Document:

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                                                                    EXHIBIT 4.10

                               UNOCAL CORPORATION

                                    AS ISSUER

                                       AND

                              THE BANK OF NEW YORK

                                   AS TRUSTEE

                ___% JUNIOR [CONVERTIBLE] SUBORDINATED DEBENTURES

                          SECOND SUPPLEMENTAL INDENTURE

                         DATED AS OF ____________, _____
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                                TABLE OF CONTENTS

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                                    ARTICLE I
                                   Definitions

Section 1.1.         Definition of Terms..........................................................................1

                                   ARTICLE II
                          General Terms and Conditions
                               of the Debentures

Section 2.1.         Designation and Principal Amount.............................................................7
Section 2.2.         Maturity.....................................................................................7
Section 2.3.         Form and Payment.............................................................................7
Section 2.4.         Global Debenture.............................................................................7
Section 2.5.         Interest.....................................................................................8

                                   ARTICLE III
                          Redemption of the Debentures

Section 3.1.         Special Event Redemption.....................................................................9
Section 3.2.         Optional Redemption by Company..............................................................10
Section 3.3.         Redemption of Less Than All Debentures......................................................11
Section 3.4.         No Sinking Fund.............................................................................11

                                   ARTICLE IV
                      Extension of Interest Payment Period

Section 4.1.         Extension of Interest Payment Period........................................................11
Section 4.2.         Notice of Extension.........................................................................11
Section 4.3.         Limitation of Transactions..................................................................12

                                    ARTICLE V
                                    Expenses

Section 5.1.         Payment of Expenses.........................................................................13
Section 5.2.         Payment Upon Resignation or Removal.........................................................13

                                   ARTICLE VI
                                    Covenants

Section 6.1.         Covenants as to the Trust...................................................................13
Section 6.2.         Listing or Quotation of Debentures..........................................................14
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                                   ARTICLE VII
                            Conversion of Debentures

Section 7.1.         Conversion Rights...........................................................................14
Section 7.2.         Conversion Procedures.......................................................................14
Section 7.3.         Certain Conversion Price Adjustments........................................................16
Section 7.4.         Merger, Consolidation, or Sale of Assets....................................................20
Section 7.5.         Notice of Adjustments of Conversion Price...................................................22
Section 7.6.         Prior Notice of Certain Events..............................................................22
Section 7.7.         Certain Plans, Rights or Securities.........................................................23
Section 7.8.         Preferred Stock Purchase Rights.............................................................23
Section 7.9.         Special Provisions Regarding Adjustment of Conversion Price or Other Provisions.............24
Section 7.10.        Certain Additional Rights...................................................................24
Section 7.11.        Trustee Not Responsible for Determining Conversion Price or Adjustments.....................25

                                  ARTICLE VIII
                                Events of Default

Section 8.1.         Events of Default...........................................................................25

                                   ARTICLE IX
                             Supplemental Debentures

Section 9.1.         Supplemental Debentures with Consent of Holders.............................................26

                                    ARTICLE X
                                Form of Debenture

Section 10.1.        Form of Debenture...........................................................................26

                                   ARTICLE XI
                          Original Issue of Debentures

Section 11.1         Original Issue of Debentures................................................................26

                                   ARTICLE XII
                                  Miscellaneous

Section 12.1.        Ratification of Base Indenture: Supplemental Indenture Controls.............................26
Section 12.2.        Trustee Not Responsible for Recitals........................................................27
Section 12.3.        Governing Law...............................................................................27
Section 12.4.        Separability................................................................................27
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Section 12.5.        Counterparts................................................................................27
Section 12.6.        List of Holders of Securities...............................................................27
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      THIS SECOND SUPPLEMENTAL INDENTURE, dated as of __________, _____ (the
"Supplemental Indenture"), is between Unocal Corporation, a Delaware corporation
(the "Company"), and The Bank of New York, as trustee (the "Trustee").

                                    RECITALS

      WHEREAS, the Company has executed and delivered the Base Indenture (as
defined herein) to the Trustee to provide for the issuance of the Company's
Securities from time to time in one or more series as might be determined by the
Company under the Base Indenture, in an unlimited aggregate principal amount as
may be authenticated and delivered as provided in the Base Indenture;

      WHEREAS, pursuant to the terms of the Base Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its "___% Junior [Convertible] Subordinated Debentures" (the "Debentures"),
the form and substance of such Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Base Indenture and this
Supplemental Indenture;

      WHEREAS, Unocal Capital Trust II, a Delaware statutory trust (the
"Trust"), intends to issue up to $__________ aggregate liquidation amount of its
___% Trust [Convertible] Preferred Securities (the "Trust Preferred Securities")
and up to $____________ aggregate liquidation amount of its ___ % Trust Common
Securities (the "Trust Common Securities" and, together with the Trust Preferred
Securities, the "Trust Securities"), representing undivided beneficial interests
in the assets of the Trust; and

      WHEREAS, the Trust proposes to issue Trust Securities to the Company in
exchange for Debentures in an aggregate principal amount equal to the aggregate
liquidation amount of the Trust Securities issued:

      NOW, THEREFORE, in consideration of the issuance to the Company of Trust
Securities by the Trust and the acceptance of the Debentures in exchange
therefor by the Trust, and for the purpose of setting forth, as provided in the
Base Indenture, the form and substance of the Debentures and the terms,
provisions and conditions thereof, the Company covenants and agrees with the
Trustee as follows:

                                    ARTICLE I
                                   Definitions

      Section 1.1. Definition of Terms. For all purposes of this Supplemental
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:

      (a)   unless otherwise defined herein, the capitalized terms used herein
that are defined in the Base Indenture have the same meanings when used in this
Supplemental Indenture;

      (b)   the terms defined in this Article I have the meanings assigned to
them in this Article I and include the plural as well as the singular;
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      (c)   all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;

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

      (e)   a reference to a Section or Article (or subdivision thereof) or the
Recitals is to a Section or Article (or subdivision thereof) or the Recitals of
this Supplemental Indenture;

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

      (g)   headings are for convenience of reference only and do not affect
interpretation; and

      (h)   the terms defined as follows shall have the meanings assigned to
them as follows:

      "Additional Interest" has the meaning specified in Section 2.5(c).

      ["Applicable Price" means (i) in the event of a Non-Stock Fundamental
Change in which the holders of Common Stock receive only cash, the amount of
cash received by the holder of one share of Common Stock and (ii) in the event
of any other Fundamental Change, the average of the Closing Prices of the Common
Stock for the 10 Trading Days immediately prior to the record date for the
determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Fundamental Change
or, if there is no such record date, the date upon which the holders of the
Common Stock shall have the right to receive such cash, securities, property or
other assets.]

      "Base Indenture" means that Indenture dated as of September 11, 1996
between the Company and the Trustee, as it may be amended, restated,
supplemented and/or modified from time to time.

      "Business Day" means any day other than a Saturday, Sunday, or any other
day on which banking institutions in New York, New York or Los Angeles,
California are permitted or required by any applicable law to close.

      "Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation, that is acting as depositary for the
Debentures and in whose name or in the name of a nominee of that organization
shall be registered a Global Debenture and which shall undertake to effect book
entry transfers and pledges of the Debentures. The initial Clearing Agency shall
be the Depository Trust Company.

                                      -2-
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      "Closing Price" of any common stock on any day shall mean the last
reported sale price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices regular
way of such common stock, in each case on the New York Stock Exchange composite
tape or, if the common stock is not listed or admitted to trading on such
exchange, on the principal national securities exchange or quotation system on
which such common stock is listed or quoted or admitted to trading, or, if not
listed or quoted or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such common
stock as furnished by any New York Stock Exchange member firm selected from time
to time by the Board of Directors for that purpose or, if not so available in
such manner, as otherwise determined in good faith by the Board of Directors.

      "Common Security Certificate" means a definitive certificate in fully
registered form representing a Trust Common Security substantially in the form
of Exhibit A-2 to the Declaration.

      ["Common Stock" means shares of the common stock, $1.00 par value, of the
Company.]

      ["Common Stock Fundamental Change" means any Fundamental Change in which
more than 50% of the value (as determined in good faith by the Board of
Directors) of the consideration received by the holders of Common Stock consists
of common stock that, for the 10 Trading Days immediately prior to such
Fundamental Change, has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or quoted or
approved for quotation subject to notice of issuance on the Nasdaq National
Market System; provided, however, that a Fundamental Change shall not be a
Common Stock Fundamental Change unless either (i) the Company continues to exist
after the occurrence of such Fundamental Change and the outstanding Debentures
continue to exist as outstanding Debentures, or (ii) not later than the
occurrence of such Fundamental Change, the outstanding Debentures are converted
into or exchanged for [convertible] debentures of a corporation succeeding to
the business of the Company, which [convertible] debentures have terms
substantially similar to those of the Debentures as determined in good faith by
the Board of Directors.]

      "Company" has the meaning specified in the first paragraph hereof.

      "Compounded Interest" has the meaning specified in Section 4.1.

      ["Conversion Agent" means the Institutional Trustee acting as Conversion
Agent for a Holder.]

      ["Conversion Date" has the meaning specified in Section 7.2(b).]

      ["Conversion Notice" has the meaning specified in Section 7.2(a).]

      ["Conversion Price" means $______ as of the date of this Supplemental
Indenture, as may be adjusted from time to time as set forth in Article VII.]

      "Coupon Rate" has the meaning specified in Section 2.5(a).

                                      -3-
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      ["Current Market Price" means, on any date in question, the average of the
Closing Prices of such common stock for the 10 Trading Day period ending on the
earlier of the day in question and, if applicable, the day before the "ex date"
with respect to the issuance or distribution requiring such computation;
provided, however, that if more than one event occurs that would require an
adjustment pursuant to Section 7.3, the Board of Directors may make such
adjustments to the Closing Prices during such 10 Trading Day period as it deems
appropriate to effectuate the intent of the adjustments in Section 7.3, in which
case any such determination by the Board of Directors shall be set forth in a
Board Resolution and shall be conclusive.]

      "Debentures" has the meaning specified in the Recitals.

      "Declaration" means the Amended and Restated Declaration of Trust of the
Trust, dated as of ________________, ________, as it may be amended, restated,
supplemented and/or modified from time to time.

      "Deferred Interest" has the meaning specified in Section 4.1.

      "Delaware Trustee" means the Delaware Trustee, if any, of the Trust.

      "Dissolution Event" means that the Trust is to be dissolved in accordance
with the Declaration, as a result of the occurrence and continuation of a
Special Event or otherwise, and the Debentures held by the Institutional Trustee
are to be distributed to the holders of the Trust Securities issued by the Trust
pro rata in accordance with the Declaration.

      "Dissolution Tax Opinion" has the meaning specified in the Declaration.

      "Distribution" means a distribution to the holders of Trust Securities of
the amount of any interest (including Compounded Interest and Additional
Interest), premium and/or principal paid on the Debentures.

      "Distribution Date" has the meaning specified in the Rights Agreement.

      ["ex date" (1) when used with respect to any issuance or distribution,
means the first date on which such common stock trades regular way on the New
York Stock Exchange or, if not listed on the New York Stock Exchange, on any
securities exchange where such common stock may be listed or in the relevant
market from which the Closing Prices were obtained, without the right to receive
such issuance or distribution, and (2) when used with respect to any tender or
exchange offer means the first date on which such common stock trades regular
way on such securities exchange or in such market after the Expiration Time of
such offer.]

      ["Expiration Time" has the meaning specified in Section 7.3(e).]

      "Extended Interest Payment Period" has the meaning specified in Section
4.1.

      ["Fundamental Change" means the occurrence of any transaction or event or
series of transactions or events pursuant to which all or substantially all of
the Common Stock is exchanged for, converted into, acquired for or constitutes
solely the right to receive cash, securities, property or other assets (whether
by means of an exchange offer, liquidation, tender

                                      -4-
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offer, consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of any such series of transactions or
events, for purposes of adjustment of the Conversion Price, a Fundamental Change
shall be deemed to have occurred when substantially all of the Common Stock
shall have been exchanged for, converted into or acquired for, or constitute
solely the right to receive, such cash, securities, property or other assets,
but the adjustment shall be based upon the consideration that the holders of
Common Stock received in the transaction or event as a result of which more than
50% of the Common Stock outstanding shall have been exchanged for, converted
into or acquired for, or shall constitute solely the right to receive, such
cash, securities, property or other assets.]

      "Global Debenture" has the meaning specified in Section 2.4.

      "Guarantee" means that Preferred Securities Guarantee Agreement dated as
of even date hereof between the Company and the Preferred Guarantee Trustee (as
defined therein) for the benefit of the holders of Trust Preferred Securities.

      "Interest Payment Date" has the meaning specified in Section 2.5.

      "Investment Company Event" has the meaning specified in the Declaration.

      "Institutional Trustee" means the Institutional Trustee of the Trust.

      "Junior Securities," as used in the Base Indenture, shall mean (i) shares
of any stock of any class of the Company and (ii) securities of the Company
which are subordinated in right of payment to all Senior Indebtedness that may
be outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Debentures
are so subordinated as provided in Article XI.

      "List of Holders" has the meaning specified in Section 12.6.

      "Maturity Date" means the date on which the Debentures mature and on which
the principal shall be due and payable together with all accrued and unpaid
interest thereon including Compounded Interest and Additional Interest, if any.

      "Ministerial Action" has the meaning specified in the Declaration.

      "1996 Debentures" means the Company's 6-1/4% Convertible Junior
Subordinated Debentures due 2026.

      "1996 Preferred Securities" means Unocal Capital Trust's 6 1/4% Trust
Convertible Preferred Securities.

