness or Capital Stock and other
                        agreements or instruments in effect at or entered into
                        on the Issue Date;

                  (B)   any encumbrance or restriction with respect to a
                        Restricted Subsidiary pursuant to an agreement relating
                        to any Indebtedness Incurred by such Restricted
                        Subsidiary or Capital Stock or other agreement or
                        instrument of such Restricted Subsidiary in existence on
                        or prior to the date on which such Restricted Subsidiary
                        was acquired by the Company or otherwise became a
                        Restricted Subsidiary (other than Indebtedness Incurred,
                        Capital Stock issued or agreements or instruments
                        entered into as consideration in, or to provide all or
                        any portion of the funds or credit support utilized to
                        consummate, the transaction or series of related
                        transactions pursuant to which such Restricted
                        Subsidiary became a Restricted Subsidiary or was
                        acquired by the Company) and outstanding on such date;

                  (C)   any encumbrance or restriction pursuant to an agreement
                        effecting a Refinancing in whole or in part of
                        Indebtedness Incurred pursuant to an agreement referred
                        to in subclause (A) or (B) of

                                     - 53 -
<PAGE>

                        clause (1) of this Section 4.05 or this subclause (C) or
                        subclause (B) of clause (2) of this Section 4.05 or
                        contained in any amendment to, or modification,
                        restatement, renewal, increase, supplement, replacement
                        or extension of, an agreement referred to in subclause
                        (A) or (B) of clause (1) of this Section 4.05 or this
                        clause (C) or subclause (B) of clause (2) of this
                        Section 4.05; provided, however, that the encumbrances
                        and restrictions with respect to such Restricted
                        Subsidiary contained in any such refinancing agreement
                        or amendment, modification, restatement, renewal,
                        increase, supplement, replacement or extension agreement
                        are not materially more restrictive, taken as a whole,
                        than encumbrances and restrictions with respect to such
                        Restricted Subsidiary contained in such predecessor
                        agreements;

                  (D)   any customary encumbrance or restriction with respect to
                        a Restricted Subsidiary imposed pursuant to a merger
                        agreement or an agreement entered into for the sale or
                        disposition of all or substantially all the Capital
                        Stock or assets of such Restricted Subsidiary pending
                        the closing of such sale or disposition;

                  (E)   customary encumbrances and restrictions contained in
                        agreements of the types described in the definition of
                        the term "Permitted Business Investments;" and

                  (F)   customary supermajority voting provisions and other
                        customary provisions with respect to the disposition or
                        distribution of assets, each contained in corporate
                        charters, bylaws, stockholders' agreements, limited
                        liability company agreements, partnership agreements,
                        joint venture agreements and other similar agreements
                        entered into in the ordinary course of business of the
                        Company and its Restricted Subsidiaries; and

            (2)   with respect to clause (c) only,

                  (A)   any such encumbrance or restriction consisting of
                        customary nonassignment provisions (including provisions
                        forbidding subletting or sublicensing) in leases
                        governing leasehold interests and licenses to the extent
                        such provisions restrict the transfer of the lease or
                        license or the property leased, or licensed thereunder;

                  (B)   any encumbrance or restriction contained in credit
                        agreements, security agreements or mortgages securing
                        Indebtedness of the Company or a Restricted Subsidiary
                        or in Production Payments and Reserve Sales, to the
                        extent such encumbrance or restriction restricts the
                        transfer of the property subject to such credit
                        agreements, security agreements or mortgages or
                        Production Payments and Reserve Sales;

                                     - 54 -
<PAGE>

                  (C)   encumbrances and restrictions contained in any
                        agreement, instrument or Capital Stock assumed by the
                        Company or any of its Restricted Subsidiaries or for
                        which any of them becomes liable as in effect at the
                        time of such transaction (except to the extent such
                        agreement, instrument or Capital Stock was entered into
                        in connection with or in contemplation of such
                        transaction), which encumbrances and restrictions are
                        not applicable to any assets other than assets acquired
                        in connection with such transaction and all
                        improvements, additions and accessions thereto and
                        products and proceeds thereof;

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

                  (E)   encumbrances and restrictions contained in contracts
                        entered into in the ordinary course of business, not
                        relating to any Indebtedness, and that do not,
                        individually or in the aggregate, detract from the value
                        of, or from the ability of the Company and the
                        Restricted Subsidiaries to realize the value of,
                        property or assets of the Company or any Restricted
                        Subsidiary in any manner material to the Company or any
                        Restricted Subsidiary;

                  (F)   restrictions on the transfer of property or assets
                        required by any regulatory authority having jurisdiction
                        over the Company or such Restricted Subsidiary; and

                  (G)   customary restrictions contained in asset sale
                        agreements limiting the transfer of such assets pending
                        the closing of such sale.

            SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.

            (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Disposition unless:

            (1)   the Company or such Restricted Subsidiary receives
                  consideration at the time of such Asset Disposition at least
                  equal to the fair market value (including as to the value of
                  all non-cash consideration) (as determined in good faith by
                  the Board of Directors, an Officer or an officer of such
                  Restricted Subsidiary with responsibility for such
                  transaction, which determination shall be conclusive evidence
                  of compliance with this provision), of the shares and assets
                  subject to such Asset Disposition;

            (2)   at least 75% of the consideration thereof received by the
                  Company or such Restricted Subsidiary is in the form of cash
                  or cash equivalents, Additional Assets or any combination
                  thereof (collectively, the "Cash Consideration"); and

                                     - 55 -
<PAGE>

            (3)   an amount equal to 100% of the Net Available Cash from such
                  Asset Disposition is applied by the Company (or such
                  Restricted Subsidiary, as the case may be):

                  (A)   first, to the extent the Company elects (or is required
                        by the terms of any Indebtedness), to prepay, repay,
                        redeem or purchase Senior Indebtedness of the Company or
                        any Subsidiary Guarantor or Indebtedness (other than any
                        Disqualified Stock) of a Wholly Owned Subsidiary that is
                        not a Subsidiary Guarantor (in each case other than
                        Indebtedness owed to the Company or an Affiliate of the
                        Company) within one year from the later of the date of
                        such Asset Disposition or the receipt of such Net
                        Available Cash;

                  (B)   second, to the extent of the balance of such Net
                        Available Cash after application in accordance with
                        clause (A), to the extent the Company elects, to acquire
                        Additional Assets or to make capital expenditures in the
                        Oil and Gas Business within one year from the later of
                        the date of such Asset Disposition or the receipt of
                        such Net Available Cash; and

                  (C)   third, to the extent of the balance of such Net
                        Available Cash after application in accordance with
                        clauses (A) and (B), to make an offer to the holders of
                        the Securities (and to holders of other Senior
                        Subordinated Indebtedness of the Company designated by
                        the Company) to purchase Securities (and such other
                        Senior Subordinated Indebtedness of the Company)
                        pursuant to and subject to the conditions contained in
                        this Indenture;

                  provided, however, that in connection with any prepayment,
                  repayment, purchase, repurchase, redemption, defeasance or
                  other acquisition or retirement for value of Indebtedness
                  pursuant to clause (A) or (C) above, the Company or such
                  Restricted Subsidiary shall permanently retire such
                  Indebtedness and shall cause the related loan commitment (if
                  any) to be permanently reduced in an amount equal to the
                  principal amount so prepaid, repaid or purchased.

            Upon any Asset Disposition by an Oil and Gas Royalty Trust in which
the Company or any Restricted Subsidiary owns Capital Stock, the Company or such
Restricted Subsidiary will apply the Net Available Cash therefrom as provided in
Section 4.06(a)(3).

            Notwithstanding the foregoing provisions of this Section 4.06, the
Company and the Restricted Subsidiaries will not be required to apply any Net
Available Cash in accordance with this Section 4.06 except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which is not
applied in accordance with this Section 4.06 exceeds $20.0 million. Pending
application of Net Available Cash pursuant to this Section 4.06, such Net
Available Cash shall be invested in Temporary Cash Investments or applied to
temporarily reduce revolving credit indebtedness.

                                     - 56 -
<PAGE>

            For the purposes of this Section 4.06, the following are deemed to
be cash or cash equivalents:

            (1)   any liabilities, as shown on the Company's or such Restricted
                  Subsidiary's most recent consolidated balance sheet, of the
                  Company or any Restricted Subsidiary (other than contingent
                  liabilities and liabilities that are by their terms
                  subordinated to the Securities or any Subsidiary Guaranty)
                  that are assumed by the transferee of any such assets pursuant
                  to (1) a customary novation agreement that releases the
                  Company or such Restricted Subsidiary from further liability
                  or (2) an assignment agreement that includes, in lieu of such
                  a release, the agreement of the transferee or its parent
                  company to indemnify and hold harmless the Company or such
                  Restricted Subsidiary from and against any loss, liability or
                  cost in respect of such assumed liability (provided, however,
                  that such indemnifying party (or its long-term debt
                  securities) shall have an Investment Grade Rating (with no
                  indication of a negative outlook or credit watch with negative
                  implications, in any case, that contemplates such indemnifying
                  party (or its long-term debt securities) failing to have an
                  Investment Grade Rating) at the time the indemnity is entered
                  into);

            (2)   any non-Cash Consideration received by the Company or any
                  Restricted Subsidiary from the transferee that is converted,
                  monetized, sold or exchanged by the Company or such Restricted
                  Subsidiary into cash or cash equivalents within 120 days of
                  receipt.

            Notwithstanding the foregoing, the 75% limitation referred to in
Section 4.06(a)(2) shall be deemed satisfied with respect to any Asset
Disposition in which the cash or cash equivalents portion of the consideration
received therefrom, determined in accordance with the foregoing provision on an
after-tax basis, is equal to or greater than what the after-tax proceeds would
have been had such Asset Disposition complied with the aforementioned 75%
limitation.

            The requirement of Section 4.06(a)(3)(B) shall be deemed to be
satisfied if an agreement (including a lease, whether a capital lease or an
operating lease) committing to make the acquisitions or expenditures referred to
therein is entered into by the Company or its Restricted Subsidiary within the
time period specified in such clause and such Net Available Cash is subsequently
applied in accordance with such agreement within six months following such
agreement.

            (b)   In the event of an Asset Disposition that requires the
purchase of Securities (and other Senior Subordinated Indebtedness of the
Company) pursuant to Section 4.06(a)(3)(C), the Company shall make such offer to
purchase Securities (an "Offer") on or before the 366th day after the date of
such Asset Disposition or the receipt of such Net Available Cash, and shall
purchase Securities tendered pursuant to an offer by the Company for the
Securities (and such other Senior Subordinated Indebtedness of the Company) at a
purchase price of 100% of their principal amount (or, in the event such other
Senior Subordinated Indebtedness of the Company was issued with significant
original issue discount, 100% of the

                                     - 57 -
<PAGE>

accreted value thereof) without premium, plus accrued but unpaid interest (or,
in respect of such other Senior Subordinated Indebtedness of the Company, such
lesser price, if any, as may be provided for by the terms of such Senior
Subordinated Indebtedness of the Company) in accordance with the procedures
(including prorating in the event of oversubscription) set forth in this
Indenture. If the aggregate purchase price of the securities tendered exceeds
the Net Available Cash allotted to their purchase, the Company will select the
securities to be purchased on a pro rata basis but in round denominations, which
in the case of the Securities will be denominations of $1,000 principal amount
or multiples thereof. The Company shall not be required to make such an offer to
purchase Securities (and other Senior Subordinated Indebtedness of the Company)
pursuant to this Section 4.06 if the Net Available Cash not applied or invested
as provided in Section 4.06(a)(3)(A) or (B) is less than $20.0 million (which
lesser amount shall be carried forward for purposes of determining whether such
an offer is required with respect to the Net Available Cash from any subsequent
Asset Disposition). Upon completion of such an offer to purchase, Net Available
Cash will be deemed to be reduced by the aggregate amount of such offer.

            (c)   (1) Promptly, and in any event within 10 days after the
Company becomes obligated to make an Offer, the Company shall deliver to the
Trustee and send, by first-class mail to each Holder, a written notice stating
that the Holder may elect to have his Securities purchased by the Company either
in whole or in part (subject to prorating as described in Section 4.06(b) in the
event the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date") and shall contain such information concerning the business
of the Company which the Company in good faith believes will enable such Holders
to make an informed decision (which at a minimum will include (A) the most
recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of the Company, the most recent subsequently filed
Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the Company
filed subsequent to such Quarterly Report, other than Current Reports describing
Asset Dispositions otherwise described in the information furnished with such
notice (or corresponding successor reports), (B) a description of material
developments in the Company's business subsequent to the date of the latest of
such Reports, and (C) if material, appropriate pro forma financial information)
and all instructions and materials necessary to tender Securities pursuant to
the Offer, together with the information contained in clause (3).

            (2)   Not later than the date upon which written notice of an Offer
is delivered to the Trustee as provided below, the Company shall deliver to the
Trustee an Officers' Certificate as to (A) the amount of the Offer (the "Offer
Amount"), including information as to any other Senior Subordinated Indebtedness
included in the Offer, (B) the allocation of the Net Available Cash from the
Asset Dispositions pursuant to which such Offer is being made and (C) the
compliance of such allocation with the provisions of Section 4.06(a) and (b). On
such date, the Company shall also irrevocably deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust) in Temporary Cash Investments, maturing on the last day prior
to the Purchase Date or on the Purchase Date if funds are immediately available
by open of business, an amount equal to the Offer Amount to be held for payment
in accordance with the provisions of this Section. If the Offer includes other
Senior Subordinated Indebtedness, the deposit described in the preceding
sentence may be made with

                                     - 58 -
<PAGE>

any other paying agent pursuant to arrangements satisfactory to the Trustee.
Upon the expiration of the period for which the Offer remains open (the "Offer
Period"), the Company shall deliver to the Trustee for cancellation the
Securities or portions thereof which have been properly tendered to and are to
be accepted by the Company. The Trustee shall, on the Purchase Date, mail or
deliver payment (or cause the delivery of payment) to each tendering Holder in
the amount of the purchase price. In the event that the aggregate purchase price
of the Securities delivered by the Company to the Trustee is less than the Offer
Amount applicable to the Securities, the Trustee shall deliver the excess to the
Company immediately after the expiration of the Offer Period for application in
accordance with this Section 4.06.

            (3)   Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased. Holders whose Securities are purchased
only in part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.

            (4)   At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section 4.06. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.

            (d)   The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.06. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.06, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section by virtue of its
compliance with such securities laws or regulations.

            SECTION 4.07. Limitation on Affiliate Transactions.

            (a)   The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into any transaction (including the purchase, sale, lease
or exchange of any property, employee compensation arrangements or the rendering
of any service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction") unless:

            (1)   the terms of the Affiliate Transaction are no less favorable
                  to the Company or such Restricted Subsidiary than those that
                  could reasonably be expected to be obtained at the time of the
                  Affiliate Transaction in arm's-length dealings with a Person
                  who is not an Affiliate;

                                     - 59 -
<PAGE>

            (2)   if such Affiliate Transaction involves an amount in excess of
                  $10.0 million, the terms of the Affiliate Transaction are set
                  forth in writing and a majority of the non-employee directors
                  of the Company disinterested with respect to such Affiliate
                  Transaction have determined in good faith that the criteria
                  set forth in clause (1) are satisfied and have approved the
                  relevant Affiliate Transaction as evidenced by a resolution of
                  the Board of Directors; and

            (3)   if such Affiliate Transaction involves an amount in excess of
                  $25.0 million, the Board of Directors shall also have received
                  a written opinion from an Independent Qualified Party to the
                  effect that such Affiliate Transaction is fair, from a
                  financial standpoint, to the Company and its Restricted
                  Subsidiaries or is not less favorable to the Company and its
                  Restricted Subsidiaries than could reasonably be expected to
                  be obtained at the time in an arm's-length transaction with a
                  Person who was not an Affiliate.

            (b)   Section 4.07(a) will not prohibit:

            (1)   any Investment (other than a Permitted Investment) or other
                  Restricted Payment, in each case not prohibited to be made
                  pursuant to Section 4.04;

            (2)   any issuance of securities, or other payments, awards or
                  grants in cash, securities or otherwise pursuant to, or the
                  funding of, employment and severance arrangements, stock
                  options and stock ownership plans, phantom stock or other
                  incentive plans approved by the Board of Directors;

            (3)   loans or advances to officers, directors and employees in the
                  ordinary course of business of the Company or its Restricted
                  Subsidiaries, but in any event not to exceed $3.0 million in
                  the aggregate outstanding at any one time;

            (4)   any transaction with a Restricted Subsidiary or joint venture
                  or similar entity which would constitute an Affiliate
                  Transaction solely because the Company or a Restricted
                  Subsidiary owns an equity interest in or otherwise controls
                  such Restricted Subsidiary, joint venture or similar entity;

            (5)   the issuance or sale of any Capital Stock (other than
                  Disqualified Stock) of the Company;

            (6)   reasonable fees and reasonable compensation paid to, and
                  indemnity and similar arrangements provided on behalf of,
                  officers, directors and employees of the Company or any
                  Restricted Subsidiary as determined in good faith by the Board
                  of Directors or the Company's senior management; and

                                     - 60 -
<PAGE>

            (7)   any agreement as in effect on the Issue Date or any
                  renewals, extensions or replacements of any such agreement (so
                  long as such renewals, extensions or replacements are not less
                  favorable to the Company or the Restricted Subsidiaries than
                  the original agreement in effect on the Issue Date) and the
                  transactions evidenced thereby.

            SECTION 4.08. Change of Control.

            (a)   Upon the occurrence of a Change of Control, then unless the
Company shall have exercised its right to redeem all the Securities each Holder
shall have the right to require that the Company repurchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal amount
thereof on the date of purchase plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date), in
accordance with the terms contemplated in Section 4.08(b). In the event that at
the time of such Change of Control the terms of the Senior Indebtedness of the
Company (including the Revolving Credit Facility) restrict or prohibit the
repurchase of Securities following such Change of Control, then prior to the
mailing of the notice to Holders provided for in Section 4.08(b) below but in
any event within 30 days following any Change of Control, the Company shall (1)
repay in full all such Senior Indebtedness or (ii) obtain the requisite consents
under the agreements governing such Senior Indebtedness to permit the repurchase
of the Securities as provided for in Section 4.08(b).

            (b)   Unless the Company has exercised its right to redeem all the
Securities and shall have delivered irrevocable notice of redemption to the
Trustee, within 30 days following any Change of Control, the Company shall mail
a notice to each Holder with a copy to the Trustee (the "Change of Control
Offer") stating:

            (1)   that a Change of Control has occurred and that such Holder has
      the right to require the Company to purchase such Holder's Securities at a
      purchase price in cash equal to 101% of the principal amount thereof on
      the date of purchase plus accrued and unpaid interest, if any, to the date
      of purchase (subject to the right of Holders of record on the relevant
      record date to receive interest on the relevant interest payment date);

            (2)   the circumstances and relevant facts regarding such Change of
      Control (including information with respect to pro forma historical
      income, cash flow and capitalization, each after giving effect to such
      Change of Control);

            (3)   the purchase date (which shall be no earlier than 30 days nor
      later than 60 days from the date such notice is mailed); and

            (4)   the instructions, as determined by the Company, consistent
      with this Section 4.08, that a Holder must follow in order to have its
      Securities purchased.

            (c)   Holders electing to have a Security purchased will be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date, a telegram, telex, facsimile transmission or letter setting
forth the

                                      -61-
<PAGE>

name of the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.

            (d)   On the purchase date, all Securities purchased by the Company
under this Section 4.08 shall be delivered by the Company to the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.

            (e)   Notwithstanding the foregoing provisions of this Section 4.08,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Indenture applicable to a Change of Control Offer made by the Company
and purchases all Securities validly tendered and not withdrawn under such
Change of Control Offer.

            (f)   The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.08, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.08 by virtue of its
compliance with such securities laws or regulations.

            SECTION 4.09. Limitation on Liens. The Company shall not, and shall
not permit any Subsidiary Guarantor to, directly or indirectly, create, incur,
assume or suffer to exist or become effective any Lien securing Indebtedness of
any kind except for Permitted Liens, on or with respect to any of its assets,
whether owned at the Issue Date or thereafter acquired, unless (A) in the case
of any Lien securing Subordinated Obligations, the Securities are secured by a
Lien on such assets that is senior in priority to such Lien and (B) in the case
of any other Lien, the Securities are either secured equally and ratably with
such Indebtedness or are secured by a Lien on such assets that is senior in
priority to such Lien.

            SECTION 4.10. Future Guarantors. The Company shall cause each
Restricted Subsidiary that Incurs any Indebtedness (other than Indebtedness
Incurred pursuant to and in compliance with the last clause of Section
4.03(b)(16)) to, at the same time, execute and deliver to the Trustee a Guaranty
Agreement pursuant to which such Restricted Subsidiary will Guarantee payment of
the Securities on the same terms and conditions as those set forth in this
Indenture.

            SECTION 4.11. Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA Section 314(a)(4).

                                      -62-
<PAGE>

            SECTION 4.12. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

            SECTION 4.13. Suspension of Covenants.

            (a)   During any period that the Securities have an Investment Grade
Rating and no Default has occurred and is continuing, the Company and the
Restricted Subsidiaries shall not be subject to Sections 4.03(a), (b), (c) or
(d), 4.04, 4.05, 4.06, 4.07, 4.10 or 5.01(a)(3) (collectively, the "Suspended
Covenants").

            (b)   In the event that the Company and the Restricted Subsidiaries
are not subject to the Suspended Covenants for any period of time as a result of
Section 4.13(a), and subsequently one or both of S&P and Moody's downgrades the
rating assigned to the Securities below BBB-, in the case of S&P, and below
Baa3, in the case of Moody's, then the Company and the Restricted Subsidiaries
will thereafter again be subject to the Suspended Covenants (subject to
subsequent suspension if the Securities again receive an Investment Grade
Rating), and, with respect to Restricted Payments proposed to be made after the
time of such downgrade, the permissibility of such proposed Restricted Payments
will be calculated in accordance with Section 4.04 as though Section 4.04 had
been in effect since the Issue Date.

                                   ARTICLE 5

                                Successor Company

            SECTION 5.01. When Company May Merge or Transfer Assets.

            (a)   The Company shall not consolidate with or merge with or into,
or convey, transfer or lease, in one transaction or a series of transactions,
directly or indirectly, all or substantially all the assets of the Company and
its Restricted Subsidiaries, taken as a whole, to, any Person, unless:

            (1)   the resulting, surviving or transferee Person (the "Successor
      Company") shall be a Person organized and existing under the laws of the
      United States of America, any State thereof or the District of Columbia
      and the Successor Company (if not the Company) 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 Company
      under the Securities and this Indenture;

            (2)   immediately after giving pro forma effect to such transaction
      (and treating any Indebtedness which becomes an obligation of the
      Successor Company or any Subsidiary as a result of such transaction as
      having been Incurred by such Successor Company or such Subsidiary at the
      time of such transaction), no Default shall have occurred and be
      continuing;

            (3)   immediately after giving pro forma effect to such transaction,
      the Successor Company would be able to Incur an additional $1.00 of
      Indebtedness pursuant to Section 4.03(a);

                                      -63-
<PAGE>

            (4)   the Company shall have delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that such
      consolidation, merger, conveyance, transfer or lease and such supplemental
      indenture (if any) comply with this Indenture; and

            (5)   the Company shall have delivered to the Trustee an Opinion of
      Counsel to the effect that the Holders will recognize income, gain or loss
      for Federal income tax purposes as a result of such transaction and will
      not be subject to Federal income tax on the same amounts, in the same
      manner and at the same times as would have been the case if such
      transaction had not occurred;

provided, however, that Section 5.01(a)(3) will not be applicable (A) to the
Company or a Restricted Subsidiary consolidating with, merging into, conveying,
transferring or leasing all or part of its properties and assets to the Company
or a Subsidiary Guarantor, (B) to the Company merging with an Affiliate of the
Company solely for the purpose and with the sole effect of reincorporating the
Company in another jurisdiction or (C) at a time when the Company and its
Restricted Subsidiaries are not subject to the Suspended Covenants.

            For purposes of this Section 5.01, the sale, lease, conveyance,
assignment, transfer or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.

            The Successor Company (if not the Company) shall be the successor to
the Company and shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture, and the predecessor
Company, except in the case of a lease, shall be released from the obligation to
pay the principal of and interest on the Securities.

            (b)   The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or series of transactions, all or substantially all of its assets to
any Person unless: (1) except in the case of a Subsidiary Guarantor (other than
Encore Operating, L.P. and any Subsidiary Guarantor that directly or indirectly
holds an equity interest in Encore Operating, L.P.) that has been disposed of in
its entirety to another Person (other than to the Company or an Affiliate of the
Company), whether through a merger, consolidation or sale of Capital Stock or
assets, if in connection therewith the Company complies with its obligations
under Section 4.06 in respect of such disposition, the resulting, surviving or
transferee Person (if not such Subsidiary) shall be a Person organized and
existing under the laws of the jurisdiction under which such Subsidiary was
organized or under the laws of the United States of America, or any State
thereof or the District of Columbia, and, if such Person is not already a
Subsidiary Guarantor, such Person shall expressly assume, by a Guaranty
Agreement, in a form satisfactory to the Trustee, all the obligations of such
Subsidiary, if any, under its Subsidiary Guaranty; (2) immediately after giving
effect to such transaction or transactions on a pro forma basis (and treating
any Indebtedness which becomes an obligation of the resulting, surviving or
transferee Person as a result of such transaction as having been issued by such
Person at the time of such transaction),

                                      -64-
<PAGE>

no Default shall have occurred and be continuing; and (3) in the event a
Guaranty Agreement is executed and delivered pursuant to clause (1) above, the
Company delivers to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer or
lease and such Guaranty Agreement, if any, complies with this Indenture.