      "90-Day Period" has the meaning specified in Section 3.1.

      "Non Book-Entry Preferred Securities" has the meaning specified in Section
2.4(a)(ii).

      ["Non-Stock Fundamental Change" means any Fundamental Change other than a
Common Stock Fundamental Change.]

                                      -5-
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      "No Recognition Opinion" has the meaning specified in the Declaration.

      "Optional Redemption Price" has the meaning specified in Section 3.2.

      "Preferred Security Certificate" means a certificate representing a Trust
Preferred Security substantially in the form of Exhibit A-1 to the Declaration.

      "Principal Amount of One Debenture" means $___ as of the date of this
Supplemental Indenture.

      ["Purchased Shares" has the meaning specified in Section 7.3(e).]

      ["Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for one share of the
common stock received by holders of Common Stock in such Common Stock
Fundamental Change for the 10 Trading Days immediately prior to the record date
for the determination of the holders of Common Stock entitled to receive such
common stock or, if there is no such record date, the date upon which the
holders of Common Stock shall have the right to receive such common stock.]

      "Redemption Tax Opinion" has the meaning specified in the Declaration.

      ["Reference Date" has the meaning specified in Section 7.3(c).]

      ["Reference Market Price" initially means $______, and, in the event of
any adjustment to the Conversion Price other than as a result of a Fundamental
Change, the amount as adjusted so that the ratio of the Reference Market Price
to the Conversion Price after giving effect to any such adjustment of the
Conversion Price shall always be the same as the ratio of $_____ to the initial
Conversion Price of $_____.]

      "Regular Record Date" has the meaning specified in Section 2.5(a).

      "Regular Trustee" means the Regular Trustee of the Trust.

      "Rights" has the meaning specified in Section 7.8.

      "Rights Agreement" shall mean that certain Rights Agreement dated as or
January 5, 2000 by and between the Company and the Rights Agent (as defined
therein), as amended as of March 27 and August 2, 2002, as it may be amended,
restated, supplemented and/or modified from time to time.

      "Rights Expiration Date" shall mean the "Final Expiration Date" as defined
in the Rights Agreement.

      ["Rights Record Date" has the meaning specified in Section 7.3(b).]

      "Rights Redemption Date" shall mean the "Redemption Date" as defined in
the Rights Agreement.

      "Section 13 Event" has the meaning specified in Section 7.8(b).

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      "Series B Stock" has the meaning specified in Section 7.8(b).

      "Special Event" means a Tax Event or an Investment Company Event.

      "Special Event Redemption Price" has the meaning specified in Section 3.1.

      "Supplemental Indenture" has the meaning specified in the first paragraph
hereof.

      "Tax Event" has the meaning specified in the Declaration.

      "Trading Day" shall mean a day on which any securities are traded on the
national securities exchange or quotation system used to determine the Closing
Price.

      "Trust" has the meaning specified in the Recitals.

      "Trust Common Securities" has the meaning specified in the Recitals.

      "Trust Preferred Securities" has the meaning specified in the Recitals.

      "Trustee" has the meaning specified in the Recitals.

      "Trust Securities" has the meaning specified in the Recitals.

                                   ARTICLE II
                 General Terms and Conditions of the Debentures

      Section 2.1. Designation and Principal Amount. There is hereby authorized
a series of Debentures designated the "___% Junior Subordinated Debentures,"
limited in aggregate principal amount to $__________, which amount shall be as
set forth in a Company Order (as defined in the Base Indenture) for the
authentication and delivery of Debentures pursuant to Section 2.03 of the Base
Indenture.

      Section 2.2. Maturity. The Maturity Date is __________ 1, 20__.

      Section 2.3. Form and Payment. Except as provided in Section 2.4, the
Debentures shall be issued in fully registered certificated form without
Coupons, in denominations of the Principal Amount of One Debenture and integral
multiples thereof. Principal and interest on the Debentures issued in
certificated form will be payable, the transfer of such Debentures will be
registrable, and such Debentures will be exchangeable for Debentures bearing
identical terms and provisions, at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder (as defined in the Base Indenture) at such
address as shall appear in the Security Register (as defined in the Base
Indenture). Notwithstanding the foregoing, so long as the Holder of any
Debentures is the Institutional Trustee, the payment of the principal of and
interest (including Compounded Interest and Additional Interest, if any) on such
Debentures held by the Institutional Trustee will be made at such place and to
such account as may be designated by the Institutional Trustee.

      Section 2.4. Global Debenture. (a) In connection with a Dissolution Event,

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            (i) the Debentures in certificated form may be presented to the
      Trustee by the Institutional Trustee in exchange for a global Debenture in
      an aggregate principal amount equal to the aggregate principal amount of
      all outstanding Debentures (a "Global Debenture"), to be registered in the
      name of the Clearing Agency, or its nominee, and delivered by the Trustee
      to the Clearing Agency for crediting to the accounts of its participants
      pursuant to the instructions of the Regular Trustees. The Company upon any
      such presentation shall execute a Global Debenture in such aggregate
      principal amount and deliver the same to the Trustee for authentication
      and delivery in accordance with the Base Indenture. Payments on the
      Debentures issued as a Global Debenture will be made to the Clearing
      Agency; and

            (ii) any Preferred Security Certificate which represents Trust
      Preferred Securities other than Trust Preferred Securities held by the
      Clearing Agency or its nominee ("Non Book-Entry Preferred Securities")
      will be deemed to represent beneficial interests in Debentures having an
      aggregate principal amount equal to the aggregate liquidation amount of,
      with an interest rate identical to the distribution rate of, and accrued
      and unpaid interest (including Compounded Interest) equal to accumulated
      and unpaid distribution on the Non Book-Entry Preferred Securities until
      such Preferred Security Certificates are presented to the Security
      Registrar (as defined in the Base Indenture) for transfer or reissuance at
      which time such Preferred Security Certificates will be canceled and a
      Debenture, registered in the name of the Holder of the Preferred Security
      Certificate or the transferee of the Holder of such Preferred Security
      Certificate, as the case may be, with an aggregate principal amount equal
      to the aggregate liquidation amount of the Preferred Security Certificate
      canceled, will be executed by the Company and delivered to the Trustee for
      authentication and delivery in accordance with the Base Indenture. On
      issue of such Debentures, Debentures with an equivalent aggregate
      principal amount that were presented by the Institutional Trustee to the
      Trustee will be deemed to have been canceled.

      (b) A Global Debenture may be transferred, in whole but not in part, only
to another nominee of the Clearing Agency, or to a successor Clearing Agency
selected or approved by the Company or to a nominee of such successor Clearing
Agency.

      Section 2.5. Interest. (a) Each Debenture will bear interest at the rate
of ____% per annum (the "Coupon Rate") from _____________, _____, or the most
recent date on which interest has been paid in full, until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate, compounded quarterly, payable
(subject to the provisions of Article IV) quarterly in arrears on March 1, June
1, September 1 and December 1 of each year (each, an "Interest Payment Date"),
commencing on ____________, _____, to the Holder of such Debenture or any
Predecessor Debenture (as defined in the Base Indenture), at the close of
business on the record date for such Interest Payment Date, which record date
(the "Regular Record Date") shall be, (i) in respect of (A) Debentures of which
the Institutional Trustee is the only Holder and the related Trust Preferred
Securities are in book-entry only form or (B) a Global Debenture, the close of
business on the Business Day next preceding that Interest Payment Date; and (ii)
in respect of Debentures other than as set forth in

                                      -8-
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(i), such Regular Record Date as the Company may select for such interest
installment, which shall be any date at least one Business Day before an
Interest Payment Date.

      (b)   The amount of interest payable for any full quarterly period shall
be computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed,
shall be computed on the basis of 30-day months and, for periods of less than a
month, the actual number of days elapsed per 30-day month. In the event that any
date on which interest is payable on the Debentures is not a Business Day, then
payment of interest payable on such date shall be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.

      (c)   If, at any time while the Institutional Trustee is the Holder of any
Debentures, the Trust or the Institutional Trustee shall be required to pay any
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any such case, the Company shall pay as additional interest
("Additional Interest") on the Debentures held by the Institutional Trustee such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Institutional Trustee after paying such taxes,
duties, assessments or other governmental charges will be equal to the amounts
the Trust and the Institutional Trustee would have received had no such taxes,
duties, assessments or other government charges been imposed.

                                   ARTICLE III
                          Redemption of the Debentures

      Section 3.1. Special Event Redemption. If a Special Event has occurred and
is continuing and:

      (a)   the Company has received a Redemption Tax Opinion; or

      (b)   the Regular Trustees shall have been informed by independent tax
counsel experienced in such matters that, for substantive reasons, it cannot
deliver a No Recognition Opinion to the Trust,

then, notwithstanding Section 3.2 but subject to Section 3.3, the Company shall
have the right upon not less than 30 days nor more than 60 days notice to the
Holders of the Debentures to redeem the Debentures, in whole or in part, for
cash within 90 days following the occurrence of such Special Event (the "90-Day
Period") at a redemption price equal to 100% of the principal amount to be
redeemed (the "Special Event Redemption Price") plus any accrued and unpaid
interest (including Compounded and Additional Interest) thereon to but excluding
the date of such redemption, provided that, if at the time there is available to
the Company the opportunity to eliminate, which elimination shall be complete
within the 90-Day Period, such Special Event by taking some Ministerial Action,
the Company shall pursue such Ministerial Action in lieu of redemption, and,
provided, further, that the Company shall have no right to redeem the

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Debentures while the Trust is pursuing any Ministerial Action pursuant to its
obligations under the Declaration; provided such Ministerial Action can
eliminate such Special Event during the 90-Day Period. The Special Event
Redemption Price, plus such accrued and unpaid interest, shall be paid prior to
12:00 noon, New York time, on the date fixed by the Company for such redemption
or at such earlier time as the Company determines, provided that the Company
shall deposit with the Trustee an amount sufficient to pay the Special Event
Redemption Price plus such accrued and unpaid interest thereon by 10:00 a.m.,
New York time, on the date such Special Event Redemption Price is to be paid.

      Section 3.2. Optional Redemption by Company. Subject to the provisions of
Section 3.3 and to the provisions of Article 3 of the Base Indenture, the
Company shall have the right to redeem the Debentures, in whole or in part at
any time on or after ____________, ______. Any redemption pursuant to this
Section 3.2 will be made upon not less than 30 days nor more than 60 days notice
to the Holders of the Debentures, at the following prices (expressed as
percentages of the principal amount of the Debentures) (the "Optional Redemption
Price") together with accrued and unpaid interest, including Compounded and
Additional Interest to, but excluding, the redemption date, if redeemed during
the 12-month period beginning on ____________1 (other than the first period,
which will begin on ___________, _______) of the following years:

<TABLE>
<CAPTION>
            Year                    Redemption Price
            ____                    ________________
<S>                                 <C>
            _____                        ______%
            _____                        ______%
            _____                        ______%
            _____                        ______%
            _____                        ______%
</TABLE>

and 100% if redeemed on or after __________ 1, ______.

      The Company may not redeem any Debentures unless all accrued and unpaid
interest has been paid on all outstanding Debentures for all quarterly interest
payment periods terminating on or prior to the last Interest Payment Date before
the date of redemption. If Debentures are redeemed on any March 1, June 1,
September 1, or December 1, accrued and unpaid interest shall be payable to
Holders on the relevant record date. The Company shall issue a press release
announcing any redemption pursuant to this Section 3.2.

      The Optional Redemption Price plus such accrued and unpaid interest
thereon shall be paid prior to 12:00 noon, New York time, on the date fixed by
the Company for such redemption or at such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Optional Redemption Price, plus accrued and unpaid

                                      -10-
<PAGE>
interest thereon, by 10:00 a.m., New York time, on the date such Optional
Redemption Price is to be paid.

      Section 3.3. Redemption of Less Than All Debentures. If the Debentures are
only partially redeemed, the Debentures will be redeemed pro rata or by lot or
by any other method utilized by the Trustee. The Company may not redeem any
Debentures unless all accrued and unpaid interest has been paid on all of the
outstanding Debentures for all quarterly interest periods terminating on or
prior to the last Interest Payment Date before the date of redemption.

      Section 3.4. No Sinking Fund. The Debentures are not entitled to the
benefit of any sinking fund.

                                   ARTICLE IV
                      Extension of Interest Payment Period

      Section 4.1. Extension of Interest Payment Period. As long as an Event of
Default under Section 6.01(a) of the Base Indenture shall not have occurred and
be continuing, the Company shall have the right, at any time and from time to
time during the term of the Debentures, to defer payments of interest by
extending the interest payment period of such Debentures for a period not
exceeding 20 consecutive quarters (an "Extended Interest Payment Period"),
during which Extended Interest Payment Period no interest shall be due and
payable on the Debentures; provided that no Extended Interest Payment Period may
extend beyond the Maturity Date. To the extent permitted by applicable law,
interest, the payment of which has been deferred during an Extended Interest
Payment Period, shall bear interest thereon at the Coupon Rate compounded
quarterly for each quarter of the Extended Interest Payment Period ("Compounded
Interest"). Before the termination of any such Extended Interest Payment Period,
the Company may further extend such Extended Interest Payment Period, provided
that such Extended Interest Payment Period together with all such previous and
further extensions thereof shall not exceed 20 consecutive quarters, or extend
beyond the Maturity Date. At the end of the Extended Interest Payment Period,
the Company shall pay all interest accrued and unpaid on the Debentures,
including any Additional Interest and Compounded Interest (together, "Deferred
Interest") that shall be payable to the Holders of Debentures in whose names the
Debentures are registered in the Security Register on the first record date
after the termination of the Extended Interest Payment Period. Upon the
termination of any Extended Interest Payment Period and upon the payment of all
Deferred Interest then due, the Company may commence a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at the end
thereof, but the Company may pay at any time all or any portion of the interest
accrued during an Extended Interest Payment Period.

      Section 4.2. Notice of Extension.

      (a)   If the Institutional Trustee shall be the only Holder of the
Debentures at the time the Company elects an Extended Interest Payment Period,
the Company shall give written notice to the Regular Trustees, the Institutional
Trustee and the Trustee of its election of such Extended Interest Payment Period
one Business Day before the earlier of (i) the date on which Distributions on
the Trust Securities are payable for the first quarter of such Extended Interest

                                      -11-
<PAGE>
Payment Period, or (ii) the date the Regular Trustees are required to give
notice of the record date or the date such Distributions are payable for the
first quarter of such Extended Interest Payment Period to any national stock
exchange or other organization on which the Trust Preferred Securities are
listed or quoted or to holders of Trust Preferred Securities, but in any event
at least one Business Day before such record date or such payment date.

      (b)   If the Institutional Trustee shall not be the only Holder of the
Debentures at the time the Company elects an Extended Interest Payment Period,
the Company shall give the Holders of Debentures written notice of its election
of such Extended Interest Payment Period at least 10 Business Days before the
earlier of (i) the Interest Payment Date for the first quarter of such Extended
Interest Payment Period, or (ii) the date the Company is required to give notice
of the record date or the date of such interest payment for the first quarter of
such Extended Interest Payment Period to any national stock exchange or other
organization on which the Debentures are listed or quoted or to Holders of
Debentures.

      (c)   The quarter in which any notice is given pursuant to subsections (a)
or (b) of this Section 4.2 shall be, and shall be counted as, one of the 20
quarters permitted in the maximum Extended Interest Payment Period permitted
under Section 4.1.

      Section 4.3. Limitation of Transactions. If the Company shall exercise its
right to defer payment of interest as provided in Section 4.1, then during such
Extended Interest Payment Period (a) the Company shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of shares of capital stock in
connection with any employee benefit plan or program, director plan or program,
dividend reinvestment, stock repurchase, or other similar plans available to
stockholders of the Company, or any option, warrant, right, or exercisable,
exchangeable, or convertible security outstanding as of __________ __, _____,
(ii) as a result of a reclassification of the Company's capital stock pursuant
to the exchange or conversion provisions of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock for
another class or series of its capital stock or the capital securities of a
subsidiary (including a trust such as the Trust), (iii) any declaration of a
dividend in connection with the implementation of a shareholder's rights plan,
or the issuance of shares under any such plan, or the redemption or repurchase
of any rights issued thereunder, or (iv) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged),
and (b) the Company shall not make any payment of interest, principal or
premium, if any, on, or repay, repurchase or redeem, or make any guarantee
payment (other than pursuant to the Guarantee, if otherwise permitted under the
Company's preferred securities guarantee of the 1996 Preferred Securities , or
pursuant to such guarantee of the 1996 Preferred Securities) with respect to,
any debt securities issued by the Company that rank pari passu with or junior in
right of payment to the Debentures (other than the 1996 Debentures).

                                      -12-
<PAGE>
                                    ARTICLE V
                                    Expenses

      Section 5.1. Payment of Expenses. In connection with the issuance of the
Debentures to the Institutional Trustee in exchange for the Trust Securities and
in connection with the issuance of the Trust Securities by the Trust to the
Company, the Company, in its capacity as borrower with respect to the
Debentures, shall:

      (a)   pay all costs and expenses relating to the offering, sale and
issuance of the Debentures and the Trust Securities, including fees payable
pursuant to any underwriting agreements by and among the Company, the Trust and
the underwriters named therein, and compensation of the Trustee under the Base
Indenture in accordance with the provisions of Section 7.06 of the Base
Indenture;

      (b)   pay all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization, maintenance and dissolution
of the Trust, the fees and expenses of the Institutional Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of the Trust,
including, without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets);

      (c)   pay all costs and expenses related to the enforcement by the
Institutional Trustee of its rights as a Holder of Debentures;

      (d)   be primarily liable for any indemnification obligations arising with
respect to the Declaration; and

      (e)   pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.

      Section 5.2. Payment Upon Resignation or Removal. Upon termination of this
Supplemental Indenture or the Base Indenture or the removal or resignation of
the Trustee pursuant to Section 7.9 of the Base Indenture, the Company shall pay
to the Trustee all amounts accrued to the date of such termination, removal or
resignation.

                                   ARTICLE VI
                                    Covenants

      Section 6.1. Covenants as to the Trust. If the Institutional Trustee is
the Holder of the Debentures, the Company shall (a) maintain 100% direct or
indirect ownership of the Trust Common Securities; provided, however, that any
permitted successor of the Company under the Base Indenture may succeed to the
Company's ownership of the Common Securities, (b) use its reasonable efforts to
cause the Trust (i) to remain a statutory trust, except in connection with a
distribution of Debentures to the holders of Trust Securities, the redemption of
all of the Trust

                                      -13-
<PAGE>
Securities, or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration, and (ii) to continue to be classified as a grantor
trust for United States federal income tax purposes, and (c) use its reasonable
efforts to cause each holder of Trust Securities to be treated as owning an
undivided beneficial interest in the Debentures.

      Section 6.2. Listing or Quotation of Debentures. If the Debentures are to
be distributed to the holders of Trust Securities upon a Dissolution Event, the
Company shall use its reasonable efforts to arrange to list, or seek approval
for quotation of, such Debentures on any stock exchange or other organization on
which the Trust Preferred Securities are then listed or quoted, if any.

                                  [ARTICLE VII
                            Conversion of Debentures

      Section 7.1. Conversion Rights. Subject to and upon compliance with the
provisions of this Article VII, the Debentures are convertible, at the option of
the Holder thereof, at any time beginning _________ ___, _____ and prior to the
close of business (New York time) on __________ 1, 20__, (or, in the case of
Debentures called for redemption, prior to the close of business (New York time)
on the Business Day prior to the corresponding redemption date) into that number
of fully paid and nonassessable shares of Common Stock obtained by dividing the
principal amount of the Debentures to be converted by the Conversion Price. For
example, the initial Conversion Price is $________ and thus each Debenture is
initially convertible into ______________ shares of Common Stock (calculated by
dividing the Principal Amount of One Debenture as of the date of this
Supplemental Indenture by the initial Conversion Price). The Conversion Price is
subject to adjustment as described in this Article VII. All calculations under
this Article VII shall be made to the nearest cent or to the nearest 1/l00th of
a share, as the case may be.

      Section 7.2. Conversion Procedures. (a) In order to convert all or a
portion of the Debentures, the Holder thereof shall (i) sign and deliver to the
Conversion Agent an irrevocable notice of election to convert ("Conversion
Notice") setting forth the principal amount of Debentures to be converted (which
shall equal the Principal Amount of One Debenture or integral multiples
thereof), together with the name or names, if other than the Holder, in which
the shares of Common Stock should be issued upon conversion, (ii) if such
Debentures are definitive Debentures, surrender to the Conversion Agent the
Debentures to be converted, with such endorsements or transfer documents as
requested by the Conversion Agent, and (iii) pay any transfer or similar tax, if
required. In addition, a holder of Trust Securities may exercise its right under
the Declaration to convert such Trust Securities into Common Stock by delivering
to the Conversion Agent an irrevocable conversion request setting forth the
information called for by the preceding sentence and directing the Conversion
Agent (i) to exchange such Trust Securities for a portion of the Debentures held
by the Trust (at an exchange rate of $1 of principal amount of Debentures for
each $1 liquidation amount of Trust Securities) and (ii) to immediately convert
such Debentures, on behalf of such holder, into Common Stock pursuant to this
Article VII and, if such Trust Securities are in definitive form, surrendering
such Preferred Security Certificates or Common Security Certificates, as the
case may be, duly endorsed or assigned to the Trust or in blank. So long as any
Trust Preferred Securities are outstanding, the

                                      -14-
<PAGE>
Trust shall not convert any Debentures except pursuant to a conversion request
delivered to the Conversion Agent by a holder of Trust Securities.

      Accrued but unpaid interest will not be paid in cash on Debentures that
are converted, nor will such accrued interest be converted into additional
shares of Common Stock upon conversion of the Debentures, but such accrued
interest shall be deemed to be paid in full and then returned by the Holder to
the Company as partial consideration for Common Stock received on conversion,
and the Company shall not make nor be required to make any other payment,
adjustment or allowance with respect to accrued but unpaid interest on the
Debentures being converted, which shall be deemed to be paid in full.

      If any Debentures are converted into shares of Common Stock during the
period from (but excluding) a record date to (and including) the next succeeding
interest payment date, then either (i) if such Debentures have been called for
redemption on a redemption date that occurs during such period, or are to be
redeemed in connection with a Special Event which occurs during such period, the
Company shall not be required to pay interest on such Interest Payment Date in
respect of such Debentures or (ii) if otherwise converted during such period,
such Debentures shall be accompanied by funds equal to the interest payable on
such succeeding Interest Payment Date on the principal amount so converted.

      (b)   Each conversion shall be deemed to have been effected immediately
prior to the close of business on the day on which the Conversion Notice was
received (the "Conversion Date") by the Conversion Agent from the Holder or from
a holder of the Trust Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such Common Stock as
of the Conversion Date. As promptly as practicable on or after the Conversion
Date, the Company shall issue and deliver at the office of the Conversion Agent,
unless otherwise directed by the Holder in the Conversion Notice, a certificate
or certificates for the number of full shares of Common Stock issuable upon such
conversion, together with the cash payment, if any, in lieu of any fraction of
any share to the Person or Persons entitled to receive the same. The Conversion
Agent shall deliver such certificate or certificates to such Person or Persons.

      (c)   The Company's delivery upon conversion of the fixed number of shares
of Common Stock into which the Debentures are convertible (together with the
cash payment, if any, in lieu of fractional shares) shall be deemed to satisfy
the Company's obligation to pay the principal amount at the Maturity Date of the
portion of Debentures so converted and any unpaid interest (including Compounded
Interest) accrued on such Debentures at the time of such conversion.

      (d)   No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Company shall pay in cash an amount equal
to the same fraction of the Closing Price of such fractional interest on the
Conversion Date, or, if such day is not a Trading Day, on the next Trading Day.
The Company shall pay such cash amount, if any, to the Conversion Agent and the
Conversion Agent in turn will pay such cash amount, if any, to the Holder of the
Debentures or the holder of the Trust Securities so converted, as appropriate.

                                      -15-

<PAGE>
      (e)   In the event of the conversion of any Debenture in part only, a new
Debenture or Debentures for the unconverted portion thereof will be issued in
the name of the Holder thereof upon the cancellation thereof in accordance with
Section 2.08 of the Base Indenture.

      (f)   In effecting the conversion transactions described in this Section
7.2, the Conversion Agent is acting as agent of the holders of Trust Securities
(in the exchange of Trust Securities for Debentures) and as agent of the Holders
of Debentures (in the conversion of Debentures into Common Stock), as the case
may be. The Conversion Agent is hereby authorized (i) to exchange Debentures
held by the Trust from time to time for Trust Securities in connection with the
conversion of such Trust Securities in accordance with this Article VII and (ii)
to convert all or a portion of the Debentures into Common Stock and thereupon to
deliver such shares of Common Stock in accordance with the provisions of this
Article VII and to deliver to the Trust a new Debenture or Debentures for any
resulting unconverted principal amount.

      Section 7.3. Certain Conversion Price Adjustments. The Conversion Price
shall be adjusted from time to time as follows:

      (a)   In case the Company shall, while any of the Debentures are
outstanding, (i) pay a dividend or make a distribution with respect to Common
Stock in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, (iii) combine outstanding shares of Common Stock into a smaller number of
shares or (iv) issue by reclassification of shares of Common Stock any shares of
capital stock of the Company, the conversion privilege and the Conversion Price
for the Debentures shall be adjusted so that the Holder of any Debenture
thereafter surrendered for conversion shall be entitled to receive the number of
shares of capital stock of the Company which such Holder would have owned
immediately following such action had such Debenture been converted immediately
prior thereto. An adjustment made pursuant to this subsection (a) shall become
effective immediately after the record date in the case of a dividend or other
distribution and shall become effective immediately after the effective date in
case of a subdivision, combination or reclassification (or immediately after the
record date if a record date shall have been established for such event). If, as
a result of an adjustment made pursuant to this subsection (a), the Holder of
any Debenture thereafter surrendered for conversion shall become entitled to
receive shares of two or more classes or series of capital stock of the Company,
the Board of Directors (as defined in the Base Indenture) (whose determination
shall be conclusive and shall be described in a Board Resolution filed with the
Trustee) shall determine in good faith the allocation of the adjusted Conversion
Price for the Debentures between or among shares of such classes or series of
capital stock.