                                   ARTICLE 6

                              Defaults and Remedies

            SECTION 6.01. Events of Default. An "Event of Default" occurs if:

            (1)   the Company defaults in any payment of interest on any
      Security when the same becomes due and payable, whether or not such
      payment shall be prohibited by Article 10, and such default continues for
      a period of 30 days;

            (2)   the Company defaults in the payment of the principal of any
      Security when the same becomes due and payable at its Stated Maturity,
      upon optional redemption, upon declaration of acceleration or otherwise,
      whether or not such payment shall be prohibited by Article 10;

            (3)   the Company fails to comply with Section 3.07 or 5.01;

            (4)   the Company fails to comply with Section 4.02, 4.03, 4.04,
      4.05, 4.06, 4.07, 4.08, or 4.10 (other than a failure to purchase
      Securities when required under Section 4.06 or 4.08) and such failure
      continues for 30 days after the notice specified below;

            (5)   the Company or any Subsidiary Guarantor fails to comply with
      any of its agreements in this Indenture (other than those referred to in
      clause (1), (2), (3) or (4) above) and such failure continues for 60 days
      after the notice specified below;

            (6)   Indebtedness of the Company, any Subsidiary Guarantor or any
      Significant Subsidiary (other than Non-Recourse Purchase Money
      Indebtedness) is not paid within any applicable grace period after final
      maturity or is accelerated by the holders thereof because of a default and
      the total amount of such Indebtedness unpaid or accelerated exceeds $10.0
      million; provided, that if such default is cured or waived or any such
      acceleration is rescinded, or such Indebtedness is repaid, within a period
      of 10 days from the continuance of such default beyond the applicable
      grace period or the occurrence of such acceleration, as the case may be,
      such Event of Default and any consequential acceleration of the Securities
      shall be automatically rescinded, so long as such rescission does not
      conflict with any judgment or decree;

            (7)   the Company, any Subsidiary Guarantor or any Significant
      Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

                  (A)   commences a voluntary case;

                                      -65-
<PAGE>

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

                  (C)   consents to the appointment of a Custodian of it or for
            any substantial part of its property; or

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

      or takes any comparable action under any foreign laws relating to
      insolvency;

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

                  (A)   is for relief against the Company, any Subsidiary
            Guarantor or any Significant Subsidiary in an involuntary case;

                  (B)   appoints a Custodian of the Company, any Subsidiary
            Guarantor or any Significant Subsidiary or for any substantial part
            of its property; or

                  (C)   orders the winding up or liquidation of the Company, any
            Subsidiary Guarantor or any Significant Subsidiary;

      or any similar relief is granted under any foreign laws and the order or
      decree remains unstayed and in effect for 60 days; or

            (9)   any judgment or decree for the payment of money in excess of
      $10.0 million above the coverage under applicable insurance policies and
      indemnities as to which the relevant insurer or indemnitor has not
      disclaimed responsibility is entered against the Company, a Subsidiary
      Guarantor or any Significant Subsidiary, remains outstanding for a period
      of 60 consecutive days following such judgment or decree and is not
      discharged, waived or stayed (the "judgment default provision"); or

            (10)  a Subsidiary Guaranty ceases to be in full force and effect
      (other than in accordance with the terms of such Subsidiary Guaranty) for
      five days after notice or a Subsidiary Guarantor denies or disaffirms its
      obligations under its Subsidiary Guaranty (the "Guaranty Failure
      Provision").

            The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
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.

            The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.

            A Default under clauses (4), (5) or (10) is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount of the
outstanding Securities notify the

                                      -66-
<PAGE>

Company of the Default and the Company does not cure such Default within the
time specified after receipt of such notice. Such notice must specify the
Default, demand that it be remedied and state that such notice is a "Notice of
Default".

            The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.

            SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the outstanding Securities by
notice to the Company and the Trustee, may declare the principal of and accrued
but unpaid interest on all the Securities to be due and payable. Upon such a
declaration, such principal and interest shall be due and payable immediately.
If an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company occurs, the principal of and interest on all the Securities shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Securityholders. The Holders of a majority
in principal amount of the Securities by notice to the Trustee may rescind an
acceleration and its consequences if (i) the rescission would not conflict with
any judgment or decree and (ii) if all existing Events of Default have been
cured or waived except nonpayment of principal or interest that has become due
solely because of acceleration. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.

            SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.

            The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.

            SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities then outstanding (including consents obtained
in connection with a tender offer or exchange for the Securities) by notice to
the Trustee may waive an existing Default with respect to all of the Securities
and its consequences (including, without limitation, waivers obtained in
connection with a tender offer or exchange offer for, or purchases of,
Securities or a solicitations of consents in respect of the Securities) except
(i) a Default in the payment of the principal of or interest on a Security, (ii)
a Default arising from the failure to redeem or purchase any Security when
required pursuant to this Indenture or (iii) a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each
Securityholder affected. When a Default is waived, it is deemed cured and shall
cease to exist,

                                      -67-
<PAGE>

but no such waiver shall extend to any subsequent or other Default or impair any
consequent right.

            SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.

            SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:

            (1)   the Holder gives to the Trustee written notice stating that an
      Event of Default is continuing;

            (2)   the Holders of at least 25% in principal amount of the
      outstanding Securities make a request to the Trustee to pursue the remedy;

            (3)   such Holder or Holders offer to the Trustee reasonable
      security or indemnity against any loss, liability or expense;

            (4)   the Trustee does not comply with the request within 60 days
      after receipt of the request and the offer of security or indemnity; and

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

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

            SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.

            SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.

                                      -68-
<PAGE>

            SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.

            SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:

            FIRST: to the Trustee for amounts due under Section 7.07;

            SECOND: to holders of Senior Indebtedness of the Company and, if
      such money or property has been collected from a Subsidiary Guarantor, to
      holders of Senior Indebtedness of such Subsidiary Guarantor, in each case
      to the extent required by Articles 10 and 12;

            THIRD: to Securityholders for amounts due and unpaid on the
      Securities for principal and interest, ratably, without preference or
      priority of any kind, according to the amounts due and payable on the
      Securities for principal and interest, respectively; and

            FOURTH: to the Company.

            The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.

            SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Securities.

            SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede

                                      -69-
<PAGE>

the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.

                                    ARTICLE 7

                                     Trustee

            SECTION 7.01. Duties of Trustee.

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

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

            (1)   the Trustee undertakes to perform such duties and only such
      duties as are specifically set forth in this Indenture and no implied
      covenants or obligations shall be read into this Indenture against the
      Trustee; and

            (2)   in the absence of bad faith on its part, the Trustee may
      conclusively rely, as to the truth of the statements and the correctness
      of the opinions expressed therein, upon certificates or opinions furnished
      to the Trustee and conforming to the requirements of this Indenture.
      However, the Trustee shall examine the certificates and opinions to
      determine whether or not they conform to the requirements of this
      Indenture.

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

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

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

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

            (d)   Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.

            (e)   The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.

            (f)   Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.

                                      -70-
<PAGE>

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

            (h)   Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.

            SECTION 7.02. Rights of Trustee.

            (a)   The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document, but may accept
the same as conclusive evidence of the truth and accuracy of such statement or
the correctness of such opinions.

            (b)   Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.

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

            (d)   The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute willful misconduct or negligence.

            (e)   The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.

            SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.

            SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.

                                      -71-
<PAGE>

            SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is not opposed to the interests of Securityholders.

            The Trustee shall not be required to take notice or be deemed to
have notice of any Event of Default, except failure of the Company to cause to
be made any required payment to the Trustee, unless the Trustee shall be
specifically notified of such default by the Company or by the Holders of at
least 25% in aggregate principal amount of all Securities then outstanding by a
notice delivered to the Corporate Trust Office of the Trustee and, in the
absence of such notice, the Trustee may conclusively assume no Default exists.

            SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each June 15 beginning with the June 15 following the date of
this Indenture, and in any event prior to August 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of June 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b).

            A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.

            SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own willful misconduct, negligence or bad faith. Neither the
Company nor any Guarantor need pay for any settlement made without its consent,
which consent will not be unreasonably withheld.

            To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.

                                      -72-
<PAGE>

            The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.

            SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company may remove the Trustee if:

            (1)   the Trustee fails to comply with Section 7.10;

            (2)   the Trustee is adjudged bankrupt or insolvent;

            (3)   a receiver or other public officer takes charge of the Trustee
      or its property; or

            (4)   the Trustee otherwise becomes incapable of acting.

            If the Trustee resigns, is removed by the Company or by the Holders
of a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.

            A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.

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

            If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

            Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.

            SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

                                      -73-
<PAGE>

            In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities 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 shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.

            SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall be a
corporation, bank or banking association organized and doing business under the
laws of the United States of America or any state that is authorized under such
laws to exercise corporate trustee power and shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA Section 310(b); provided,
however, that there shall be excluded from the operation of TIA Section
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.

            SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.

                                   ARTICLE 8

                       Discharge of Indenture; Defeasance

            SECTION 8.01. Discharge of Liability on Securities; Defeasance.

            (a)   When (1) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07) for
cancellation or (2) all outstanding Securities have become due and payable,
whether at maturity or on a redemption date as a result of the mailing of a
notice of redemption pursuant to Article 3 hereof and the Company irrevocably
deposits with the Trustee funds sufficient to pay at maturity or upon redemption
all outstanding Securities, including interest thereon to maturity or such
redemption date (other than Securities replaced pursuant to Section 2.07), and
if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 8.01(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company.

            (b)   Subject to Sections 8.01(c) and 8.02, the Company at any time
may terminate (1) all its obligations under the Securities and this Indenture
("legal defeasance option") or (2) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08 and 4.09 and

                                      -74-
<PAGE>

the operation of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but,
in the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries and Subsidiary Guarantors) and the limitations contained in
Sections 5.01(a)(3) ("covenant defeasance option"). The Company may exercise its
legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option.

            If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and 6.01(8), with respect only to Significant Subsidiaries and
Subsidiary Guarantors) or because of the failure of the Company to comply with
Section 5.01(a)(3). If the Company exercises its legal defeasance option or its
covenant defeasance option, each Subsidiary Guarantor, if any, shall be released
from all its obligations with respect to its Subsidiary Guaranty.

            Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.

            (c)   Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.

            SECTION 8.02. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:

            (1)   the Company irrevocably deposits in trust (the "defeasance
      trust") with the Trustee money or U.S. Government Obligations for the
      payment of principal of and interest on the Securities to maturity or
      redemption, as the case may be;

            (2)   the Company delivers to the Trustee a certificate from a
      nationally recognized firm of independent accountants expressing their
      opinion that the payments of principal and interest when due and without
      reinvestment on the deposited U.S. Government Obligations plus any
      deposited money without investment will provide cash at such times and in
      such amounts as will be sufficient to pay principal and interest when due
      on all the Securities to maturity or redemption, as the case may be;

            (3)   123 days pass after the deposit is made and during the 123-day
      period no Default specified in Sections 6.01(7) or (8) with respect to the
      Company occurs which is continuing at the end of the 123-day period;

            (4)   the deposit does not constitute a default under any other
      agreement binding on the Company and is not prohibited by Article 10;

                                      -75-
<PAGE>

            (5)   the Company delivers to the Trustee an Opinion of Counsel to
      the effect that the trust resulting from the deposit does not constitute,
      or is qualified as, a regulated investment company under the Investment
      Company Act of 1940;

            (6)   in the case of the legal defeasance option, the Company shall
      have delivered to the Trustee an Opinion of Counsel stating that (A) the
      Company has received from, or there has been published by, the Internal
      Revenue Service a ruling, or (B) since the date of this Indenture there
      has been a change in the applicable Federal income tax law, in either case
      to the effect that, and based thereon such Opinion of Counsel shall
      confirm that, the Securityholders will not recognize income, gain or loss
      for Federal income tax purposes as a result of such defeasance and will be
      subject to Federal income tax on the same amounts, in the same manner and
      at the same times as would have been the case if such defeasance had not
      occurred;

            (7)   in the case of the covenant defeasance option, the Company
      shall have delivered to the Trustee an Opinion of Counsel to the effect
      that the Securityholders will not recognize income, gain or loss for
      Federal income tax purposes as a result of such covenant defeasance and
      will be subject to Federal income tax on the same amounts, in the same
      manner and at the same times as would have been the case if such covenant
      defeasance had not occurred;

            (8)   the Company delivers to the Trustee an Opinion of Counsel in
      the jurisdiction or organization of the Company (if other than the United
      States) to the effect that (A) Holders will not recognize income, gain or
      loss for income tax purposes of such jurisdiction as a result of such
      deposit and defeasance, and will be subject to income tax of such
      jurisdiction on the same amounts, and in the same manner and at the same
      times as would have been the case if such deposit and defeasance had not
      occurred; and

            (9)   the Company delivers to the Trustee an Officers' Certificate
      and an Opinion of Counsel, each stating that all conditions precedent to
      the defeasance and discharge of the Securities as contemplated by this
      Article 8 have been complied with.

            Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.

            SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities. Money and securities
so held in trust are not subject to Article 10.

            SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.

            Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of

                                      -76-
<PAGE>

principal or interest that remains unclaimed for two years, and, thereafter,
Securityholders entitled to the money must look to the Company for payment as
general creditors.

            SECTION 8.05. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.

            SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities and the Subsidiary Guarantors' obligations under
their respective Guarantees shall be revived and reinstated as though no deposit
had occurred pursuant to this Article 8 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with this Article 8; provided, however, that, if the Company has made
any payment of interest on or principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.

                                   ARTICLE 9

                                   Amendments

            SECTION 9.01. Without Consent of Holders. Subject to Section 9.02 of
this Indenture, the Company, the Subsidiary Guarantors and the Trustee may amend
this Indenture or the Securities without notice to or consent of any
Securityholder:

            (1)   to cure any ambiguity, omission, defect or inconsistency;

            (2)   to comply with Article 5;

            (3)   to provide for uncertificated Securities in addition to or in
      place of certificated Securities; provided, however, that the
      uncertificated Securities are issued in registered form for purposes of
      Section 163(f) of the Code or in a manner such that the uncertificated
      Securities are described in Section 163(f)(2)(B) of the Code;

            (4)   to add Guarantees with respect to the Securities, including
      any Subsidiary Guaranties, to secure the Securities or to confirm the
      release, termination or discharge of any Subsidiary Guarantor or any such
      Lien when such release, termination or discharge is permitted under this
      Indenture;

            (5)   to add to the covenants of the Company or a Subsidiary
      Guarantor for the benefit of the Holders or to surrender any right or
      power herein conferred upon the Company or a Subsidiary Guarantor;

                                      -77-
<PAGE>

            (6)   to comply with any requirement of the SEC in connection with
      qualifying, or maintaining the qualification of, this Indenture under the
      TIA;

            (7)   to make any change that does not adversely affect in any
      material respect the rights of any Securityholder; or

            (8)   to conform the text of this Indenture or the Securities to any
      provision in the Offering Circular in the section "Description of the
      Notes" to the extent that such provision in the "Description of the Notes"
      was intended to be a verbatim recitation of a provision of this Indenture,
      the Guarantees or the Securities.

            However, no amendment may be made to the subordination provisions of
this Indenture that adversely affects the rights of any holder of Senior
Indebtedness of the Company or a Subsidiary Guarantor then outstanding unless
such holder of such Senior Indebtedness (or its Representative) consents to such
change or as otherwise permitted by the notes, debentures, bonds or other
similar instruments evidencing such Senior Indebtedness.

            The consent of the holders of the Securities is not necessary to
approve the particular form of any proposed amendment. It is sufficient if such
consent approves the substance of the proposed amendment.

            After an amendment under this Section 9.01 becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section 9.01.

            SECTION 9.02. With Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend or supplement this Indenture or the
Securities, or waive compliance in a particular instance by the Company with any
provisions hereof or thereof, without notice to any Securityholder but with the
written consent of the Holders of at least a majority in principal amount of the
Securities then outstanding (including consents obtained in connection with a
tender offer or exchange for the Securities). However, without the consent of
each Securityholder affected thereby, an amendment, supplement or waiver may not
(with respect to any Securities held by a non-consenting Holder):

            (1)   reduce the amount of Securities whose Holders must consent to
      an amendment, supplement or waiver;

            (2)   reduce the rate of or extend the time for payment of interest
      on any Security;

            (3)   reduce the principal amount of or extend the Stated Maturity
      of any Security;

            (4)   reduce the amount payable upon the redemption of any Security
      or change the time at which any Security may or is required to be redeemed
      in accordance with Article 3;

                                      -78-
<PAGE>

            (5)   make any Security payable in money other than that stated in
      the Security;

            (6)   impair the right of any Securityholder to receive payment of
      principal of and interest on such Securityholder's securities on or after
      the due dates therefor or to institute suit for the enforcement of any
      payment on or with respect to such Securityholder's Securities;

            (7)   make any change in Section 6.04 or 6.07 or the second sentence
      of this Section 9.02;

            (8)   make any change in the ranking or priority of any Security
      that would adversely affect the Securityholders; or

            (9)   make any change in any Subsidiary Guaranty that would
      adversely affect the Securityholders in any material respect.

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

            After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment, supplement or waiver. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment, supplement or waiver under this Section 9.02.

            SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in effect.

            SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment, a supplement or a waiver by a Holder of a Security
shall bind the Holder and every subsequent Holder of that Security or portion of
the Security that evidences the same debt as the consenting Holder's Security,
even if notation of the consent, supplement or waiver is not made on the
Security. However, any such Holder or subsequent Holder may revoke the consent
or waiver as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment, supplement or
waiver becomes effective. After an amendment, a supplement or waiver becomes
effective, it shall bind every Securityholder, unless it makes a change
described in any of clauses (1) through (9) of Section 9.02. In that case, the
amendment or waiver shall bind each Holder of a Security who has consented to it
and any subsequent Holder of such Security or any Security that evidences all or
any part of the same debt as the consenting Holder's Security. An amendment or
waiver becomes effective upon the execution of such amendment or waiver by the
Trustee.

            The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any

                                      -79-
<PAGE>

such action, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 120 days
after such record date.

            SECTION 9.05. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.

            SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.

            SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.

                                   ARTICLE 10

                                  Subordination

            SECTION 10.01. Agreement To Subordinate. The Company agrees, and
each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article 10, to the prior payment of all
Senior Indebtedness of the Company and that the subordination is for the benefit
of and enforceable by the holders of such Senior Indebtedness. The Securities
shall in all respects rank pari passu with all other Senior Subordinated
Indebtedness of the Company and only Indebtedness of the Company which is Senior
Indebtedness of the Company shall rank senior to the Securities in accordance
with the provisions set forth herein. All provisions of this Article 10 shall be
subject to Section 10.12.

                                      -80-
<PAGE>

            SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company to creditors upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:

            (1)   holders of Senior Indebtedness of the Company shall be
      entitled to receive payment in full in cash of such Senior Indebtedness
      before Securityholders shall be entitled to receive any payment of
      principal of or interest on the Securities; and

            (2)   until such Senior Indebtedness is paid in full in cash, any
      payment or distribution to which Securityholders would be entitled but for
      this Article 10 shall be made to holders of such Senior Indebtedness as
      their interests may appear, except that Securityholders may receive shares
      of stock and any debt securities that are subordinated to such Senior
      Indebtedness to at least the same extent as the Securities.

            SECTION 10.03. Default on Senior Indebtedness of the Company. The
Company shall not pay the principal of or interest on the Securities or make any
deposit pursuant to Section 8.01 and may not purchase, redeem or otherwise
retire any Securities (collectively, "pay the Securities") if either of the
following (a "Payment Default") occurs (1) any Obligation on any Designated
Senior Indebtedness of the Company is not paid in full in cash when due; or (2)
any other default on Designated Senior Indebtedness of the Company occurs and
the maturity of such Designated Senior Indebtedness is accelerated in accordance
with its terms unless, in either case, the Payment Default has been cured or
waived and any such acceleration has been rescinded or such Designated Senior
Indebtedness has been paid in full in cash; provided, however, that the Company
shall be entitled to pay the Securities without regard to the foregoing if the
Company and the Trustee receive written notice approving such payment from the
Representative of any Designated Senior Indebtedness with respect to which the
Payment Default has occurred and is continuing. During the continuance of any
default (other than a Payment Default) with respect to any Designated Senior
Indebtedness of the Company pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company shall not pay the Securities for a period (a "Payment
Blockage Period") commencing upon the receipt by the Trustee of (with a copy to
the Company) written notice (a "Blockage Notice") of such default from the
Representative of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter. The Payment
Blockage Period shall end earlier if such Payment Blockage Period is terminated
(1) by written notice to the Trustee and the Company from the Person or Persons
who gave such Blockage Notice; (2) because the default giving rise to such
Blockage Notice is cured, waived or otherwise no longer continuing; or (3)
because such Designated Senior Indebtedness has been discharged or repaid in
full in cash. Notwithstanding the provisions described in the immediately
preceding two sentences (but subject to the provisions contained in the first
sentence of this Section), unless the holders of such Designated Senior
Indebtedness or the Representative of such Designated Senior Indebtedness shall
have accelerated the maturity of such Designated Senior Indebtedness, the
Company shall be entitled to resume payments on the Securities after termination
of such Payment Blockage Period. The Securities shall not be subject to more
than one Payment Blockage Period in any consecutive 360-day period, irrespective
of the number of defaults with respect to Designated Senior Indebtedness of the

                                      -81-
<PAGE>

Company during such period, except that if any Blockage Notice is delivered to
the Trustee by or on behalf of holders of Designated Senior Indebtedness of the
Company (other than holders of the Bank Indebtedness), a Representative of
holders of Bank Indebtedness may give another Blockage Notice within such
period. However, in no event may the total number of days during which any
Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate
during any consecutive 360-day period, and there must be 181 days during any
consecutive 360-day period during which no Payment Blockage Period is in effect.
For purposes of this Section, no default or event of default which existed or
was continuing on the date of the commencement of any Payment Blockage Period
with respect to the Designated Senior Indebtedness of the Company initiating
such Payment Blockage Period shall be, or be made, the basis of the commencement
of a subsequent Payment Blockage Period by the Representative of such Designated
Senior Indebtedness unless such default or event of default shall have been
cured or waived for a period of not less than 90 consecutive days.

            SECTION 10.04. Acceleration of Payment of Securities. If payment of
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Designated Senior Indebtedness
of the Company (or their Representatives) of the acceleration.

            SECTION 10.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 10 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness of the Company and pay
it over to them as their interests may appear.

            SECTION 10.06. Subrogation. After all Senior Indebtedness of the
Company is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness. A
distribution made under this Article 10 to holders of such Senior Indebtedness
which otherwise would have been made to Securityholders is not, as between the
Company and Securityholders, a payment by the Company on such Senior
Indebtedness.

            SECTION 10.07. Relative Rights. This Article 10 defines the relative
rights of Securityholders and holders of Senior Indebtedness of the Company.
Nothing in this Indenture shall:

            (1)   impair, as between the Company and Securityholders, the
      obligation of the Company, which is absolute and unconditional, to pay
      principal of and interest on the Securities in accordance with their
      terms; or

            (2)   prevent the Trustee or any Securityholder from exercising its
      available remedies upon a Default, subject to the rights of holders of
      Senior Indebtedness of the Company to receive distributions otherwise
      payable to Securityholders.

            SECTION 10.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of the Company to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.

                                      -82-
<PAGE>

            SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.03, the Trustee or Paying Agent shall continue to make payments on
the Securities and shall not be charged with knowledge of the existence of facts
that under this Article 10 would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer of the Trustee receives notice satisfactory to it that such
payments are prohibited by this Article 10. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of the Company shall be entitled to give the notice; provided,
however, that, if an issue of Senior Indebtedness of the Company has a
Representative, only the Representative shall be entitled to give the notice.

            The Trustee in its individual or any other capacity shall be
entitled to hold Senior Indebtedness of the Company with the same rights it
would have if it were not Trustee. The Registrar and co-registrar and the Paying
Agent shall be entitled to do the same with like rights. The Trustee shall be
entitled to all the rights set forth in this Article 10 with respect to any
Senior Indebtedness of the Company which may at any time be held by it, to the
same extent as any other holder of such Senior Indebtedness; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 10 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.07.

            SECTION 10.10. Distribution or Notice to Representative. Whenever
any Person is to make a distribution or give a notice to holders of Senior
Indebtedness of the Company, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).

            SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the Securities by
reason of any provision in this Article 10 shall not be construed as preventing
the occurrence of a Default. Nothing in this Article 10 shall have any effect on
the right of the Securityholders or the Trustee to accelerate the maturity of
the Securities.

            SECTION 10.12. Trust Moneys and Escrow Funds Not Subordinated.
Notwithstanding anything contained herein to the contrary, payments from either
(i) money or the proceeds of U.S. Government Obligations held in trust under
Article 8 by the Trustee for the payment of principal of and interest on the
Securities or (ii) any funds received by the Trustee or Paying Agent from the
Escrow Agent following the Special Mandatory Redemption Trigger shall not be
subordinated to the prior payment of any Senior Indebtedness of the Company or
subject to the restrictions set forth in this Article 10, and none of the
Securityholders shall be obligated to pay over any such amount to the Company or
any holder of Senior Indebtedness of the Company or any other creditor of the
Company.

            SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (1) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (2) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the
Securityholders or (3) upon the Representatives of Senior Indebtedness of the
Company for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of

                                      -83-
<PAGE>

such Senior Indebtedness and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 10. In the event that
the Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness of the Company to
participate in any payment or distribution pursuant to this Article 10, the
Trustee shall be entitled to request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 10, and, if such evidence is not
furnished, the Trustee shall be entitled to defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 10.

            SECTION 10.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness of the Company as provided in this Article 10 and appoints
the Trustee as attorney-in-fact for any and all such purposes.

            SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness of the Company. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of the Company and shall
not be liable to any such holders if it shall mistakenly pay over or distribute
to Securityholders or the Company or any other Person, money or assets to which
any holders of Senior Indebtedness of the Company shall be entitled by virtue of
this Article 10 or otherwise.

            SECTION 10.16. Reliance by Holders of Senior Indebtedness of the
Company on Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness of the Company, whether such Senior Indebtedness was created or
acquired before or after the issuance of the Securities, to acquire and continue
to hold, or to continue to hold, such Senior Indebtedness and such holder of
such Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.

                                   ARTICLE 11

                              Subsidiary Guaranties

            SECTION 11.01. Guaranties. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture and the Securities and
(b) the full and punctual performance within applicable grace periods of all
other obligations of the Company under this Indenture and the Securities (all
the foregoing being hereinafter collectively called the "Guaranteed
Obligations"). Each Subsidiary Guarantor further agrees that the

                                      -84-
<PAGE>

Guaranteed Obligations may be extended or renewed, in whole or in part, without
notice or further assent from such Subsidiary Guarantor and that such Subsidiary
Guarantor will remain bound under this Article 11 notwithstanding any extension
or renewal of any Obligation.

            Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Guaranteed Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice
of any default under the Securities or the Guaranteed Obligations. The
obligations of each Subsidiary Guarantor hereunder shall not be affected by (a)
the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person under this
Indenture, the Securities or any other agreement or otherwise; (b) any extension
or renewal of any thereof; (c) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Indenture, the Securities or any other
agreement; (d) the release of any security held by any Holder or the Trustee for
the Guaranteed Obligations or any of them; (e) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Guaranteed Obligations; or (f) except as set forth in Section 11.06, any change
in the ownership of such Subsidiary Guarantor.

            Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Guaranteed Obligations.

            Except as expressly set forth in Sections 8.01(b), 11.02 and 11.06,
the obligations of each Subsidiary Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Subsidiary Guarantor herein shall not be
discharged or impaired or otherwise affected by the failure of any Holder or the
Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Securities or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the obligations, or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of such Subsidiary Guarantor or would otherwise operate as
a discharge of such Subsidiary Guarantor as a matter of law or equity.

            Each Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.