      (b)   In case the Company shall, while any of the Debentures are
outstanding, issue rights or warrants to all holders of Common Stock entitling
them (for a period expiring within 45 days after the record date for the
determination of stockholders entitled to receive such rights or warrants (the
"Rights Record Date")) to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price per share of Common Stock on
the Rights Record Date, the Conversion Price for the Debentures shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of issuance of such
rights or warrants by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights or

                                      -16-
<PAGE>
warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered for subscription or purchase would purchase at
such current market price, and of which the denominator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall become effective immediately
after the Rights Record Date. To the extent that shares of Common Stock are not
so delivered after the expiration of such rights or warrants, the Conversion
Price shall be readjusted to the Conversion Price which would then be in effect
if such date fixed for the determination of stockholders entitled to receive
such rights or warrants had not been fixed. For the purposes of this subsection,
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company. The Company shall not issue any
rights or warrants in respect of shares of Common Stock held in the treasury of
the Company. In case any rights or warrants referred to in this subsection in
respect of which an adjustment shall have been made shall expire unexercised
within 45 days after the same shall have been distributed or issued by the
Company, the Conversion Price shall be readjusted at the time of such expiration
to the Conversion Price that would have been in effect if no adjustment had been
made on account of the distribution or issuance of such expired rights or
warrants.

      (c)   Subject to the last sentence of this subsection (c), in case the
Company shall, by dividend or otherwise, distribute to all holders of Common
Stock evidences of its indebtedness, shares of any class or series of capital
stock (other than Common Stock), cash or assets or rights or warrants to
subscribe for or purchase any of its securities (excluding any rights or
warrants referred to in subsection (b), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in subsection
(a) of this Section 7.3), the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this subsection (c) by a fraction of which the numerator shall
be the Current Market Price per share of the Common Stock on the date fixed for
the payment of such distribution (the "Reference Date") less the fair market
value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors), on the Reference Date, of the portion of the evidences of
indebtedness, shares of capital stock, cash and assets so distributed or of such
subscription rights or warrants applicable to one share of Common Stock and the
denominator shall be such Current Market Price per share of the Common Stock,
such reduction to become effective immediately prior to the opening of business
on the day following the Reference Date; provided, however, that in the event
the numerator shall be less than one, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder of Debentures shall have
the right to receive upon conversion the amount of such distribution such Holder
would have received had such Holder converted each Debenture immediately prior
to the Reference Date. In the event that such dividend or distribution is not so
paid or made, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such dividend or distribution had not
occurred. If the Board of Directors determines the fair market value of any
distribution for purposes of this subsection (c) by reference to the actual or
when issued trading market for any securities comprising such distribution, it
must in doing so consider the prices in such market over the same period used in
computing the Current Market Price per share of Common Stock. For purposes of
this subsection (c), any dividend or distribution that includes shares of Common
Stock or rights or warrants to subscribe for or purchase shares of Common Stock
shall be

                                      -17-
<PAGE>
deemed instead to be (i) a dividend or distribution of the evidences of
indebtedness, shares of capital stock, cash or assets other than such shares of
Common Stock or such rights or warrants (making any Conversion Price reduction
required by this subsection (c) immediately followed by (ii) a dividend or
distribution of such shares of Common Stock or such rights or warrants (making
any further Conversion Price reduction required by subsection (a) or (b)),
except (A) the Reference Date of such dividend or distribution as defined in
this subsection (c) shall be substituted as (1) "the record date in the case of
a dividend or other distribution," and (2) "the record date for the
determination of stockholders entitled to receive such rights or warrants" and
(3) "the date fixed for such determination" within the meaning of subsections
(a) and (b) and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed outstanding for purposes of computing any
adjustment of the Conversion Price in subsection (a).

      (d)   In case the Company shall pay or make a dividend or other
distribution on the Common Stock exclusively in cash (excluding any quarterly
cash dividend on Common Stock to the extent that the aggregate cash dividend per
share of Common Stock in any quarter does not exceed the greater of (i) the
amount per share of Common Stock of the next preceding quarterly dividend on
Common Stock to the extent such preceding quarterly dividend did not require an
adjustment of the Conversion Price pursuant to this subsection (d) (as adjusted
to reflect subdivisions or combinations of Common Stock), and (ii) ____ % of the
Current Market Price per share, and excluding any dividend or distribution in
connection with the liquidation, dissolution or winding-up of the Company), the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the effectiveness of the Conversion Price reduction contemplated by this
subsection (d) by a fraction of which the numerator shall be the Current Market
Price per share of Common Stock on the date fixed for the payment of such
distribution less the amount of cash so distributed (and not excluded as
provided above) applicable to one share of Common Stock and the denominator
shall be such Current Market Price per share of the Common Stock, such reduction
to become effective immediately prior to the opening of business on the day
following the date fixed for the payment of such distribution; provided,
however, that in the event the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the Current Market Price
per share of Common Stock on the record date mentioned above, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder of
Debentures shall have the right to receive upon conversion the amount of cash
such Holder would have received had such Holder converted each Debenture
immediately prior to the record date for the distribution of the cash. If an
adjustment is required to be made pursuant to this subsection (d) as a result of
a distribution that is a quarterly dividend, such adjustment shall be based upon
the amount by which such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded as provided above. If an adjustment is
required to be made pursuant to this subsection (d) as a result of a
distribution that is not a quarterly dividend, such adjustment shall be based
upon the full amount of the distribution. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such record
date had not been fixed.

      (e)   In case a tender or exchange offer (other than an odd-lot offer)
made by the Company or any Subsidiary of the Company for all or any portion of
the Common Stock shall expire and such tender or exchange offer shall involve
the payment by the Company or such Subsidiary of consideration per share of
Common Stock having a fair market value (as

                                      -18-
<PAGE>
determined in good faith by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) at the last time (the
"Expiration Time") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) that exceeds the Closing Price of
the Common Stock on the Trading Day next succeeding the Expiration Time, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the effectiveness of the Conversion Price reduction contemplated by this
subsection (e) by a fraction (which shall not be greater than one) of which the
numerator shall be the number of shares of Common Stock outstanding (including
any tendered or exchanged shares) at the Expiration Time multiplied by the
Closing Price of Common Stock on the Trading Day next succeeding the Expiration
Time and the denominator shall be the sum of (i) the fair market value
(determined as aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the tender
or exchange offer) of all shares validly tendered or exchanged and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares") and (ii) the product of
the number of shares of the Common Stock outstanding (less any Purchased Shares)
at the Expiration Time and the Closing Price of Common Stock on the Trading Day
next succeeding the Expiration Time, such reduction to become retroactively
effective immediately prior to the opening of business on the day following the
Expiration Time.

      (f)   In case a tender or exchange offer made by a Person other than the
Company or any Subsidiary of the Company for all or any portion of the Common
Stock shall expire and such tender or exchange offer shall involve the payment
by a Person other than the Company or any Subsidiary of the Company of
consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) at the applicable Expiration
Time that exceeds the Closing Price of the Common Stock on the Trading Day next
succeeding the applicable Expiration Time in which as of the closing date of the
offer the Board of Directors of the Company is not recommending rejection of the
offer, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the effectiveness of the Conversion Price reduction contemplated by this
subsection (f) by a fraction (which shall not be greater than one) of which the
numerator shall be the number of shares of Common Stock outstanding (including
any tendered or exchanged shares) at the Expiration Time multiplied by the
Closing Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (i) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the Purchased Shares and (ii) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Closing Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction to become retroactively effective
immediately prior to the opening of business on the day following the Expiration
Time; provided, however, that the reduction of the Conversion Price contemplated
by this subsection (f) will only be made if the tender offer or exchange offer
is made for an amount that increases that Person's ownership of Common Stock to
more than 25% of the total shares of Common Stock outstanding and provided,
further, that the reduction of the Conversion Price contemplated by this
subsection (f) will not be made if as of the close of the offer, the offering
documents with respect to such offer disclose a plan or an intention to cause

                                      -19-
<PAGE>
the Company to engage in a consolidation or merger of the Company or a sale of
all or substantially all of the assets of the Company.

      (g)   The Company may make such reductions in the Conversion Price, in
addition to those required by subsections (a) through (f), as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. The Company, at its option, may from
time to time reduce the Conversion Price by any amount for any period of time if
the period is at least 20 days, the reduction is irrevocable during the period,
and the Board of Directors shall have made a determination in good faith that
such reduction would be in the best interest of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to Holders of record of the
Debentures a notice of the reduction at least 15 days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period it will be in effect.

      (h)   No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1 % in the
Conversion Price; provided, however, that any adjustments which by reason of
this subsection (h) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required.

      (i)   If any action would require adjustment of the Conversion Price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the Holder of Debentures.

      Section 7.4. Merger, Consolidation, or Sale of Assets. (a) In the event
that the Company shall be a party to (i) any recapitalization or
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination of the Common Stock), (ii) any consolidation of the
Company with, or merger of the Company into, any other Person, any merger of
another Person into the Company (other than a merger that does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock), (iii) any sale or transfer of all or substantially all of the
assets of the Company, (iv) any compulsory share exchange, or (v) any other
transaction, in any such case pursuant to which shares of Common Stock shall be
converted into the right to receive other securities, cash or other property,
then lawful provision shall be made as part of the terms of such transaction
whereby the Holder of each Debenture then outstanding shall have the right
thereafter to convert such Debenture only into:

            (A)   in the case of any such transaction that does not constitute a
      Common Stock Fundamental Change and subject to funds being legally
      available for such purpose under applicable law at the time of such
      conversion, the kind and amount of the securities, cash and/or other
      property that would have been receivable upon such recapitalization,
      reclassification, consolidation, merger, sale, transfer, or share exchange
      by a holder of the number of shares of Common Stock issuable upon
      conversion of such

                                      -20-
<PAGE>
      Debenture immediately prior to such recapitalization, reclassification,
      consolidation, merger, sale, transfer or share exchange, after giving
      effect, in the case of any such transaction that is a Non-Stock
      Fundamental Change, to any adjustment in the Conversion Price in
      accordance with clause (i) of subsection (c) of this Section 7.4; and

            (B)   in the case of any such transaction that constitutes a Common
      Stock Fundamental Change, common stock of the kind received by holders of
      Common Stock as a result of such Common Stock Fundamental Change in an
      amount of shares of common stock of such kind equal to the Principal
      Amount of One Debenture divided by the Conversion Price as adjusted in
      accordance with clause (ii) of subsection (c) of this Section 7.4.

      (b)   The company or the Person (i) formed by such consolidation, (ii)
resulting from such merger, (iii) that acquired such assets or the shares of the
Common Stock or (iv) that is the issuer of the securities into which the Common
Stock was converted into the right to receive, as the case may be, shall make
provision in its certificate or articles of incorporation or other constituent
document to establish the rights set forth in this Section 7.4. Such certificate
or articles of incorporation or other constituent document shall provide for
adjustments that, for events subsequent to the effective date of such
certificate or articles of incorporation or other constituent document (or the
amendment thereto), shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article VII. The above provisions shall
similarly apply to successive transactions of the foregoing type.

      (c)   Notwithstanding any other provision of this Section 7.4 to the
contrary, if any Fundamental Change occurs, then the Conversion Price in effect
will be adjusted immediately after such Fundamental Change as follows:

            (i)   in the case of a Non-Stock Fundamental Change, the Conversion
      Price immediately following such Non-Stock Fundamental Change shall be the
      lower of (A) the Conversion Price in effect immediately prior to such
      Non-Stock Fundamental Change, but after giving effect to any other prior
      adjustments effected pursuant to Section 7.3, and (B) the product of (1)
      the greater of the Applicable Price or the then applicable Reference
      Market Price and (2) a fraction, the numerator of which shall be the
      Principal Amount of One Debenture and the denominator of which shall be
      (x) the amount of the Optional Redemption Price set forth in Section 3.2
      for the Debentures if the redemption date were the date of such Non-Stock
      Fundamental Change (or, for the period from the date of this Supplemental
      Indenture through _________, ____, the twelve-month periods commencing on
      ___________ 1, _____ and __________ 1, _____ and the period from
      __________ 1, ____ to __________ 1, ______, the product of ______,
      _______, _____ and _______, respectively, multiplied by the Principal
      Amount of One Debenture) plus (y) any then-accrued and unpaid interest on
      the Principal Amount of One Debenture to but excluding the date of such
      Non-Stock Fundamental Change; and

            (ii)  in the case of a Common Stock Fundamental Change, the
      Conversion Price immediately following such Common Stock Fundamental
      Change shall be the Conversion Price in effect immediately prior to such
      Common Stock Fundamental Change, but after giving effect to any other
      prior adjustments effected pursuant to Section

                                      -21-
<PAGE>
      7.3, multiplied by a fraction, the numerator of which is the Purchaser
      Stock Price and the denominator of which is the Applicable Price;
      provided, however, that in the event of a Common Stock Fundamental Change
      in which (A) 100% of the value of the consideration received by a holder
      of Common Stock is common stock of the successor, acquiror or other third
      party (and cash, if any, paid with respect to any fractional interests in
      such common stock resulting from such Common Stock Fundamental Change) and
      (B) all of the Common Stock shall have been exchanged for, converted into
      or acquired for, common stock of the successor, acquiror or other third
      party (and cash, if any, paid with respect to any fractional interests in
      such common stock resulting from such Common Stock Fundamental Change),
      the Conversion Price immediately following such Common Stock Fundamental
      Change shall be the Conversion Price in effect immediately prior to such
      Common Stock Fundamental Change divided by the number of shares of common
      stock of the successor, acquiror or other third party received by a holder
      of one share of Common Stock as a result of such Common Stock Fundamental
      Change.

      Section 7.5. Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted as provided in this Article VII:

      (a)   the Company shall compute the adjusted Conversion Price and shall
prepare a certificate signed by the Chief Financial Officer or the Treasurer of
the Company setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the Trustee and the transfer agent for
the Trust Preferred Securities and the Debentures; and

      (b)   a notice stating the Conversion Price has been adjusted and setting
forth the adjusted Conversion Price shall as soon as practicable be mailed by
the Company to all record holders of Trust Preferred Securities and Holders of
the Debentures at their last addresses as they appear upon the securities
transfer books of the Company and the Trust.

      Section 7.6. Prior Notice of Certain Events. In case:

      (a)   the Company shall (i) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in shares
of Common Stock or (B) a dividend payable in cash that would not require an
adjustment pursuant to Section 7.3(c) or (d) or (ii) authorize a tender or
exchange offer that would require an adjustment pursuant to Section 7.3(e);

      (b)   the Company shall authorize the granting to all holders of Common
Stock of rights or warrants to subscribe for or purchase any shares of stock of
any class or series or of any other rights or warrants;

      (c)   of any reclassification of Common Stock (other than a subdivision or
combination of the outstanding Common Stock, or a change in par value, or from
par value to no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company shall be required, or of the sale or transfer
of all or substantially all of the assets of the Company or of any compulsory
share exchange whereby the Common Stock is converted into other securities, cash
or other property; or

                                      -22-
<PAGE>
      (d)   of the voluntary or involuntary dissolution, liquidation or winding
up of the Company;

then the Company shall (i) if any Trust Preferred Securities are outstanding,
cause to be filed with the transfer agent for the Trust Preferred Securities,
and shall cause to be mailed to the holders of record of the Trust Preferred
Securities, at their last addresses as they shall appear upon the securities
transfer books of the Trust or (ii) shall cause to be mailed to all Holders at
their last addresses as they shall appear in the Security Register, at least 15
days prior to the applicable record or effective date hereinafter specified, a
notice stating (A) the date on which a record (if any) is to be taken for the
purpose of such dividend, distribution, rights or warrants, or, if a record is
not to be taken, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution, rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, sale, transfer, share exchange, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).

      Section 7.7. Certain Plans, Rights or Securities. Notwithstanding the
foregoing provisions, no adjustment of the Conversion Price shall be made upon
(a) the issuance of any shares of Common Stock pursuant to any plan providing
for the reinvestment of dividends or interest payable on securities of the
Company and the investment of additional optional amounts in shares of Common
Stock under any such plan, (b) the issuance of any shares of Common Stock, or
options or rights to purchase shares of Common Stock pursuant to any present or
future employee benefit plan or program, or present or future director plan or
program of the Company or (c) the issuance of any shares of Common Stock
pursuant to any option, warrant, right or exercisable, exchangeable or
convertible security outstanding as of __________, _____. There shall also be no
adjustment of the Conversion Price in case of the issuance of any stock (or
securities convertible into or exchangeable for stock) of the Company except as
specifically described in this Article VII.

      Section 7.8. Preferred Stock Purchase Rights. (a) So long as Rights of a
kind similar to those declared and distributed by the Board of Directors in
January 2000 pursuant to the Rights Agreement, as the same may hereafter be
amended or reissued ("Rights"), are attached to the outstanding shares of Common
Stock, each share of Common Stock issued upon conversion of the Debentures prior
to the earliest of any Distribution Date, the date of redemption of the Rights
or the date of expiration of the Rights shall be issued with Rights per such
share of Common Stock in a number equal to the number of Rights then attached to
each outstanding share of Common Stock.

      (b)   For the purposes of Section 7.3(b), upon the earlier to occur of (i)
the eleventh Business Day (as such term is defined in the Rights Agreement)
following a Shares Acquisition Date and (ii) an event described in Section 13 of
the Rights Agreement (a "Section 13 Event"), then an issuance of rights to
purchase shares of Common Stock during a period not exceeding 45 days from the
date of such dividend or other distribution shall be deemed to have occurred,

                                      -23-
<PAGE>
unless a Rights Redemption Date or a Rights Expiration Date has occurred prior
to such eleventh Business Day (as defined in the Rights Agreement) or such
Section 13 Event, as the case may be. For purposes of the reduction of the
conversion price provided for in Section 7.3(b) upon such deemed issuance of
rights, each share of Series B Junior Participating Preferred Stock of the
Company (the "Series B Stock") shall be deemed to constitute 100 shares of
Common Stock (subject to adjustment as provided in the Rights Plan), and the
date fixed for determination of stockholders entitled to receive such rights
shall be the close of business on the tenth such Business Day following such
Shares Acquisition Date or the date of such Section 13 Event, as the case may
be; provided, however, that the current market price per share of the Common
Stock shall be determined based on the 10 consecutive Trading Days prior to and
including the Distribution Date.

      (c)   For purposes of Section 7.3(b), the redemption by the Company of
Rights shall be deemed to be an expiration of such rights.

      (d)   In lieu of any adjustment to the Conversion Price as required by
subsections (b) and (e) of this Section 7.8, the Company may amend the Rights
Agreement to provide that upon conversion of Debentures the Holder will receive,
in addition to the common stock issuable upon conversion, the Rights that were
attached to such shares of Common Stock prior to the Distribution Date.

      (e)   If any Debenture has been converted on or after the Distribution
Date and on or before the tenth Business Day (as defined in the Rights
Agreement) following such Shares Acquisition Date or the date of such Section 13
Event, as the case may be, then as soon as practicable following the date on
which the adjustment required by subsection (b) of this Section 7.8 is made, the
Company shall issue to the holder of the Debenture so converted a number of
additional shares of Common Stock (and cash in lieu of any fractional share)
that would have been issuable upon such conversion had such adjustment been made
immediately prior to such conversion.

      Section 7.9. Special Provisions Regarding Adjustment of Conversion Price
or Other Provisions. In the event that the provisions of this Article VII
specifying the methods by which the Conversion Price or other provisions are
adjusted would require an adjustment that is determined in good faith by the
Board of Directors to be inconsistent with the purposes of the provisions hereof
providing for Conversion Price or other adjustments (generally, to place the
holders of the Debenture and the Trust Securities in a position equivalent to
the position they were in prior to the event requiring an adjustment to the
Conversion Price or other provisions), the Board of Directors may make an
adjustment (in lieu of that required pursuant to such provisions) that it
determines in good faith to place the Holders of the Debentures in a position at
least equivalent to the position they were in prior to such event, which
determination shall be described in a Board Resolution.

      Section 7.10. Certain Additional Rights. In case the Company shall, by
dividend or otherwise, declare or make a distribution on the Common Stock
referred to in Section 7.3(c) or 7.3(d) (including, without limitation,
dividends or distributions referred to in the last sentence of Section 7.3(d))
the Holder of Debentures, upon the conversion thereof subsequent to the close of
business on the date fixed for the determination of stockholders entitled to
receive such

                                      -24-
<PAGE>
distribution and prior to the effectiveness of the Conversion Price adjustment
in respect of such distribution, shall also be entitled to receive for each
share of Common Stock into which Debentures are converted, the portion of the
shares of Common Stock, rights, warrants, evidences of indebtedness, shares of
capital stock, cash and assets so distributed applicable to one share of Common
Stock; provided, however, that, at the election of the Company (whose election
shall be evidenced by a resolution of the Board of Directors) with respect to
all Holders so converting, the Company may, in lieu of distributing to such
Holder any portion of such distribution not consisting of cash or securities of
the Company, pay such Holder an amount in cash equal to the fair market value
thereof (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors). If any conversion of Debentures described in the immediately
preceding sentence occurs prior to the payment date for a distribution to
holders of Common Stock which the Holder of Debentures so converted is entitled
to receive in accordance with the immediately preceding sentence, the Company
may elect (such election to be evidenced by a resolution of the Board of
Directors) to distribute to such Holder a due bill for the shares of Common
Stock, rights, warrants, evidences of indebtedness, shares of capital stock,
cash or assets to which such Holder is so entitled, provided, that such due bill
(a) meets any applicable requirements of the principal securities exchange or
other market on which the Common Stock is then traded and (b) requires payment
or delivery of such shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets no later than the date of
payment or delivery thereof to holders of shares of Common Stock receiving such
distribution.

      Section 7.11. Trustee Not Responsible for Determining Conversion Price or
Adjustments. Neither the Trustee nor any Conversion Agent shall at any time be
under any duty or responsibility to any Holder of any Debenture to determine
whether any facts exist which may require any adjustment of the Conversion
Price, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or whether this supplemental indenture
need be entered into. Neither the Trustee nor any Conversion Agent shall be
accountable with respect to the validity or value (or the kind of account) of
any shares of Common Stock or of any securities or property, which may at any
time be issued or delivered upon the conversion of any Debenture; and neither
the Trustee nor any Conversion Agent makes any representation with respect
thereto. Neither the Trustee nor any Conversion Agent shall be responsible for
any failure of the Company to make any cash payment or to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property upon the surrender of any Debenture for the purpose of conversion.]

                                  ARTICLE VIII
                                Events of Default

      Section 8.1. Events of Default. (a) In addition to those events set forth
in Section 6.01 of the Base Indenture, "Event of Default" with respect to the
Debentures, shall include the following events:

            (i)   in the event the Institutional Trustee is the Holder of the
      Debentures, the Trust shall have voluntarily or involuntarily dissolved,
      wound-up its business or otherwise terminated its existence except in
      connection with (i) the distribution of Debentures to holders of Trust
      Securities in liquidation of their interest in the Trust, (ii)

                                      -25-
<PAGE>
      the redemption of all of the outstanding Trust Securities, or (iii)
      certain mergers, consolidations or amalgamations, each as permitted by the
      Declaration[; and

            (ii)  the failure by the Company to deliver the Common Stock upon a
      valid conversion election by a Holder of Debentures to convert such
      Debentures into shares of Common Stock (whether or not such conversion is
      prohibited by the subordination provisions set forth in the Base
      Indenture)].

      (b)   Notwithstanding any other provision to the contrary, a valid
extension of the interest payment period of the Debentures pursuant to Section
4.1 shall not constitute a default in the payment of an installment of interest
under Section 6.01(a) of the Base Indenture.

                                   ARTICLE IX
                             Supplemental Indentures

      Section 9.1. Supplemental Indentures with Consent of Holders. In addition
to the provisions of Section 10.02 of the Base Indenture, the following shall
apply: no supplemental indenture shall make any change in the subordination
provisions of the Indenture that adversely affects the rights of any Holders of
any Securities of any series in any material respect, without the consent of the
Holder of each Debenture so affected.

                                   ARTICLE X
                                Form of Debenture

      Section 10.1. Form of Debenture. The Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon shall be substantially in
the form set forth as Annex I to this Supplemental Indenture.

                                   ARTICLE XI
                          Original Issue of Debentures

      Section 11.1. Original Issue of Debentures. Debentures in the aggregate
principal amount of up to $__________ may, upon or following execution of this
Supplemental Indenture, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and make
available for delivery said Debentures to or upon the written order of the
Company, signed by its Chairman, its Vice Chairman, its Chief Executive Officer,
its Chief Financial Officer, its President or any Vice President and its
Treasurer or an Assistant Treasurer, without any further action by the Company.

                                  ARTICLE XII
                                  Miscellaneous

      Section 12.1. Ratification of Base Indenture: Supplemental Indenture
Controls. The Base Indenture, as supplemented by this Supplemental Indenture, is
in all respects ratified and confirmed, and this Supplemental Indenture shall be
deemed part of the Base Indenture in the manner and to the extent herein and
therein provided. The provisions of this Supplemental

                                      -26-
<PAGE>
Indenture shall supersede the provisions of the Base Indenture to the extent the
Base Indenture is inconsistent herewith.

      Section 12.2. Trustee Not Responsible for Recitals. The recitals herein
contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.

      Section 12.3. Governing Law. This Supplemental Indenture and each
Debenture shall be deemed to be a contract made under the internal laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of said State.

      Section 12.4. Separability. In case any one or more of the provisions
contained in this Supplemental Indenture or in the Debentures shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Supplemental Indenture or of the Debentures, but this Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.

      Section 12.5. Counterparts. This Supplemental Indenture may be executed in
any number of counterparts each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.

      Section 12.6. List of Holders of Securities. (a) The Company shall provide
the Trustee (i), except while the Trust Preferred Securities remain in book
entry form, at least one Business Day prior to an Interest Payment Date, a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Holders of Debentures ("List of Holders") as of such record date,
provided that the Company shall not be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most recent List of
Holders given to the Institutional Trustee by the Company and (ii) at any other
time, within 30 days of receipt by the Company of a written request for a list
of Holders as of a date no more than 14 days before such List of Holders is
given to the Trustee. The Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders given to
it or which it receives in the capacity as Paying Agent (if acting in such
capacity) provided that the Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.

      (b)   The Trustee shall comply with its obligations under Sections 311(b),
311(b) and 312(b) of the Trust Indenture Act.

                                      -27-
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.

                                    UNOCAL CORPORATION

                                    By__________________________________
                                          Name:
                                          Title:

                                    THE BANK OF NEW YORK, as Trustee

                                    By__________________________________
                                          Name:
                                          Title:

                                      -28-
<PAGE>
                                     ANNEX I

                                FORM OF DEBENTURE

                           [FORM OF FACE OF DEBENTURE]

      [IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE FOLLOWING:

      This Debenture is a Global Debenture within the meaning of the Indenture
      hereinafter referred to and is registered in the name of a Depositary or a
      nominee of a Depositary. This Debenture is exchangeable for Debentures
      registered in the name of a Person other than the Depositary or its
      nominee only in the limited circumstances described in the Indenture, and]
      no transfer of this Debenture (other than a transfer of this Debenture as
      a whole by the Depositary to a nominee of the Depositary or by a nominee
      of the Depositary to the Depositary or another nominee of the Depositary)
      may be registered except in such limited circumstances.]