            In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Guaranteed Obligation

                                      -85-
<PAGE>

when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, or to perform or comply with any other Guaranteed
Obligation, each Subsidiary Guarantor hereby promises to and shall, upon receipt
of written demand by the Trustee, forthwith pay, or cause to be paid, in cash,
to the Holders or the Trustee an amount equal to the sum of (1) the unpaid
amount of such Guaranteed Obligations, (2) accrued and unpaid interest on such
Guaranteed Obligations (but only to the extent not prohibited by law) and (3)
all other monetary Guaranteed Obligations of the Company to the Holders and the
Trustee.

            Each Subsidiary Guarantor agrees that, as between it, on the one
hand, and the Holders and the Trustee, on the other hand, (x) the maturity of
the Guaranteed Obligations hereby may be accelerated as provided in Article 6
for the purposes of such Subsidiary Guarantor's Subsidiary Guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such Guaranteed Obligations as
provided in Article 6, such Guaranteed Obligations (whether or not due and
payable) shall forthwith become due and payable by such Subsidiary Guarantor for
the purposes of this Section 11.01.

            Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section 11.01.

            SECTION 11.02. Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum aggregate amount of
the Obligations guaranteed hereunder by any Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.

            SECTION 11.03. Successors and Assigns. This Article 11 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.

            SECTION 11.04. No Waiver. Neither a failure nor a delay on the part
of either the Trustee or the Holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 11 at law,
in equity, by statute or otherwise.

            SECTION 11.05. Modification. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for

                                      -86-
<PAGE>

the purpose for which given. No notice to or demand on any Subsidiary Guarantor
in any case shall entitle such Subsidiary Guarantor to any other or further
notice or demand in the same, similar or other circumstances.

            SECTION 11.06. Release of Subsidiary Guarantor. Upon (a) the sale or
other disposition (including by way of consolidation or merger) of all of the
Capital Stock of a Subsidiary Guarantor, (b) the sale or disposition of all or
substantially all the assets of such Subsidiary Guarantor or (c) the designation
of such Subsidiary Guarantor as an Unrestricted Subsidiary (in each case other
than a sale or disposition to the Company or an Affiliate of the Company), such
Subsidiary Guarantor shall be deemed released from all obligations under this
Article 11 without any further action required on the part of the Trustee or any
Holder. At the request of the Company, the Trustee shall execute and deliver an
appropriate instrument evidencing such release.

                                   ARTICLE 12

                     Subordination of Subsidiary Guaranties

            SECTION 12.01. Agreement To Subordinate. Each Subsidiary Guarantor
agrees, and each Securityholder by accepting a Security agrees, that the
Indebtedness evidenced by such Subsidiary Guarantor's Subsidiary Guaranty is
subordinated in right of payment, to the extent and in the manner provided in
this Article 12, to the prior payment of all Senior Indebtedness of such
Subsidiary Guarantor and that the subordination is for the benefit of and
enforceable by the holders of such Senior Indebtedness. The Obligations of a
Subsidiary Guarantor shall in all respects rank pari passu with all other Senior
Subordinated Indebtedness of such Subsidiary Guarantor and only Senior
Indebtedness of such Subsidiary Guarantor (including such Subsidiary Guarantor's
Guaranty of Senior Indebtedness of the Company) shall rank senior to the
Obligations of such Subsidiary Guarantor in accordance with the provisions set
forth herein.

            SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of any Subsidiary Guarantor to creditors
upon a total or partial liquidation or a total or partial dissolution of such
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Subsidiary Guarantor or its
property:

            (1)   holders of Senior Indebtedness of such Subsidiary Guarantor
      shall be entitled to receive payment in full in cash of such Senior
      Indebtedness before Securityholders shall be entitled to receive any
      payment pursuant to the Subsidiary Guaranty of such Subsidiary Guarantor;
      and

            (2)   until the Senior Indebtedness of any Subsidiary Guarantor is
      paid in full in cash, any payment or distribution to which Securityholders
      would be entitled but for this Article 12 shall be made to holders of such
      Senior Indebtedness as their interests may appear, except that
      Securityholders may receive shares of stock and any debt securities of
      such Subsidiary Guarantor that are subordinated to such Senior
      Indebtedness to at least the same extent as Subsidiary Guaranty.

                                      -87-
<PAGE>

            SECTION 12.03. Default on Senior Indebtedness of Subsidiary
Guarantor. No Subsidiary Guarantor shall make its Subsidiary Guaranty or
purchase, redeem or otherwise retire or defease any Securities or other
Obligations (collectively, "pay its Subsidiary Guaranty") if either of the
following (a "Payment Default") occurs (1) any Obligation on any Designated
Senior Indebtedness of such Subsidiary Guarantor is not paid in full in cash
when due; or (2) any other default on Designated Senior Indebtedness of such
Subsidiary Guarantor occurs and the maturity of such Designated Senior
Indebtedness is accelerated in accordance with its terms; unless, in either
case, the Payment Default has been cured or waived and any such acceleration has
been rescinded or such Designated Senior Indebtedness has been paid in full in
cash; provided, however, that any Subsidiary Guarantor shall be entitled to pay
its Subsidiary Guaranty without regard to the foregoing if such Subsidiary
Guarantor and the Trustee receive written notice approving such payment from the
Representative of any Designated Senior Indebtedness with respect to which the
Payment Default has occurred and is continuing. During the continuance of any
default (other than a Payment Default) with respect to any Designated Senior
Indebtedness of such Subsidiary Guarantor pursuant to which the maturity thereof
may be accelerated immediately without further notice (except such notice as may
be required to effect such acceleration) or the expiration of any applicable
grace periods, such Subsidiary Guarantor shall not pay its Subsidiary Guaranty
for a period (a "Payment Blockage Period") commencing upon the receipt by the
Trustee of (with a copy to such Subsidiary Guarantor) written notice (a
"Blockage Notice") of such default from the Representative of such Designated
Senior Indebtedness specifying an election to effect a Payment Blockage Period
and ending 179 days thereafter. The Payment Blockage Period shall end earlier if
such Payment Blockage Period is terminated (1) by written notice to the Trustee
and such Subsidiary Guarantor from the Person or Persons who gave such Blockage
Notice; (2) because the default giving rise to such Blockage Notice is cured,
waived or otherwise no longer continuing; or (3) because such Designated Senior
Indebtedness has been discharged or repaid in full in cash. Notwithstanding the
provisions described in the immediately preceding two sentences (but subject to
the provisions contained in the first sentence of this Section), unless the
holders of such Designated Senior Indebtedness giving such Payment Notice or the
Representative of such Designated Senior Indebtedness shall have accelerated the
maturity of such Designated Senior Indebtedness, any Subsidiary Guarantor shall
be entitled to resume payments pursuant to its Subsidiary Guaranty after
termination of such Payment Blockage Period. No Subsidiary Guarantor shall be
subject to more than one Blockage Period in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness of such Subsidiary Guarantor during such period, except that if any
Blockage Notice is delivered to the Trustee by or on behalf of holders of
Designated Senior Indebtedness of such Subsidiary Guarantor (other than holders
of the Bank Indebtedness), a Representative of holders of Bank Indebtedness may
give another Blockage Notice within such period. However, in no event may the
total number of days during which any Payment Blockage Period or Periods is in
effect exceed 179 days in the aggregate during any consecutive 360-day period,
and there must be 181 days during any consecutive 360-day period during which no
Payment Blockage Period is in effect. For purposes of this Section, no default
or event of default which existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness of such Subsidiary Guarantor initiating such Payment
Blockage Period shall be, or be made, the basis of the commencement of a
subsequent Payment Blockage Period by the Representative of such

                                      -88-
<PAGE>

Designated Senior Indebtedness unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.

            SECTION 12.04. Demand for Payment. If a demand for payment is made
on a Subsidiary Guarantor pursuant to Article 11, the Trustee shall promptly
notify the holders of the Designated Senior Indebtedness of such Subsidiary
Guarantor (or their Representatives) of such demand.

            SECTION 12.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 12 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness of the applicable
Subsidiary Guarantor and pay it over to them or their Representatives as their
interests may appear.

            SECTION 12.06. Subrogation. After all Senior Indebtedness of a
Subsidiary Guarantor is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to Senior Indebtedness of such
Subsidiary Guarantor. A distribution made under this Article 12 to holders of
such Senior Indebtedness which otherwise would have been made to Securityholders
is not, as between the relevant Subsidiary Guarantor and Securityholders, a
payment by such Subsidiary Guarantor on such Senior Indebtedness.

            SECTION 12.07. Relative Rights. This Article 12 defines the relative
rights of Securityholders and holders of Senior Indebtedness of a Subsidiary
Guarantor. Nothing in this Indenture shall:

            (1)   impair, as between a Subsidiary Guarantor and Securityholders,
      the obligation of such Subsidiary Guarantor, which is absolute and
      unconditional, to pay its Subsidiary Guaranty to the extent set forth in
      Article 11; or

            (2)   prevent the Trustee or any Securityholder from exercising its
      available remedies upon a default by such Subsidiary Guarantor under its
      Subsidiary Guaranty, subject to the rights of holders of Senior
      Indebtedness of such Subsidiary Guarantor to receive distributions
      otherwise payable to Securityholders.

            SECTION 12.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of any Subsidiary Guarantor to
enforce the subordination of the Subsidiary Guaranty of such Subsidiary
Guarantor shall be impaired by any act or failure to act by such Subsidiary
Guarantor or by its failure to comply with this Indenture.

            SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 12.03, the Trustee or Paying Agent shall continue to make payments on
any Subsidiary Guaranty and shall not be charged with knowledge of the existence
of facts that would prohibit the making of any such payments unless, not less
than two Business Days prior to the date of such payment, a Trust Officer of the
Trustee receives written notice satisfactory to it that such payments are
prohibited by this Article 12. The Company, the relevant Subsidiary Guarantor,
the Registrar or co-registrar, the Paying Agent, a Representative or a holder of
Senior Indebtedness of such Subsidiary Guarantor shall be entitled to give the
notice; provided, however, that, if an issue of

                                      -89-
<PAGE>

Senior Indebtedness of any Subsidiary Guarantor has a Representative, only the
Representative shall be entitled to give the notice.

            The Trustee in its individual or any other capacity shall be
entitled to hold Senior Indebtedness of any Subsidiary Guarantor with the same
rights it would have if it were not the Trustee. The Registrar and co-registrar
and the Paying Agent may do the same with like rights. The Trustee shall be
entitled to all the rights set forth in this Article 12 with respect to any
Senior Indebtedness of any Subsidiary Guarantor which may at any time be held by
it, to the same extent as any other holder of such Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 12 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.

            SECTION 12.10. Distribution or Notice to Representative. Whenever
any Person is to make a distribution or give a notice to holders of Senior
Indebtedness of any Subsidiary Guarantor, such Person shall be entitled to make
such distribution or give such notice to their Representative (if any).

            SECTION 12.11. Article 12 Not To Prevent Events of Default or Limit
Right To Demand Payment. The failure to make a payment pursuant to a Subsidiary
Guaranty by reason of any provision in this Article 12 shall not be construed as
preventing the occurrence of a Default. Nothing in this Article 12 shall have
any effect on the right of the Securityholders or the Trustee to make a demand
for payment on any Subsidiary Guarantor pursuant to its Subsidiary Guaranty.

            SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Securityholders
shall be entitled to rely (1) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (2) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the
Securityholders or (3) upon the Representatives for the holders of Senior
Indebtedness of any Subsidiary Guarantor for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
such Senior Indebtedness and other indebtedness of such Subsidiary Guarantor,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 12. In the
event that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of any
Subsidiary Guarantor to participate in any payment or distribution pursuant to
this Article 12, the Trustee shall be entitled to request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness of such Subsidiary Guarantor held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and other facts pertinent to the rights of such Person under this Article 12,
and, if such evidence is not furnished, the Trustee shall be entitled to defer
any payment to such Person pending judicial determination as to the right of
such Person to receive such payment. The provisions of Sections 7.01 and 7.02
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article 12.

            SECTION 12.13. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may

                                      -90-
<PAGE>

be necessary or appropriate to acknowledge or effectuate the subordination
between the Securityholders and the holders of Senior Indebtedness of any
Subsidiary Guarantor as provided in this Article 12 and appoints the Trustee as
attorney-in-fact for any and all such purposes.

            SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness of Subsidiary Guarantor. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of any Subsidiary Guarantor
and shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of such Senior Indebtedness shall be entitled by
virtue of this Article 12 or otherwise.

            SECTION 12.15. Reliance by Holders of Senior Indebtedness of
Subsidiary Guarantors on Subordination Provisions. Each Securityholder by
accepting a Security acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a consideration to
each holder of any Senior Indebtedness of any Subsidiary Guarantor, whether such
Senior Indebtedness was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Senior Indebtedness.

                                   ARTICLE 13

                                  Miscellaneous

            SECTION 13.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.

            SECTION 13.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:

      if to the Company or any Subsidiary Guarantor:

            Encore Acquisition Company
            777 Main Street
            Suite 1400
            Fort Worth, TX 76102

            Attention: Roy W. Jageman

                                      -91-
<PAGE>

      if to the Trustee:

            Wells Fargo Bank, National Association
            505 Main Street
            Suite 301
            Fort Worth, TX 76102

            Attention: Corporate Trust Administration

            The Company, any Subsidiary Guarantor or the Trustee by notice to
the other may designate additional or different addresses for subsequent notices
or communications.

            Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.

            Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.

            SECTION 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, any Subsidiary Guarantor, the Trustee, the Registrar
and anyone else shall have the protection of TIA Section 312(c).

            SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:

            (1)   an Officers' Certificate in form and substance reasonably
      satisfactory to the Trustee stating that, in the opinion of the signers,
      all conditions precedent, if any, provided for in this Indenture relating
      to the proposed action have been complied with; and

            (2)   an Opinion of Counsel in form and substance reasonably
      satisfactory to the Trustee stating that, in the opinion of such counsel,
      all such conditions precedent have been complied with.

            SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:

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

                                      -92-
<PAGE>

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

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

            (4)   a statement as to whether or not, in the opinion of such
      individual, such covenant or condition has been complied with.

            SECTION 13.06. When Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.

            SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.

            SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York, Texas or Minnesota. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.

            SECTION 13.09. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles of conflicts of law
to the extent that the application of the laws of another jurisdiction would be
required thereby.

            SECTION 13.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company or any Subsidiary Guarantor
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or of such Subsidiary Guarantor under its
Subsidiary Guaranty or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.

            SECTION 13.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.

                                      -93-
<PAGE>

            SECTION 13.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.

            SECTION 13.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.

                                      -94-
<PAGE>

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

                                ENCORE ACQUISITION COMPANY,

                                By /s/ Roy W. Jageman
                                   ---------------------------------------------
                                   Roy W. Jageman
                                   Executive Vice
                                   President & Chief
                                   Financial Officer

                                EAP ENERGY, INC.,

                                By  /s/ Roy W. Jageman
                                    --------------------------------------------
                                    Roy W. Jageman
                                    Executive Vice
                                    President & Chief
                                    Financial Officer

                                EAP ENERGY SERVICES, L.P.,

                                By EAP Energy, Inc.,
                                     its general partner

                                     By /s/ Roy W. Jageman
                                        ----------------------------------------
                                        Roy W. Jageman
                                        Executive Vice
                                        President & Chief
                                        Financial Officer

                                EAP OPERATING, INC.,

                                By /s/ Roy W. Jageman
                                   ---------------------------------------------
                                   Roy W. Jageman
                                   Executive Vice
                                   President & Chief
                                   Financial Officer

                                      -95-
<PAGE>

                                EAP PROPERTIES, INC.,

                                By /s/ Robert A. Sagedy
                                   ---------------------------------------------
                                   Robert A. Sagedy
                                   Vice President

                                ENCORE OPERATING, L.P.,

                                By EAP Operating, Inc.,
                                     its general partner

                                     By /s/ Roy W. Jageman
                                        ----------------------------------------
                                        Roy W. Jageman
                                        Executive Vice
                                        President & Chief
                                        Financial Officer

                                ENCORE OPERATING LOUISIANA LLC,

                                By /s/ Tom Olle
                                   ---------------------------------------------
                                   Tom Olle
                                   President

                                      -96-
<PAGE>

                                WELLS FARGO BANK, NATIONAL ASSOCIATION,

                                By /s/ Melissa Scott
                                   ---------------------------------------------
                                     Name:    Melissa Scott
                                     Title:    Vice President

                                      -97-
<PAGE>

                                                 RULE 144A/REGULATION S APPENDIX

                   PROVISIONS RELATING TO INITIAL SECURITIES,
                           PRIVATE EXCHANGE SECURITIES
                             AND EXCHANGE SECURITIES

      1.    Definitions

      1.1   Definitions

      For the purposes of this Appendix the following terms shall have the
meanings indicated below:

            "Depository" means The Depository Trust Company, its nominees and
their respective successors.

            "Exchange Securities" means (1) the 6.25% Senior Subordinated Notes
Due 2014 issued pursuant to the Indenture in connection with the Registered
Exchange Offer pursuant to the Registration Rights Agreement and (2) Additional
Securities, if any, issued pursuant to a registration statement filed with the
SEC under the Securities Act.

            "Initial Purchasers" means (1) with respect to the Initial
Securities issued on the Issue Date, Goldman, Sachs & Co., Credit Suisse First
Boston LLC, BNP Paribas Securities Corp., Deutsche Bank Securities Inc., Fleet
Securities, Inc., Fortis Investment Services LLC, J.P. Morgan Securities Inc.,
KeyBanc Capital Markets, A Division of McDonald Investments Inc. and Stanford
Group Company and (2) with respect to each issuance of Additional Securities,
the Persons purchasing such Additional Securities under the related Purchase
Agreement.

            "Initial Securities" means (1) $150 million aggregate principal
amount of 6.25% Senior Subordinated Notes Due 2014 issued on the Issue Date and
(2) Additional Securities, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.

            "Private Exchange" means the offer by the Company, pursuant to
the Registration Rights Agreement, to the Initial Purchasers to issue and
deliver to each Initial Purchaser, in exchange for the Initial Securities held
by the Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.

            "Private Exchange Securities" means any 6.25% Senior
Subordinated Notes Due 2014 issued in connection with a Private Exchange.

            "Purchase Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated March 30,
2004, among the Company, the Subsidiary Guarantors and the Initial Purchasers,
and (2) with respect to each issuance of Additional Securities, the purchase
agreement or underwriting agreement among the Company and the Persons purchasing
such Additional Securities.

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

            "Registered Exchange Offer" means the offer by the Company,
pursuant to the Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to

<PAGE>

such Holders, in exchange for the Initial Securities, a like aggregate principal
amount of Exchange Securities registered under the Securities Act.

            "Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated April 2, 2004 among the Company, the Subsidiary Guarantors and the Initial
Purchasers, and (2) with respect to each issuance of Additional Securities
issued in a transaction exempt from the registration requirements of the
Securities Act, the registration rights agreement, if any, among the Company and
the Persons purchasing such Additional Securities under the related Purchase
Agreement.

            "Securities" means the Initial Securities, the Exchange
Securities and the Private Exchange Securities, treated as a single class.

            "Securities Act" means the Securities Act of 1933.

            "Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor Person
thereto and shall initially be the Trustee.

            "Shelf Registration Statement" means the registration
statement issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to the a Registration Rights
Agreement.

            "Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.3(b)hereto.

      1.2   Other Definitions

<TABLE>
<CAPTION>
                                Defined in
       Term                      Section:
       ----                      --------
<S>    <C>                      <C>
"Agent Members" ............     2.1(b)
"Global Security" ..........     2.1(a)
"Regulation S" .............     2.1(a)
"Restricted Global Security"     2.1(a)
"Rule 144A" ................     2.1(a)
</TABLE>

      2.    The Securities.

      2.1   (a) Form and Dating. Initial Securities offered and sold to a QIB in
reliance on Rule 144A under the Securities Act ("Rule 144A") or in reliance on
Regulation S under the Securities Act ("Regulation S"), in each case as provided
in the Purchase Agreement, and Private Exchange Securities, as provided in the
Registration Rights Agreement, shall be issued initially in the form of one or
more permanent global Securities in definitive, fully registered form without
interest coupons with the global securities legend and restricted securities
legend set forth in Exhibit 1 hereto (each, a "Restricted Global Security"),
which shall be deposited on behalf of the purchasers of the Initial Securities
represented thereby with the Trustee, at its

                                      -2-
<PAGE>

principal corporate trust office,as custodian for the Depository (or with such
other custodian as the Depository may direct), and registered in the name of the
Depository or a nominee of the Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depository or its
nominee as hereinafter provided. Exchange Securities shall be issued in global
form (with the global securities legend set forth in Exhibit 1 hereto) or in
certificated form at the option of the Holders thereof from time to time.
Exchange Securities issued in global form and Restricted Global Securities are
sometimes referred to in this Appendix as "Global Securities."

      (b)   Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.

            The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.

            Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as the
custodian of the Depository or under such Global Security, and the Company, the
Trustee and any agent of the Company or the Trustee shall be entitled to treat
the Depository as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.

      (c)   Certificated Securities. Except as provided in this Section 2.1 or
Section 2.3 or 2.4, owners of beneficial interests in Restricted Global
Securities shall not be entitled to receive physical delivery of certificated
Securities.

      2.2   Authentication. The Trustee shall authenticate and deliver: (1) on
the Issue Date, an aggregate principal amount of $150 million 6.25% Senior
Subordinated Notes Due 2014, (2) any Additional Securities for an original issue
in an aggregate principal amount specified in the written order of the Company
pursuant to Section 2.02 of the Indenture and (3) Exchange Securities or Private
Exchange Securities for issue only in a Registered Exchange Offer or a Private
Exchange, respectively, pursuant to a Registration Rights Agreement, for a like
principal amount of Initial Securities, in each case upon a written order of the
Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and, in the case of any issuance of
Additional Securities pursuant to Section 2.13 of the Indenture, shall certify
that such issuance is in compliance with Section 4.03 of the Indenture.

                                      -3-
<PAGE>

      2.3   Transfer and Exchange.

            (a)   Transfer and Exchange of Global Securities (i) The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depository therefor. A transferor of a beneficial interest in a Global
Security shall deliver to the Registrar a written order given in accordance with
the Depositary's procedures containing information regarding the participant
account of the Depositary to be credited with a beneficial interest in the
Global Security. The Registrar shall, in accordance with such instructions
instruct the Depositary to credit to the account of the Person specified in such
instructions a beneficial interest in the Global Security and to debit the
account of the Person making the transfer the beneficial interest in the Global
Security being transferred.

            (ii)  Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.

            (iii) In the event that a Restricted Global Security is exchanged
for Securities in certificated registered form pursuant to Section 2.4 of this
Appendix, prior to the consummation of a Registered Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect to such Securities,
such Securities may be exchanged only in accordance with such procedures as are
substantially consistent with the provisions of this Section 2.3 (including the
certification requirements set forth on the reverse of the Initial Securities
intended to ensure that such transfers comply with Rule 144A or Regulation S, as
the case may be) and such other procedures as may from time to time be adopted
by the Company.

            (b)   Legend.

            (i)   Except as permitted by the following paragraphs (ii), (iii)
      and (iv), each Security certificate evidencing the Restricted Global
      Securities (and all Securities issued in exchange therefor or in
      substitution thereof) shall bear a legend in substantially the following
      form:

            THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
            STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE
            OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A
            PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
            INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
            SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
            A QUALIFIED INSTITUTIONAL BUYER, IN A TRANSACTION MEETING THE
            REQUIREMENTS OF RULE 144A (2) IN AN OFFSHORE TRANSACTION COMPLYING
            WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
            (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES

                                      -4-
<PAGE>

            ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN
            INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
            REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO
            AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B)
            IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
            THE UNITED STATES AND OTHER JURISDICTIONS.

            (ii)  Upon any sale or transfer of a Transfer Restricted Security
      (including any Transfer Restricted Security represented by a Restricted
      Global Security) pursuant to Rule 144 under the Securities Act, the
      Registrar shall permit the transferee thereof to exchange such Transfer
      Restricted Security for a certificated Security that does not bear the
      legend set forth above and rescind any restriction on the transfer of such
      Transfer Restricted Security, if the transferor thereof certifies in
      writing to the Registrar that such sale or transfer was made in reliance
      on Rule 144 (such certification to be in the form set forth on the reverse
      of the Security).

            (iii) After a transfer of any Initial Securities or Private Exchange
      Securities pursuant to and during the period of the effectiveness of a
      Shelf Registration Statement with respect to such Initial Securities or
      Private Exchange Securities, as the case may be, all requirements
      pertaining to legends on such Initial Security or such Private Exchange
      Security will cease to apply, the requirements requiring any such Initial
      Security or such Private Exchange Security issued to certain Holders be
      issued in global form will cease to apply, and a certificated Initial
      Security or Private Exchange Security or an Initial Security or Private
      Exchange Security in global form, in each case without restrictive
      transfer legends, will be available to the transferee of the Holder of
      such Initial Securities or Private Exchange Securities upon exchange of
      such transferring Holder's certificated Initial Security or Private
      Exchange Security or directions to transfer such Holder's interest in the
      Global Security, as applicable.

            (iv)  Upon the consummation of a Registered Exchange Offer with
      respect to the Initial Securities, all requirements pertaining to such
      Initial Securities that Initial Securities issued to certain Holders be
      issued in global form will still apply with respect to Holders of such
      Initial Securities that do not exchange their Initial Securities, and
      Exchange Securities in certificated or global form will be available to
      Holders that exchange such Initial Securities in such Registered Exchange
      Offer.

            (v)   Upon the consummation of a Private Exchange with respect to
      the Initial Securities, all requirements pertaining to such Initial
      Securities that Initial Securities issued to certain Holders be issued in
      global form will still apply with respect to Holders of such Initial
      Securities that do not exchange their Initial Securities, and Private
      Exchange Securities in global form with the global securities legend and
      the Restricted Securities Legend set forth in Exhibit 1 hereto will be
      available to Holders that exchange such Initial Securities in such Private
      Exchange.

            (c)   Cancellation or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged for
certificated Securities,

                                      -5-
<PAGE>

redeemed, purchased or canceled, such Global Security shall be returned to the
Depository for cancellation or retained and canceled by the Trustee. At any time
prior to such cancellation, if any beneficial interest in a Global Security is
exchanged for certificated Securities, redeemed, purchased or canceled, the
principal amount of Securities represented by such Global Security shall be
reduced and an adjustment shall be made on the books and records of the Trustee
(if it is then the Securities Custodian for such Global Security) with respect
to such Global Security, by the Trustee or the Securities Custodian, to reflect
such reduction.

            (d)   Obligations with Respect to Transfers and Exchanges of
Securities.

            (i)   To permit registrations of transfers and exchanges, the
      Company shall execute and the Trustee shall authenticate certificated
      Securities and Global Securities at the Registrar's or co-registrar's
      request.