      [IF THE CLEARING AGENCY IS THE DEPOSITORY TRUST COMPANY, INSERT THE
FOLLOWING OR SUCH OTHER STATEMENT AS THE DEPOSITORY TRUST COMPANY SHALL SPECIFY:

      Unless this Debenture is presented by an authorized representative of The
      Depository Trust Company, a New York corporation (55 Water Street, New
      York, New York), to the issuer or its agent for registration of transfer,
      exchange or payment, and any Debenture issued is registered in the name of
      Cede & Co. or such other name as requested by an authorized representative
      of The Depository Trust Company (and any payment is made to Cede & Co. or
      to such other entity as is requested by an authorized representative of
      The Depository Trust Company), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
      FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
      hereof, Cede & Co., has an interest herein.]

No. _____________                           CUSIP No. _____________

                               UNOCAL CORPORATION|

                ____% JUNIOR [CONVERTIBLE] SUBORDINATED DEBENTURE

      Unocal Corporation, a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to _________________________________,
or registered assigns, the principal sum of ______________ Dollars ($_________)
on __________ 1, 20__, and to pay interest on said principal sum from
___________ __, _____, or from the most recent date on which interest has been
paid in full, quarterly (subject to deferral as set forth herein) in arrears on
March 1, June 1, September 1, and December 1 of each year (each, an "Interest
Payment Date") commencing __________ 1, ____, at the rate of ____% per annum
until the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and overdue
<PAGE>
installment of interest at the same rate per annum compounded quarterly (without
duplication and to the extent that payment of such interest is enforceable under
applicable law). The amount of interest payable on any Interest Payment Date
shall be computed on the basis of a 360-day year of twelve 30-day months. Except
as provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed will
be computed on the basis of 30-day months and, for periods of less than a month,
the actual number of days elapsed per 30-day month. In the event that any date
on which interest is payable on this Debenture is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture (referred to on the
reverse hereof), be paid to the person in whose name this Debenture (or one or
more Predecessor Debentures) is registered on the Regular Record Date for such
interest installment. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holders on
such Regular Record Date and may be paid to the Person in whose name this
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered Holders
of the Debentures not less than 10 days prior to such special record date, or
may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. The principal of (and premium, if any) and the
interest on this Debenture shall be payable at the office or agency of the
Trustee maintained for that purpose in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such address
as shall appear in the Security Debenture. Notwithstanding the foregoing, so
long as the Holder of this Debenture is the Institutional Trustee, the payment
of the principal of (and premium, if any) and interest on this Debenture will be
made at such place and to such account as may be designated by the Institutional
Trustee.

      The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each Holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such Holder upon
said provisions.

                                      -2-
<PAGE>
      This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.

      The provisions of this Debenture are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.

      IN WITNESS WHEREOF, the Company has caused this instrument to be executed.

                                    UNOCAL CORPORATION

                                    By __________________________________
                                          Name:
                                          Title:

Attest:

By:_________________________
   Name:
   Title:

                                      -3-
<PAGE>
                     [FORM OF CERTIFICATE OF AUTHENTICATION]

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.

Dated:  ______________________________

THE BANK OF NEW YORK,
as Trustee                                or as Authentication Agent

By _____________________________          By _____________________________
     Authorized Signatory                      Authorized Signatory

                                      -4-
<PAGE>
                         [FORM OF REVERSE OF DEBENTURE]

      This Debenture is one of a duly authorized series of Securities of the
Company specified in the Indenture, all issued or to be issued in one or more
series under and pursuant to an Indenture (the "Base Indenture") dated as of
September 11, 1996, duly executed and delivered between the Company and The Bank
of New York, as Trustee (the "Trustee"), as supplemented by the Second
Supplemental Indenture dated as of ______________, ____, between the Company and
the Trustee (such Second Supplemental Indenture, as it supplements the Base
Indenture, the "Indenture"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the Holders of Debentures. By the terms of the Indenture, the
Securities are issuable thereunder in series that may vary as to amount, date of
maturity, rate of interest and in other respects as provided in the Indenture.
This series of Securities is limited in aggregate principal amount as specified
in said Supplemental Indenture and is herein sometimes referred to as the
"Debentures."

      Because of the occurrence and continuation of a Special Event, in certain
circumstances, this Debenture may be redeemed by the Company, in whole or in
part, at 100% of the principal amount to be redeemed (the "Special Event
Redemption Price") together with any accrued and unpaid interest, including
Compounded Interest and Additional Interest, thereon to but excluding the
redemption date. The Special Event Redemption Price plus such accrued and unpaid
interest, shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or at such earlier time as the Company determines. In addition, the
Company shall have the right to redeem this Debenture at the option of the
Company, upon not less than 30 nor more than 60 days notice, without premium or
penalty, in whole or in part at any time on or after ___________ 1, ______ at
the following prices (expressed as percentages of the principal amount of the
Debentures) (the "Optional Redemption Price") together with accrued and unpaid
interest, including Additional Interest and Compounded Interest to, but
excluding, the redemption date, if redeemed during the 12-month period beginning
on _________ 1 (other than the first period, which will begin on __________ 1,
_____) of the following years:

<TABLE>
<CAPTION>
                        Year          Redemption Price
                        ----          ----------------
<S>                                   <C>
                       -----              ------%

                       -----              ------%

                       -----              ------%

                       -----              ------%

                       -----              ------%
</TABLE>

and 100% if redeemed on or after __________1, ____.

                                      -5-
<PAGE>
      The Company may not redeem any Debentures unless all accrued and unpaid
interest has been paid on all outstanding Debentures for all quarterly interest
payment periods terminating on or prior to the last Interest Payment Date before
the date of redemption. If Debentures are redeemed on any March 1, June 1,
September 1, or December 1, accrued and unpaid interest shall be payable to
Holders on the relevant record date. The Company shall issue a press release
announcing any Optional Redemption.

      If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption, the Debentures will be redeemed pro rata. In the event
of redemption of this Debenture in part only, a new Debenture or Debentures of
this series for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof. In case an Event of Default, as
defined in the Indenture, shall have occurred and be continuing, the principal
of all of the Debentures may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture. The Indenture contains provisions
permitting the Company and the Trustee, with the consent of the Holders of not
less than a majority in aggregate principal amount of the Securities of each
series affected at the time outstanding, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Securities of such series; provided, however, that no such supplemental
indenture shall (a) extend the fixed maturity of any Securities of any series,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, or make any change that adversely affects the right to convert any
Securities of any series or make any change in the subordination provisions that
adversely affects the rights of any Holders of any Securities of any series in
any material respect, without the consent of the Holder of each Debenture so
affected, or (b) reduce the aforesaid percentage of Securities of such series,
the Holders of which are required to consent to any such supplemental indenture,
without the consent of the Holders of each Security of any series then
outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Securities of any series at the time outstanding affected thereby, on behalf of
all of the Holders of the Securities of such series, to waive any past default
in the performance of any of the covenants contained in the Indenture, or
established pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of or premium, if
any, or interest on any Securities of such series or a failure to convert any
Securities of such series in accordance with its terms upon an election by the
Holders thereof. Any such consent or waiver by the registered Holder of this
Debenture (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this
Debenture and of any Debenture issued in exchange therefor or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.

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

                                      -6-
<PAGE>
      As long as an Event of Default under Section 6.01(a) of the Base Indenture
shall not have occurred and be continuing, the Company shall have the right, at
any time and from time to time during the term of the Debentures, to defer
payments of interest by extending the interest payment period of the Debentures
for a period not exceeding 20 consecutive quarters (an "Extended Interest
Payment Period") during which Extended Interest Payment Period no interest shall
be due and payable on the Debentures; provided, that no Extended Interest
Payment Period may extend beyond the Maturity Date. To the extent permitted by
applicable law, interest, the payment of which has been deferred during an
Extended Interest Payment Period, shall bear interest thereon at the rate
specified for these Debentures, compounded quarterly for each quarter of the
Extended Interest Payment Period ("Compounded Interest"). Before the termination
of any such Extended Interest Payment Period, the Company may further extend
such Extended Interest Payment Period, provided, that such Extended Interest
Payment Period together with all such previous and further extensions thereof
shall not exceed 20 consecutive quarters, or extend beyond the Maturity Date. At
the end of the Extended Interest Payment Period, the Company shall pay all
interest then accrued and unpaid on the Debentures, including any Additional
Interest and Compounded Interest, that shall be payable to the Holders of
Debentures on the first record date after the termination of the Extended
Interest Payment Period. Upon the termination of any such Extended Interest
Payment Period and upon the payment of all accrued and unpaid interest
(including Compounded Interest to the extend permitted by applicable law), the
Company may commence a new Extended Interest Payment Period. The Company may pay
at any time all or any portion of the interest accrued during an Extended
Interest Payment Period, subject to the requirements set forth in the Indenture.

      As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered Holder hereof on the
Security Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee in the City and
State of New York accompanied by a written instrument or instruments of transfer
in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his or her attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.

      Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any paying agent and the Security Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Security Registrar
shall be affected by any notice to the contrary. No recourse shall be had for
the payment of the principal of or the interest on this Debenture, or for any
claim based hereon, or otherwise in respect hereof, or based on or in respect of
the Indenture, against any incorporator, stockholder, officer or director, past,
present or future, as such, of the Company or of any predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or

                                      -7-
<PAGE>
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.

      [Subject to and upon compliance with Article VII of the Supplemental
Indenture, the Holder of this Debenture has the right, exercisable at any time
beginning _______ __, _____ and prior to the close of business (New York time)
on ____________ 1, 20__ (or, in the event this Debenture is called for
redemption, prior to the close of business (New York time) on the Business Day
prior to the corresponding redemption date), to convert the principal amount
hereof (or any portion thereof that is an integral multiple of the Principal
Amount of One Debenture) into that number of fully paid and nonassessable shares
of Common Stock obtained by dividing the principal amount of the Debentures to
be converted by the Conversion Price in effect on the Conversion Date. For
example, the initial Conversion Price is $__.__ and thus each Debenture is
initially convertible into 1. __ shares of Common Stock (calculated by dividing
the Principal Amount of One Debenture as of the date of the Supplemental
Indenture by the initial Common Price). The Conversion Price is subject to
adjustment as described in the Indenture. All conversion price and conversion
provision calculations shall be made to the nearest cent or to the nearest
1/100th of a share, as the case may be. To convert all or a portion of this
Debenture, a Holder must (a) complete and sign an irrevocable notice of election
to convert substantially in the form attached hereto and deliver such Conversion
Notice to the Conversion Agent, (b) surrender the Debenture to the Conversion
Agent, (c) furnish appropriate endorsements or transfer documents if required by
the Conversion Agent and (d) pay any transfer or similar tax, if required.
Accrued but unpaid interest will not be paid in cash on Debentures that are
converted, nor will such accrued interest be converted into additional shares of
Common Stock upon conversion of the Debentures, but such accrued interest shall
be deemed to be paid in full and then returned by the Holder to the Company as
partial consideration for Common Stock received on conversion, and the Company
shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest on the Debentures being
converted, which shall be deemed to be paid in full. If any Debentures are
converted during the period from (but excluding) a record date to (and
including) the next succeeding interest payment date, then either (i) if such
Debentures have been called for redemption on a redemption date that occurs
during such period, or are to be redeemed in connection with a Special Event
which occurs during such period, the Company shall not be required to pay
interest on such Interest Payment Date in respect of such Debentures or (ii) if
otherwise converted during such period, such Debentures shall be accompanied by
funds equal to the interest payable on such succeeding Interest Payment Date on
the principal amount so converted.

      No fractional shares will be issued upon conversion but a cash payment
shall be made by the Company in lieu of such fractional interest. The
outstanding principal amount of any Debenture shall be reduced by the principal
amount thereof converted into shares of Common Stock.

      The Company's delivery upon conversion of the fixed number of shares of
Common Stock into which the Debentures are convertible (together with cash in
lieu of fractional shares) shall be deemed to satisfy the Company's obligation
to pay the principal amount at the Maturity Date of the portion of Debentures so
converted and any unpaid interest (including Compounded Interest) accrued on
such Debentures at the time of such conversion.]

                                      -8-
<PAGE>
      The Debentures of this series are issuable only in registered form without
Coupons in denominations of the Principal Amount of One Debenture and any
integral multiple thereof. [IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE,
SUBSTITUTE THE FOLLOWING FOR THE PREVIOUS SENTENCE: This Global Debenture is
exchangeable for Debentures in definitive form only under certain limited
circumstances set forth in the Indenture. Debentures of this series so issued
are issuable only in registered form without Coupons in denominations of the
Principal Amount of One Debenture and any integral multiple thereof.] As
provided in the Indenture and subject to certain limitations therein set forth,
Debentures of this series are exchangeable for a like aggregate principal amount
of Debentures of this series of a different authorized denomination, as
requested by the Holder surrendering the same.

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

      THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND
THE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.

                                      -9-
<PAGE>
                          [FORM OF ELECTION TO CONVERT]
                               ELECTION TO CONVERT

To:  Unocal Corporation

      The undersigned Holder of this Debenture hereby irrevocably exercises the
option to convert this Debenture, or the portion below designated, into Common
Stock of Unocal Corporation in accordance with the terms of the Indenture
referred to in this Debenture, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.