            (ii)  No service charge shall be made for any registration of
      transfer or exchange, but the Company may require payment of a sum
      sufficient to cover any transfer tax, assessments, or similar governmental
      charge payable in connection therewith (other than any such transfer
      taxes, assessments or similar governmental charge payable upon exchange or
      transfer pursuant to Sections 3.06, 4.08 and 9.05 of the Indenture).

            (iii) The Registrar or co-registrar shall not be required to
      register the transfer of or exchange of any Security for a period
      beginning 15 Business Days before the mailing of a notice of an offer to
      repurchase or redeem Securities or 15 Business Days before an interest
      payment date.

            (iv)  Prior to the due presentation for registration of transfer of
      any Security, the Company, the Trustee, the Paying Agent, the Registrar or
      any co-registrar may deem and treat the person in whose name a Security is
      registered as the absolute owner of such Security for the purpose of
      receiving payment of principal of and interest on such Security and for
      all other purposes whatsoever, whether or not such Security is overdue,
      and none of the Company, the Trustee, the Paying Agent, the Registrar or
      any co-registrar shall be affected by notice to the contrary.

            (v)   All Securities issued upon any transfer or exchange pursuant
      to the terms of this Indenture shall evidence the same debt and shall be
      entitled to the same benefits under this Indenture as the Securities
      surrendered upon such transfer or exchange.

            (e)   No Obligation of the Trustee.

            (i)   The Trustee shall have no responsibility or obligation to any
      beneficial owner of a Global Security, a member of, or a participant in
      the Depository or other Person with respect to the accuracy of the records
      of the Depository or its nominee or of any participant or member thereof,
      with respect to any ownership interest in the Securities or with respect
      to the delivery to any participant, member, beneficial owner or other
      Person (other than the Depository) of any notice (including any notice of
      redemption) or the payment of any amount, under or with respect to such
      Securities. All notices and communications to be given to the Holders and
      all payments to be made to Holders under the Securities shall be given or
      made only to or upon the order of the

                                      -6-
<PAGE>

      registered Holders (which shall be the Depository or its nominee in the
      case of a Global Security). The rights of beneficial owners in any Global
      Security shall be exercised only through the Depository subject to the
      applicable rules and procedures of the Depository. The Trustee may rely
      and shall be fully protected in relying upon information furnished by the
      Depository with respect to its members, participants and any beneficial
      owners.

            (ii)  The Trustee shall have no obligation or duty to monitor,
      determine or inquire as to compliance with any restrictions on transfer
      imposed under this Indenture or under applicable law with respect to any
      transfer of any interest in any Security (including any transfers between
      or among Depository participants, members or beneficial owners in any
      Global Security) other than to require delivery of such certificates and
      other documentation or evidence as are expressly required by, and to do so
      if and when expressly required by, the terms of this Indenture, and to
      examine the same to determine substantial compliance as to form with the
      express requirements hereof.

      2.4   Certificated Securities.

            (a)   A Restricted Global Security deposited with the Depository or
with the Trustee as custodian for the Depository pursuant to Section 2.1 shall
be transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Restricted
Global Security or if at any time such Depository ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary is not
appointed by the Company within 90 days of such notice, (ii) an Event of Default
has occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.

            (b)   Any Restricted Global Security that is transferable to the
beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by
the Depository to the Trustee located at its principal corporate trust office in
the Borough of Manhattan, The City of New York, to be so transferred, in whole
or from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Restricted Global
Security, an equal aggregate principal amount of certificated Initial Securities
of authorized denominations. Any portion of a Restricted Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall direct.
Any certificated Initial Security or Private Exchange Security delivered in
exchange for an interest in the Restricted Global Security shall, except as
otherwise provided by Section 2.3(b), bear the restricted securities legend set
forth in Exhibit 1 hereto.

            (c)   Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security shall be entitled to grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.

                                      -7-
<PAGE>

            (d)   In the event of the occurrence of either of the events
specified in Section 2.4(a), the Company shall promptly make available to the
Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.

                                      -8-
<PAGE>

                                                                       EXHIBIT 1
                                                                              to
                                                 RULE 144A/REGULATION S APPENDIX

                       [FORM OF FACE OF INITIAL SECURITY]

                           [Global Securities Legend]

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

            TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

                         [Restricted Securities Legend]

            THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903
OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND OTHER JURISDICTIONS.

<PAGE>

No.                                                     CUSIP No. ______________
                                                         ISIN No. ______________
                                                                  $_____________

                    6.25% Senior Subordinated Notes Due 2014

            Encore Acquisition Company, a Delaware corporation, promises to pay
to Cede & Co., or registered assigns, the principal sum of Dollars on April 15,
2014.

            Interest Payment Dates: April 15 and October 15.

            Record Dates: April 1 and October 1.

            Additional provisions of this Security are set forth on the other
side of this Security.

                                      -2-
<PAGE>

            IN WITNESS WHEREOF, the parties have caused this instrument to be
duly executed.

Dated:

                                                ENCORE ACQUISITION COMPANY,

                                                By _____________________________
                                                   Name:
                                                   Title:

                                      -3-
<PAGE>

Dated:

TRUSTEE'S CERTIFICATE
OF AUTHENTICATION

WELLS FARGO BANK, NATIONAL ASSOCIATION,

         as Trustee, certifies
         that this is one of
         the Securities referred
         to in the Indenture.

By  _________________________________
    Authorized Signatory

                                      -4-
<PAGE>

                  [FORM OF] REVERSE SIDE OF [INITIAL] SECURITY

                   6.25% Senior Subordinated Security Due 2014

1.    Interest

            Encore Acquisition Company, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional interest will accrue on this Security at a rate of
0.25% per annum (increasing by an additional 0.25% per annum after each
consecutive 90-day period that occurs after the date on which such Registration
default occurs up to a maximum additional interest rate of 1.00%) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. The
Company will pay interest semiannually on April 15 and October 15 of each year,
commencing April 15, 2004. Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from April 2, 2004. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

2.    Method of Payment

            The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the April 1 or October 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).

3.    Paying Agent and Registrar

            Initially, Wells Fargo Bank, National Association, a United States
banking association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.

                                      -5-
<PAGE>

4.    Indenture

            The Company issued the Securities under an Indenture dated as of
April 2, 2004 ("Indenture"), among the Company, the Subsidiary Guarantors and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Securityholders are referred to the Indenture and the Act for a
statement of those terms.

            The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the
Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase capital stock; make investments; issue
or sell capital stock of subsidiaries; engage in transactions with affiliates;
create liens on assets; transfer or sell assets; guarantee indebtedness;
restrict dividends or other payments of subsidiaries; and consolidate, merge or
transfer all or substantially all of its assets and the assets of its
subsidiaries. During any period that the Securities have an Investment Grade
Rating from both S&P and Moody's and no Default has occurred and is continuing,
certain covenants will be suspended. These covenants are subject to important
exceptions and qualifications.

5.    Optional Redemption

            Except as set forth below, the Company shall not be entitled to
redeem the Securities at its option prior to April 15, 2009.

            On and after April 15, 2009, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages of
principal amount on the redemption date), plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on April 15 of the years set
forth below:

<TABLE>
<CAPTION>
                                 Redemption
       Period                      Price
-------------------              ----------
<S>                              <C>
        2009                      103.125%
        2010                      102.083%
        2011                      101.042%
        2012 and thereafter       100.000%
</TABLE>

            In addition, prior to April 15, 2007, the Company shall be entitled
at its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an

                                      -6-
<PAGE>

aggregate principal amount not to exceed 35% of the aggregate principal amount
of the Securities (which includes Additional Securities, if any) issued prior to
the redemption date at a redemption price (expressed as a percentage of
principal amount) of 106.250%, plus accrued and unpaid interest to the
redemption date, with the net cash proceeds from one or more Public Equity
Offerings; provided, however, that (1) at least 65% of such aggregate principal
amount of Securities (which includes Additional Securities, if any) remains
outstanding immediately after the occurrence of each such redemption (other than
Securities held, directly or indirectly, by the Company or its Affiliates); and
(2) each such redemption occurs within 180 days after the date of the related
Public Equity Offering.

            Prior to April 15, 2009, the Company may at its option redeem all
(but not less than all) the Securities (which includes the Additional
Securities, if any) at a redemption price equal to the sum of:

            (1)   the principal amount thereof, plus

            (2)   accrued and unpaid interest, if any, to the redemption date,
                  plus

            (3)   the Applicable Premium at the redemption date.

6.    Notice of Redemption

            Except as described in paragraph 7 below, notice of redemption will
be mailed at least 30 days but not more than 60 days before the redemption date
to each Holder of Securities to be redeemed at its registered address.
Securities in denominations larger than $1,000 principal amount may be redeemed
in part but only in whole multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Securities (or portions thereof)
to be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.

7.    Escrow; Special Mandatory Redemption

            The Initial Purchasers of the Initial Securities have deposited the
gross proceeds of the offering thereof with the Escrow Agent on the Issue Date.
The Escrow Agent will hold such funds pursuant to the Escrow Agreement, and,
subject to the conditions set forth in the Escrow Agreement, it will either
disburse such funds to the Company and the Initial Purchasers or disburse them
to the Trustee or the Paying Agent for application to the mandatory redemption
of the Initial Securities following the Special Mandatory Redemption Trigger.

            Following the occurrence of a Special Mandatory Redemption Trigger,
the Company shall redeem the Securities as a whole, upon notice as provided
below, at a redemption price equal to 100% of the aggregate principal amount
thereof plus accrued and unpaid interest to the redemption date. Notwithstanding
the provisions of paragraph 6, notice of such mandatory redemption shall be
given within five Business Days of the date of the Special Mandatory Redemption
Trigger by first-class mail, postage prepaid, mailed not less than 15 nor more
than 30 days prior to the redemption date, to the Escrow Agent and to each
Holder, at such Holder's address appearing in the Security Register, and such
notice shall state:

                                      -7-
<PAGE>

            (1)   that the Special Mandatory Redemption Trigger has occurred;

            (2)   the redemption date, which shall be on or before July 30,
                  2004;

            (3)   the redemption price;

            (4)   that on the redemption date the redemption price will become
                  due and payable upon each Security to be redeemed and that
                  interest thereon will cease to accrue on and after such date;
                  and

            (5)   the place or places where each Security is to be surrendered
                  for payment of the redemption price.

      Any notice of redemption given pursuant to this paragraph 7 may be
modified by the Company to conform with the applicable requirements of the
Depositary if any of the Securities subject to such notice are then represented
by one or more Global Securities.

8.    Put Provisions

            Upon a Change of Control, then unless the Company shall have
exercised its right to redeem all the Securities, any Holder of Securities will
have the right to cause the Company to repurchase all or any part of the
Securities of such Holder at a repurchase price equal to 101% of the principal
amount of the Securities to be repurchased plus accrued and unpaid interest, if
any, to the date of repurchase (subject to the right of holders of record on the
relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.

9.    Subordination

            The Securities are subordinated to Senior Indebtedness of the
Company, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness of the Company must be paid before the Securities may be
paid. The Company agrees, and each Securityholder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.

10.   Guaranty

            The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior subordinated basis by each of the Subsidiary Guarantors.

11.   Denominations; Transfer; Exchange

            The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required

                                      -8-
<PAGE>

by law or permitted by the Indenture. The Registrar need not register the
transfer or exchange of any Securities selected for redemption (except, in the
case of a Security to be redeemed in part, the portion of the Security not to be
redeemed) or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.

12.   Persons Deemed Owners

            The registered Holder of this Security may be treated as the owner
of it for all purposes.

13.   Unclaimed Money

            If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.

14.   Discharge and Defeasance

            Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.

15.   Amendment, Waiver

            Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended or supplemented, and compliance with
any provision of the Indenture may be waived, with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Subsidiary
Guarantors and the Trustee shall be entitled to amend or supplement the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to add guarantees with respect to the Securities, including Subsidiary
Guaranties, or to secure the Securities, or to confirm the release, termination
or discharge of any Subsidiary Guarantor or any such Lien when such release,
termination or discharge is permitted under the Indenture, or to add additional
covenants or surrender rights and powers conferred on the Company or the
Subsidiary Guarantors, or to comply with any request of the SEC in connection
with qualifying the Indenture under the Act, or to make any change that does not
adversely affect in any material respect the rights of any Securityholder, or to
conform the text of the Indenture or the Securities to any provision in the
Offering Circular in the section "Description of Notes" to the extent that such
provision in the "Description of Notes" was intended to be a verbatim recitation
of a provision of the Indenture, the Guarantees or the Securities.

                                      -9-
<PAGE>

16.   Defaults and Remedies

            Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraphs
5 and 7 of the Securities, upon acceleration or otherwise, or failure by the
Company to redeem or purchase Securities when required; (iii) failure by the
Company or any Subsidiary Guarantor to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company or any
Significant Subsidiary (other than Non-Recourse Purchase Money Indebtedness) if
the amount accelerated (or so unpaid) exceeds $10.0 million, provided that such
acceleration is not rescinded within a period of 10 days from the occurrence of
such acceleration; (v) certain events of bankruptcy or insolvency with respect
to the Company and the Significant Subsidiaries; (vi) certain judgments or
decrees for the payment of money in excess of $10.0 million; and (vii) certain
defaults with respect to Subsidiary Guaranties. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.

            Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is not opposed to the interest of the
Holders.

17.   Trustee Dealings with the Company

            Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

18.   No Recourse Against Others

            A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.

                                      -10-
<PAGE>

19.   Authentication

            This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

20.   Abbreviations

            Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

21.   CUSIP Numbers

            Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

22.   Holders' Compliance with Registration Rights Agreement

            Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.

23.   Governing Law

            THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

            The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:

            Encore Acquisition Company
            777 Main Street
            Suite 1400
            Fort Worth, TX 76102
            Attention: Roy W. Jageman

                                      -11-
<PAGE>

________________________________________________________________________________

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

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

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

and irrevocably appoint                 agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.

________________________________________________________________________________

Date: ___________________  Your Signature: _____________________________________

________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.

In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

      (1)   [ ]         in the United States to a "qualified institutional
                        buyer" (as defined in Rule 144A under the Securities Act
                        of 1933) pursuant to and in compliance with Rule 144A
                        under the Securities Act of 1933;

      (2)   [ ]         outside the United States in an offshore transaction
                        within the meaning of Regulation S under the Securities
                        Act in compliance with Rule 904 under the Securities Act
                        of 1933;

      (3)   [ ]         pursuant to an exemption from registration provided by
                        Rule 144 under the Securities Act of 1933; or

      (4)   [ ]         pursuant to an effective registration statement under
                        the Securities Act of 1933.

      Unless one of the boxes is checked, the Trustee will refuse to register
      any of the Securities evidenced by this certificate in the name of any
      person other than the registered holder thereof; provided, however, that
      if box (2) or (3) is checked, the Trustee shall be entitled to require,
      prior to registering any such transfer of the Securities, such legal
      opinions, certifications and other information as the Company has
      reasonably requested to confirm that such transfer is being made pursuant
      to an exemption from, or in a

                                      -12-
<PAGE>

      transaction not subject to, the registration requirements of the
      Securities Act, such as the exemption provided by Rule 144 under such Act.

                                          ______________________________________
                                                         Signature

Signature Guarantee:

_____________________________________     ______________________________________
Signature must be guaranteed              Signature

      Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

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

              TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

            The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.

Dated:___________________________         ______________________________________
                                          NOTICE: To be executed by an
                                                  executive officer

                                      -13-
<PAGE>

                      [TO BE ATTACHED TO GLOBAL SECURITIES]

              SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

            The following increases or decreases in this Global Security have
been made:

<TABLE>
                     Amount of decrease     Amount of increase in   Principal amount of      Signature of
                    in Principal  amount     Principal amount of    this Global Security   authorized officer
                      of this Global           this Global             following such         of Trustee or
Date of Exchange        Security                Security            decrease or increase)  Securities Custodian
<S>                 <C>                     <C>                     <C>                    <C>
</TABLE>

                                      -14-
<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

            If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Indenture, check the box:

                                      [ ]

            If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount
in principal amount: $__________

Date: _______________  Your Signature: _________________________________________
                                       (Sign exactly as your name appears on the
                                       other side of this Security.)

Signature Guarantee: ___________________________________________________________
                                     (Signature must be guaranteed)

      Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                      -15-
<PAGE>

                                                                       EXHIBIT A

                      [FORM OF FACE OF [EXCHANGE] SECURITY

                      [OR PRIVATE EXCHANGE SECURITY]]*/**

__________________
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".

**/ If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.

<PAGE>

No.                                                     CUSIP No. ______________
                                                        ISIN No.  ______________
                                                                  $_____________

                    6.25% Senior Subordinated Notes Due 2014

            Encore Acquisition Company, a Delaware corporation, promises to pay
to _______________________, or registered assigns, the principal sum of
________________ Dollars on April 15, 2014.

            Interest Payment Dates: April 15 and October 15.

            Record Dates: April 1 and October 1.

            Additional provisions of this Security are set forth on the other
side of this Security.

Dated:

                                                ENCORE ACQUISITION COMPANY,

                                                By _____________________________
                                                   Name:
                                                   Title:

                                                By _____________________________
                                                   Name:
                                                   Title:

TRUSTEE'S CERTIFICATE
OF AUTHENTICATION

WELLS FARGO BANK, NATIONAL ASSOCIATION,

         as Trustee, certifies
         that this is one of
         the Securities referred
         to in the Indenture.

By _____________________________
   Authorized Signatory

                                      -2-
<PAGE>

                  [FORM OF] REVERSE SIDE OF [EXCHANGE] SECURITY
                         [OR PRIVATE EXCHANGE SECURITY]

                   6.25% Senior Subordinated Security Due 2014

1.    Interest

            Encore Acquisition Company, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above[; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional interest will accrue on this Security at a rate of
..25% per annum (increasing by an additional .25% per annum after each
consecutive 90-day period that occurs after the date on which such Registration
Default occurs up to a maximum additional interest rate of 1.00% per annum) from
and including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured.](1) The
Company will pay interest semiannually on April 15 and October 15 of each year,
commencing April 15, 2004. Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from April 2, 2004. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

2.    Method of Payment

            The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the April 1 or October 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium, if any, and interest) will be
made by wire transfer of immediately available funds to the accounts specified
by The Depository Trust Company. The Company will make all payments in respect
of a certificated Security (including principal, premium, if any, and interest)
by mailing a check to the registered address of each Holder thereof; provided,
however, that payments on a certificated Security will be made by wire transfer
to a U.S. dollar account maintained by the payee with a bank in the United
States if such Holder elects payment by wire transfer by giving written notice
to the Trustee or the Paying Agent to such effect designating such account no
later than 30 days immediately preceding the relevant due date for payment (or
such other date as the Trustee may accept in its discretion).

------------------
(1)   Insert if at the date of issuance of the Exchange Security or Private
      Exchange Security (as the case may be) any Registration Default has
      occurred with respect to the related Initial Securities during the
      interest period in which such date of issuance occurs.

                                      -3-
<PAGE>

3.    Paying Agent and Registrar

            Initially, Wells Fargo Bank, National Association, a United States
banking association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.

4.    Indenture

            The Company issued the Securities under an Indenture dated April 2,
2004 ("Indenture"), among the Company, the Subsidiary Guarantors and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement of
those terms.

            The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the
Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase capital stock; make investments; issue
or sell capital stock of subsidiaries; engage in transactions with affiliates;
create liens on assets; transfer or sell assets; guarantee indebtedness;
restrict dividends or other payments of subsidiaries; and consolidate, merge or
transfer all or substantially all of its assets and the assets of its
subsidiaries; and engage in business activities unrelated to its current
activities. During any period that the Securities have an Investment Grade
Rating from both S&P and Moody's and no Default has occurred and is continuing,
certain covenants will be suspended. These covenants are subject to important
exceptions and qualifications.

5.    Optional Redemption

            Except as set forth below, the Company shall not be entitled to
redeem the Securities at its option prior to April 15, 2009.

            On and after April 15, 2009, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages of
principal amount, on the redemption date) plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on April 15 of the years set
forth below:

                                      -4-
<PAGE>

<TABLE>
<CAPTION>
                                Redemption
      Period                       Price
-------------------             ----------
<S>                             <C>
        2009                     103.125%
        2010                     102.083%
        2011                     101.042%
        2012 and thereafter      100.000%
</TABLE>

            In addition, prior to April 15, 2007, the Company shall be entitled
at its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount not to exceed
35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) issued prior to the redemption date at a
redemption price (expressed as a percentage of principal amount) of 106.250%,
plus accrued and unpaid interest to the redemption date, with the net cash
proceeds from one or more Public Equity Offerings; provided, however, that (1)
at least 65% of such aggregate principal amount of Securities (which includes
Additional Securities, if any) remains outstanding immediately after the
occurrence of each such redemption (other than Securities held, directly or
indirectly, by the Company or its Affiliates); and (2) each such redemption
occurs within 180 days after the date of the related Public Equity Offering.

            Prior to April 15, 2009, the Company may at its option redeem all
(but not less than all) the Securities (which includes the Additional
Securities, if any) at a redemption price equal to the sum of:

            (1)   the principal amount thereof, plus

            (2)   accrued and unpaid interest, if any, to the redemption date,
                  plus

            (3)   the Applicable Premium at the redemption date.

6.    Notice of Redemption

            Except as described in paragraph 7 below, notice of redemption will
be mailed at least 30 days but not more than 60 days before the redemption date
to each Holder of Securities to be redeemed at its registered address.
Securities in denominations larger than $1,000 principal amount may be redeemed
in part but only in whole multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Securities (or portions thereof)
to be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.

7.    Escrow; Special Mandatory Redemption

            The Initial Purchasers of the Initial Securities have deposited the
gross proceeds of the offering thereof with the Escrow Agent on the Issue Date.
The Escrow Agent will hold such funds pursuant to the Escrow Agreement, and,
subject to the conditions set forth in the Escrow Agreement, it will either
disburse such funds to the Company and the Initial Purchasers

                                      -5-
<PAGE>

or disburse them to the Trustee or the Paying Agent for application to the
mandatory redemption of the Initial Securities following the Special Mandatory
Redemption Trigger.

            Following the occurrence of a Special Mandatory Redemption Trigger,
the Company shall redeem the Securities as a whole, upon notice as provided
below, at a redemption price equal to 100% of the aggregate principal amount
thereof plus accrued and unpaid interest to the redemption date. Notwithstanding
the provisions of paragraph 6, notice of such mandatory redemption shall be
given within five Business Days of the date of the Special Mandatory Redemption
Trigger by first-class mail, postage prepaid, mailed not less than 15 nor more
than 30 days prior to the redemption date, to the Escrow Agent and to each
Holder, at such Holder's address appearing in the Security Register, and such
notice shall state:

            (1)   that the Special Mandatory Redemption Trigger has occurred;

            (2)   the redemption date, which shall be on or before July 30,
                  2004;

            (3)   the redemption price;

            (4)   that on the redemption date the redemption price will become
                  due and payable upon each Security to be redeemed and that
                  interest thereon will cease to accrue on and after such date;
                  and

            (5)   the place or places where each Security is to be surrendered
                  for payment of the redemption price.

            Any notice of redemption given pursuant to this paragraph 7 may be
modified by the Company to conform with the applicable requirements of the
Depositary if any of the Securities subject to such notice are then represented
by one or more Global Securities.

8.    Put Provisions

            Upon a Change of Control, then unless the Company shall have
exercised its right to redeem all the Securities, any Holder of Securities will
have the right to cause the Company to repurchase all or any part of the
Securities of such Holder at a repurchase price equal to 101% of the principal
amount of the Securities to be repurchased plus accrued and unpaid interest, if
any, to the date of repurchase (subject to the right of holders of record on the
relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.

9.    Subordination

            The Securities are subordinated to Senior Indebtedness of the
Company, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness of the Company must be paid before the Securities may be
paid. The Company agrees, and each Securityholder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.

                                      -6-
<PAGE>

10.   Guaranty

            The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior subordinated basis by each of the Subsidiary Guarantors.

11.   Denominations; Transfer; Exchange

            The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.

12.   Persons Deemed Owners

            The registered Holder of this Security may be treated as the owner
of it for all purposes.

13.   Unclaimed Money

            If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.

14.   Discharge and Defeasance

            Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.

15.   Amendment, Waiver

            Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended or supplemented, and compliance with
any provision of the Indenture may be waived, with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Subsidiary
Guarantors and the Trustee shall be entitled to amend or supplement the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to add

                                      -7-
<PAGE>

guarantees with respect to the Securities, including Subsidiary Guaranties, or
to secure the Securities, or to confirm the release, termination or discharge of
any Subsidiary Guarantor or any such Lien when such release, termination or
discharge is permitted under the Indenture, or to add additional covenants or
surrender rights and powers conferred on the Company or the Subsidiary
Guarantors, or to comply with any request of the SEC in connection with
qualifying the Indenture under the Act, or to make any change that does not
adversely affect in any material respect the rights of any Securityholder, or to
conform the text of the Indenture or the Securities to any provision in the
Offering Circular in the section "Description of Notes" to the extent that such
provision in the "Description of Notes" was intended to be a verbatim recitation
of a provision of the Indenture, the Guarantees or the Securities.

16.   Defaults and Remedies

            Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraphs
5 and 7 of the Securities, upon acceleration or otherwise, or failure by the
Company to redeem or purchase Securities when required; (iii) failure by the
Company or any Subsidiary Guarantor to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company or any
Significant Subsidiary (other than Non-Recourse Purchase Money Indebtedness) if
the amount accelerated (or so unpaid) exceeds $10.0 million, provided that such
acceleration is not rescinded within a period of 10 days from the occurrence of
such acceleration; (v) certain events of bankruptcy or insolvency with respect
to the Company and the Significant Subsidiaries; (vi) certain judgments or
decrees for the payment of money in excess of $10.0 million; and (vii) certain
defaults with respect to Subsidiary Guaranties. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.

            Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is not opposed to the interest of the
Holders.

17.   Trustee Dealings with the Company

            Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

                                      -8-
<PAGE>

18.   No Recourse Against Others

            A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.

19.   Authentication

            This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

20.   Abbreviations

            Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

21.   CUSIP Numbers

            Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

22.   Holders' Compliance with Registration Rights Agreement

            Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.

23.   Governing Law

            THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

            The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:

                                      -9-
<PAGE>

                  Encore Acquisition Company
                  777 Main Street
                  Suite 1400
                  Fort Worth, TX 76102
                  Attention: Roy W. Jageman

                                      -10-
<PAGE>

________________________________________________________________________________

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

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

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

and irrevocably appoint     agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.

________________________________________________________________________________

Date:_____________________  Your Signature: ____________________________________

________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.

                                      -11-
<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

            If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Indenture, check the box:

                                      [ ]

            If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount
in principal amount: $__________

Date: _______________  Your Signature: _________________________________________
                                       (Sign exactly as your name appears on the
                                       other side of this Security.)

Signature Guarantee: ___________________________________________________________
                                    (Signature must be guaranteed)

      Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                      -12-

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