Date:  __________________________

in whole ____                             in part __
                              Portion of principal amount of the
                              Debenture to be converted (the
                              Principal Amount of One Debenture
                              or integral multiples thereof):

                              $

                              _______________________________________

                              _______________________________________

                              _______________________________________

                              Signature (for conversion only)

                                 Please Print or Typewrite Name and
                                 Address, Including Zip Code, and
                                 Social Security or Other Identifying Number

                              _______________________________________

                              _______________________________________

                              _______________________________________

                              Signature Guarantee:(*)

                              _______________________________________

                                      -10-
<PAGE>
(*)   Signature must be guaranteed by an "eligible guarantor institution" that
      is a bank, stockbroker, savings and loan association or credit union
      meeting the requirements of the Conversion Agent, which requirements
      include membership or participation in the Securities Transfer Agents
      Medallion Program ("STAMP") or such other "signature guarantee program" as
      may be determined by the Conversion Agent in addition to, or in
      substitution for, STAMP, all in accordance with the Securities and
      Exchange Act of 1934, as amended.

                                      -11-
<PAGE>
                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned assigns and transfers this Debenture
to:

      _____________________________________________________

      _____________________________________________________

      _____________________________________________________

      (Insert assignee's social security or tax identification number)

      _____________________________________________________

      _____________________________________________________

      _____________________________________________________

      (Insert address and zip code of assignee)

      and irrevocably appoints

      _____________________________________________________

      _____________________________________________________

      _____________________________________________________

      agent to transfer this Debenture on the books of the Trust. The agent may
      substitute another to act for him or her.

Date:  ________________________________________

Signature:  ____________________________________
(Sign exactly as your name appears on the other side of this Debenture)

Signature Guarantee:(*)  _________________________

________________
*     Signature must be guaranteed by an "eligible guarantor institution"
      that is a bank, stockbroker, savings and loan association or credit
      union meeting the requirements of the Registrar, which requirements
      include membership or participation in the Securities Transfer Agents
      Medallion Program ("STAMP") or such other "signature guarantee program"
      as may be determined by the Debenture Registrar in addition to, or in
      substitution for, STAMP, all in accordance with the Securities and
      Exchange Act of 1934, as amended.

                                      -12-<PAGE>
                                                                    EXHIBIT 4.12

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

                                     FORM OF

                        AMENDED AND RESTATED DECLARATION

                                    OF TRUST

                                       OF

                             UNOCAL CAPITAL TRUST II

                            DATED AS OF ____________

                              --------------------
<PAGE>
<TABLE>
<CAPTION>

                               TABLE OF CONTENTS

                                                                                          Page
                                                                                          ----
<S>                                                                                       <C>

                                   ARTICLE I
                         Interpretation and Definitions

Section 1.1.  Definitions .............................................................     1

                                   ARTICLE II
                              Trust Indenture Act

Section 2.1.  Trust Indenture Act:  Application .......................................     8
Section 2.2.  Lists of Holders of Securities ..........................................     8
Section 2.3.  Reports by the Institutional Trustee ....................................     9
Section 2.4.  Periodic Reports to Institutional Trustee ...............................     9
Section 2.5.  Evidence of Compliance with Conditions Precedent ........................     9
Section 2.6.  Events of Default:  Waiver ..............................................     9
Section 2.7.  Event of Default:  Notice ...............................................    11

                                  ARTICLE III
                                  Organization

Section 3.1.  Name ....................................................................    11
Section 3.2.  Office ..................................................................    11
Section 3.3.  Purposes and Functions ..................................................    11
Section 3.4.  Authority ...............................................................    12
Section 3.5.  Title to Property of the Trust ..........................................    12
Section 3.6.  Powers, Duties and Authority of the Regular Trustees ....................    12
Section 3.7.  Prohibition of Actions by the Trust and the Trustees ....................    15
Section 3.8.  Powers and Duties of the Institutional Trustee ..........................    15
Section 3.9.  Certain Duties and Responsibilities of the Institutional Trustee ........    17
Section 3.10. Certain Rights of Institutional Trustee .................................    19
Section 3.11. Delaware Trustee ........................................................    21
Section 3.12  Execution of Documents ..................................................    21
Section 3.13. Not Responsible for Recitals or Issuance of Securities ..................    21
Section 3.14  Duration of Trust .......................................................    21
Section 3.15. Mergers .................................................................    21

                                   ARTICLE IV
                                    Sponsor

Section 4.1.  Issuance of Securities to Sponsor .......................................    23
Section 4.2.  Responsibilities of the Sponsor .........................................    23
</TABLE>

                                       -i-
<PAGE>
<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
<S>                                                                                       <C>

                                          ARTICLE V
                                           Trustees

Section 5.1.  Number of Trustees ......................................................    24
Section 5.2.  Delaware Trustee ........................................................    24
Section 5.3.  Institutional Trustee Eligibility .......................................    24
Section 5.4.  Certain Qualifications of Regular Trustees and Delaware Trustee Generally    25
Section 5.5.  Regular Trustees ........................................................    25
Section 5.6.  Delaware Trustee ........................................................    25
Section 5.7.  Appointment, Removal and Resignation of Trustees ........................    25
Section 5.8.  Vacancies Among Trustees ................................................    27
Section 5.9.  Effect of Vacancies .....................................................    27
Section 5.10. Meetings ................................................................    27
Section 5.11. Delegation of Power by Regular Trustees .................................    27
Section 5.12. Merger, Conversion, Consolidation or Succession to Business .............    28

                                          ARTICLE VI
                                        Distributions

Section 6.1.  Distributions ...........................................................    28

                                         ARTICLE VII
                                    Issuance of Securities

Section 7.1.  General Provisions Regarding Securities .................................    28
Section 7.2.  Execution and Authentication ............................................    29
Section 7.3.  Form and Dating .........................................................    29
Section 7.4.  Paying Agent ............................................................    30

                                         ARTICLE VIII
                                     Termination of Trust

Section 8.1.  Termination of Trust ....................................................    30

                                          ARTICLE IX
                                    Transfer of Interests

Section 9.1.  Transfer of Securities ..................................................    31
Section 9.2.  Transfer of Certificates ................................................    31
Section 9.3.  Deemed Security Holders .................................................    32
Section 9.4.  Book Entry Interests ....................................................    32
Section 9.5.  Notices to Clearing Agency ..............................................    32
Section 9.6.  Appointment of Successor Clearing Agency ................................    33
Section 9.7.  Definitive Preferred Security Certificates ..............................    33
Section 9.8.  Mutilated, Destroyed, Lost or Stolen Certificates .......................    33
</TABLE>

                                      -ii-
<PAGE>
<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
<S>                                                                                       <C>

                                          ARTICLE X
                            Limitation of Liability of Holders of
                                Securities, Trustees or Others

Section 10.1. Liability ...............................................................    34
Section 10.2. Exculpation .............................................................    34
Section 10.3. Fiduciary Duty ..........................................................    35
Section 10.4. Indemnification .........................................................    36
Section 10.5. Outside Business ........................................................    38

                                          ARTICLE XI
                                          Accounting

Section 11.1. Fiscal year .............................................................    38
Section 11.2. Certain Accounting Matters ..............................................    38
Section 11.3. Banking .................................................................    39
Section 11.4. Withholding .............................................................    39

                                         ARTICLE XII
                                   Amendments and Meetings

Section 12.1. Amendments ..............................................................    40
Section 12.2. Meetings of the Holders of Securities: Action by Written Consent ........    41

                                         ARTICLE XIII
                               Representations of Institutional
                                 Trustee and Delaware Trustee

Section 13.1. Representations and Warranties of Institutional Trustee .................    43
Section 13.2. Representations and Warranties of Delaware Trustee ......................    43

                                         ARTICLE XIV
                                        Miscellaneous

Section 14.1. Notices .................................................................    44
Section 14.2. Governing Law ...........................................................    45
Section 14.3. Intention of the Parties ................................................    45
Section 14.4. Headings ................................................................    45
Section 14.5. Successors and Assigns ..................................................    45
Section 14.6. Partial Enforceability ..................................................    46
Section 14.7. Counterparts ............................................................    46

ANNEX I       Terms of __% Trust [Convertible] Preferred Securities __% Trust
              Common Securities .......................................................    I-1
EXHIBIT A-1   Form of Preferred Security Certificate ..................................   A1-1
EXHIBIT A-2   Form of Trust Common Certificate ........................................   A2-1
EXHIBIT B     Specimen of Junior Subordinated Debenture ...............................      B
</TABLE>

                                     -iii-
<PAGE>
                              AMENDED AND RESTATED
                              DECLARATION OF TRUST
                                       OF
                             UNOCAL CAPITAL TRUST II

      THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") by and
among the Trustees (as defined herein), the Sponsor (as defined herein) and the
holders, from time to time, of undivided beneficial interests in the Trust to be
issued pursuant to this Declaration is dated and effective as of _____________.

                                    RECITALS

      WHEREAS, the Trustees and the Sponsor established Unocal Capital Trust II
(the "Trust"), a trust under the Delaware Statutory Trust Act pursuant to a
Declaration of Trust dated as of June 30, 1998, (the "Original Declaration") and
a Certificate of Trust filed with the Secretary of State of the State of
Delaware on June 30, 1998, for the sole purposes of issuing and selling certain
securities representing undivided beneficial interests in the assets of the
Trust, investing the proceeds from such sales in the Debentures issued by the
Debenture Issuer (as those terms are hereinafter defined) and engaging in only
those activities necessary or incidental thereto;

      WHEREAS, as of the date hereof, no interests in the Trust have been
issued;

      WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and

      NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a statutory trust under the Delaware Statutory Trust Act and that
this Declaration constitute the governing instrument of such statutory trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.

                                    ARTICLE I
                         INTERPRETATION AND DEFINITIONS

      Section 1.1. Definitions. Unless the context otherwise requires:

      (a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;

      (b) a term defined anywhere in this Declaration has the same meaning
throughout;

      (c) all references to "the Declaration" or "this Declaration" are to this
Declaration, including the Annexes and Exhibits hereto, as modified,
supplemented or amended from time to time;
<PAGE>
      (d) all references in this Declaration to Articles, Sections, Recitals,
Annexes, and Exhibits are to Articles, Sections and the Recitals of, and Annexes
and Exhibits to, this Declaration unless otherwise specified;

      (e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and

      (f) a reference to the singular includes the plural and vice versa.

      "Administrative Action" has the meaning specified in Section 4(c) of Annex
I.

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

      ["Agent" means any Paying Agent or Conversion Agent.]

      "Authorized Officer" of a Person means any Person that is authorized to
bind such Person.

      "Base Indenture" means that Indenture dated as of September 11, 1996
between Unocal as issuer and The Bank of New York, as trustee.

      "Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.

      "Business Day" means any day other than a Saturday, Sunday, or any other
day on which banking institutions in New York, New York or Los Angeles,
California are permitted or required by any applicable law to close.

      "Certificate" means a Common Security Certificate or a Preferred Security
Certificate.

      "Change in 1940 Act Opinion" has the meaning specified in Section 4(c) of
Annex I.

      "Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities. The
initial Clearing Agency shall be the Depository Trust Company.

      "Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.

      "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.

                                      -2-
<PAGE>
      "Commission" means the United States Securities and Exchange Commission.

      "Common Securities" has the meaning specified in Section 7.1(a).

      "Common Securities Guarantee" means the guarantee agreement, to be dated
as of _________________, of the Sponsor in respect of the Common Securities.

      "Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.

      "Common Stock" means shares of the common stock, $1.00 par value, of
Unocal.

      "Contract Preferred Securities" means Preferred Securities sold pursuant
to a Delayed Delivery Contract.

      ["Conversion Agent" has the meaning set forth in Section 7.4.

      "Conversion Date" has the meaning set forth in Section 5(b) of Annex I.

      "Conversion Request" has the meaning set forth in Section 5(b) of Annex
I.]

      "Corporate Trust Office" means the office of the Institutional Trustee at
which the corporate trust business of the Institutional Trustee shall be, at any
particular time, principally administered, which office at the date of execution
of this Agreement is located at 101 Barclay Street, Floor 21 West, New York, New
York 10286.

      "Coupon Rate" has the meaning set forth in Section 2(a) of Annex I.

      "Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.

      "Debenture Issuer" means Unocal (or its successor) in its capacity as
issuer of the Debentures under the Indenture.

      "Debenture Trustee" means The Bank of New York, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.

      "Debentures" means the series of ___% Junior [Convertible] Subordinated
Debentures issued or to be issued by the Debenture Issuer under the Indenture
and held by the Institutional Trustee, a specimen certificate for such series of
Debentures being Annex I to the Supplemental Indenture.

      "Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.7(c).

      "Delaware Trustee" has the meaning set forth in Section 5.2(a).

      "Delayed Delivery Contract" means a contract, substantially in the form
attached as Annex III to the Standard Underwriting Provisions incorporated by
reference in the Underwriting

                                      -3-
<PAGE>
Agreement, for the purchase of Preferred Securities on the delivery date or
dates and the amounts set forth therein, such Preferred Securities being
referred to herein as "Contract Preferred Securities."

      "Direct Action" has the meaning set forth in Section 3.8(e).

      "Dissolution Tax Opinion" has the meaning set forth in Section 4(c) of
Annex I.

      "Distribution" has the meaning set forth in Section 6.1.

      "Event of Default" in respect of the Securities means an Indenture Event
of Default has occurred and is continuing.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.

      "Extension Period" has the meaning set forth in Section 2(b) of Annex I.

      "Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).

      "Fiscal Year" has the meaning set forth in Section 11.1.

      "Global Certificate" has the meaning set forth in Section 9.4(a).

      "Guarantees" means the Preferred Securities Guarantee and the Common
Securities Guarantee.

      "Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Statutory Trust Act.

      "Indemnified Person" means a Sponsor Indemnified Person or a Fiduciary
Indemnified Person.

      "Indenture" means the Base Indenture and the Supplemental Indenture
pursuant to which the Debentures are or are to be issued.

      "Indenture Event of Default" means an "Event of Default" as defined in the
Indenture.

      "Institutional Trustee" has the meaning set forth in Section 5.3(a).

      "Institutional Trustee Account" has the meaning set forth in Section
3.8(c).

      "Investment Company" means an investment company as defined in the
Investment Company Act.

      "Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.

      "Investment Company Event" has the meaning set forth in Section 4(c) of
Annex I.

                                      -4-
<PAGE>
      "Legal Action" has the meaning set forth in Section 3.6(g).

      "Liquidation Distribution" has the meaning set forth in Section 3 of Annex
I.

      "List of Holders" has the meaning set forth in Section 2.2(a).

      "Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class who are
the record owners of more than 50% of the aggregate liquidation amount of all
outstanding Securities or, if the context so requires, Holders of outstanding
Preferred Securities or Holders of outstanding Common Securities voting
separately as a class who are the record owners of more than 50% of the
aggregate liquidation amount of all outstanding securities of the relevant
class.

      "Ministerial Action" has the meaning set forth in Section 4(c) of Annex I.

      "90-Day Period" has the meaning set forth in Section 4(c) of Annex I.

      "No Recognition Opinion" has the meaning set forth in Section 4(c) of
Annex I.

      "Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person or, if such Person is an
individual, signed by such Person. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:

      (a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;

      (b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;

      (c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

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

      "OID" has the meaning set forth in Section 4(c) of Annex I.

      "Original Declaration" has the meaning set forth in the Recitals.

      "Paying Agent" has the meaning set forth in Section 7.4.

      "Payment Amount" has the meaning set forth in Section 6.1.

      "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, statutory or

                                      -5-
<PAGE>
business trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.

      "Preferred Securities" has the meaning specified in Section 7.1(a).

      "Preferred Securities Guarantee" means the guarantee agreement, to be
dated as of _________________, of the Sponsor in respect of the Preferred
Securities.

      "Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).

      "Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.

      "Pro Rata" has the meaning set forth in Section 9 of Annex I.

      "Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.

      "Redemption/Distribution Notice" has the meaning set forth in Section 4(f)
of Annex I.

      "Redemption Tax Opinion" has the meaning set forth in Section 4(c) of
Annex I.

      "Regular Trustee" has the meaning set forth in Section 5.1(b).

      "Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.

      "Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.

      "Securities" means the Common Securities and the Preferred Securities.

      "Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.

      "Special Event" has the meaning set forth in Section 4(c) of Annex I.

                                      -6-
<PAGE>
      "Sponsor" means Unocal (or its successor), in its capacity as sponsor of
the Trust, and any transferee of the Common Securities permitted by Article IX.

      "Sponsor Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.

      "Standard Underwriting Provisions" means Unocal's Trust Preferred
Securities Standard Underwriting Provisions, June 1998.

      "Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 DEL. CODE Section 3801 et seq., as it may be amended from time to time, or
any successor legislation.

      "Successor Delaware Trustee" has the meaning set forth in Section
5.7(b)(ii).

      "Successor Entity" has the meaning set forth in Section 3.15(b)(i).

      "Successor Institutional Trustee" has the meaning set forth in Section
5.7(b)(i).

      "Successor Securities" has the meaning set forth in Section 3.15(b)(i)(B).

      "Super Majority" has the meaning set forth in Section 2.6(a)(ii).

      "Supplemental Indenture" means that Second Supplemental Indenture dated as
of ________________ between Debenture Issuer and The Bank of New York, as
Trustee.

      "Tax Event" has the meaning set forth in Section 4(c) of Annex I.

      "10% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.

      "Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

      "Trust" has the meaning set forth in the Recitals.

      "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.

                                      -7-
<PAGE>
      "Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and each other Person who may from time to time be duly
appointed, qualified and serving as a Trustee in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.

      "Underwriting Agreement" means the Underwriting Agreement by and among
Unocal, the Trust and the underwriters named in Schedule I thereto, attached as
Annex I to the Standard Underwriting Provisions.

      "Unocal" means Unocal Corporation, a Delaware corporation, or any
successor entity in a merger, consolidation, amalgamation or other transaction.

                                   ARTICLE II
                               TRUST INDENTURE ACT

      Section 2.1. Trust Indenture Act: Application. (a) This Declaration is
subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration and shall, to the extent applicable, be governed by
such provisions.

      (b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.

      (c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

      (d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.

      Section 2.2. Lists of Holders of Securities. (a) Each of the Sponsor and
the Regular Trustees on behalf of the Trust shall provide the Institutional
Trustee (i), except while the Preferred Securities remain in book-entry only
form, at least one Business Day prior to the date for payment of Distributions,
a list, in such form as the Institutional Trustee may reasonably require, of the
names and addresses of the Holders of the Securities ("List of Holders") as of
such record date, provided that neither the Sponsor nor the Regular Trustees on
behalf of the Trust shall be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent List of Holders
given to the Institutional Trustee by the Sponsor and the Regular Trustees on
behalf of the Trust, and (ii) at any other time, within 30 days of receipt by
the Trust of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Institutional Trustee.

      The Institutional Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders given to
it or which it receives in the capacity as Paying Agent (if acting in such
capacity) provided that the Institutional Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.

                                      -8-
<PAGE>
      (b) The Institutional Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.

      Section 2.3. Reports by the Institutional Trustee. Within 60 days after
May 15 of each year, the Institutional Trustee shall provide to the Holders of
the Preferred Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act.

      The Institutional Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.

      Section 2.4. Periodic Reports to Institutional Trustee. Each of the
Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Institutional Trustee such documents, reports and information as required by
Section 314 (if any) and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.

      Delivery of such reports, information and documents to the Institutional
Trustee is for informational purposes only and the Institutional Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Sponsor's compliance with any of its covenants hereunder (as to which the
Institutional Trustee is entitled to rely exclusively on Officers'
Certificates).

      Section 2.5. Evidence of Compliance with Conditions Precedent. Each of the
Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Institutional Trustee such evidence of compliance with any conditions precedent,
if any, provided for in this Declaration that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act.

      Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act may be given in the form of an
Officers' Certificate.

      Section 2.6. Events of Default: Waiver. (a) The Holders of a Majority in
liquidation amount of Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default in
respect of the Preferred Securities and its consequences, provided that, if the
underlying Indenture Event of Default:

            (i) is not waivable under the Indenture, such Event of Default under
      the Declaration shall also not be waivable; or

            (ii) requires the consent or vote of the holders of greater than a
      majority (a "Super Majority") in principal amount of the Debentures to be
      waived under the Indenture, such Event of Default under the Declaration
      may only be waived by the vote of the Holders of at least the same Super
      Majority percentage in liquidation amount of the Preferred Securities as
      is required under the Indenture of aggregate principal amount of the
      Debentures outstanding.

                                      -9-
<PAGE>
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.

      Upon such waiver, any such Indenture Event of Default shall cease to
exist, and any Event of Default with respect to the Preferred Securities arising
therefrom shall be deemed to have been cured, for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other
Indenture Event of Default or Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.

      (b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Indenture
Event of Default:

            (i) is not waivable under the Indenture, such Event of Default under
      the Declaration shall also not be waivable unless the Holders of the
      Common Securities are deemed to have waived such Event of Default under
      the Declaration as provided below in this Section 2.6(b);

            (ii) requires the consent or vote of a Super Majority in principal
      amount of the holders of the Debentures to be waived under the Indenture,
      except where such Event of Default under the Declaration may only be
      waived by the vote of the Holders of at least the same Super Majority
      percentage in liquidation amount of the Common Securities as is required
      under the Indenture of aggregate principal amount of the Debentures
      outstanding, unless the Holders of the Common Securities are deemed to
      have waived such Event of Default under the Declaration as provided below
      in this Section 2.6(b);

provided further, that each Holder of Common Securities will be deemed to have
waived any such Indenture Event of Default and all Events of Default with
respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated, and until such Events of Default with respect to the
Preferred Securities have been so cured, waived or otherwise eliminated, the
Institutional Trustee will be deemed to be acting solely on behalf of the
Holders of the Preferred Securities and only the Holders of the Preferred
Securities will have the right to direct the Institutional Trustee in accordance
with the terms of the Securities. The foregoing provisions of this Section
2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act and such Sections 316(a)(l)(A) and 316(a)(l)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such cure, waiver or other elimination,
any such Indenture Event of Default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured, waived or otherwise eliminated for every purpose of this
Declaration, but no such cure, waiver or other elimination

                                      -10-
<PAGE>
shall extend to any subsequent or other Indenture Event of Default or Event of
Default with respect to the Common Securities or impair any right consequent
thereon.

      (c) A waiver of an Indenture Event of Default by the Institutional Trustee
at the direction of the Holders of the Preferred Securities, constitutes a
waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.6(c) shall be in lieu of Section
316(a)(l)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.

      Section 2.7. Event of Default: Notice. (a) The Institutional Trustee
shall, within 90 days after the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders of the Securities, notices of
all defaults with respect to the Securities actually known to a Responsible
Officer of the Institutional Trustee, unless such defaults have been cured
before the giving of such notice (the term "defaults" for the purposes of this
Section 2.7(a) being hereby defined to be an Indenture Event of Default, not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided that, except for a default in
the payment of principal of (or premium, if any) or interest on any of the
Debentures, the Institutional Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Institutional Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders of the Securities.

      (b) The Institutional Trustee shall not be deemed to have knowledge of any
default except:

            (i) a default under Sections 6.01(a) or (b) of the Base Indenture;
      or

            (ii) any default as to which the Institutional Trustee shall have
      received written notice or of which a Responsible Officer of the
      Institutional Trustee charged with the administration of the Declaration
      shall have actual knowledge.

                                   ARTICLE III
                                  ORGANIZATION

      Section 3.1. Name. The Trust is named "Unocal Capital Trust II." Such name
may be modified from time to time by the Regular Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.

      Section 3.2. Office. The address of the principal office of the Trust is
c/o Unocal Corporation, 2141 Rosecrans Avenue, Suite 4000, El Segundo,
California 90245. On 10 Business Days' written notice to the Holders of
Securities, the Regular Trustees may designate another principal office.

      Section 3.3. Purposes and Functions. The sole purposes and functions of
the Trust are (a) to issue and sell Securities and use the gross proceeds from
such sale to acquire Debentures, and (b) except as otherwise limited herein, to
engage in only those other activities necessary or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived

                                      -11-
<PAGE>
from investments, pledge any of its assets, or otherwise undertake (or permit to
be undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust.

      Section 3.4. Authority. Subject to the limitations provided in this
Declaration and to the specific duties of the Institutional Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
and functions of the Trust. An action taken by the Regular Trustees in
accordance with their powers shall constitute the act of and serve to bind the
Trust and an action taken by the Institutional Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration.

      Section 3.5. Title to Property of the Trust. Except as provided in Section
3.8 with respect to the Debentures and the Institutional Trustee Account or as
otherwise provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust. The Holders shall not have legal title to any part
of the assets of the Trust, but shall have an undivided beneficial interest in
the assets of the Trust.

      Section 3.6. Powers, Duties and Authority of the Regular Trustees. The
Regular Trustees shall have the exclusive power, duty and authority to cause the
Trust to engage in the following activities:

      (a) to issue and sell the Preferred Securities and the Common Securities
in accordance with this Declaration; provided, however, that the Trust may issue
no more than one series of Preferred Securities (which series of Preferred
Securities shall include any Contract Preferred Securities to be issued
hereunder) and no more than one series of Common Securities, and, provided
further, that there shall be no interests in the Trust other than the
Securities;

      (b) in connection with the issuance of the Securities, at the direction of
the Sponsor, to:

            (i) execute and file with the Commission the registration statement
      on Form S-3 and any other registration statement and filing prepared by
      the Sponsor, including any amendments or supplements thereto, pertaining
      to the issuance of Preferred Securities and the Preferred Securities
      Guarantee;

            (ii) execute and file any documents prepared by the Sponsor, or take
      any acts as determined by the Sponsor to be necessary in order to qualify
      or register all or part of the Preferred Securities in any State in which
      the Sponsor has determined to qualify or register such Preferred
      Securities for sale;

            (iii) if desired by the Sponsor, execute and file an application,
      prepared by the Sponsor, to the New York Stock Exchange, the American
      Stock Exchange or any other national stock exchange or the Nasdaq National
      Market for listing or quotation upon notice of issuance of any Preferred
      Securities;

                                      -12-
<PAGE>
            (iv) if applicable, execute and file with the Commission a request
      for exemption from the reporting requirements of the Exchange Act;

      (c) to acquire the Debentures using the proceeds from the issuance of the
Securities; provided, however, that the Regular Trustees shall cause legal title
to the Debentures to be held of record in the name of the Institutional Trustee
for the benefit of the Holders of the Preferred Securities and the Holders of
Common Securities;

      (d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular Trustees
shall consult with the Sponsor and the Institutional Trustee before taking or
refraining from taking any Ministerial Action in relation to a Special Event;

      (e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities, Holders of Common Securities
and, to the extent applicable, to any stock exchange or other organization on
which the Preferred Securities are listed or quoted or to the Clearing Agency,
as to such actions and applicable record dates;

      (f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of the Securities;

      (g) to bring or defend, pay, collect, compromise, settle, terminate,
arbitrate, resort to legal action, or otherwise adjust claims or demands of or
against the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;

      (h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;

      (i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;

      (j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed by
any Regular Trustee;

      (k) to incur expenses that are necessary or incidental to carry out any of
the purposes or functions of the Trust;

      (l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities;

      (m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debenture Issuer of its election to defer payments of
interest on the Debentures as permitted under the Indenture;

                                      -13-
<PAGE>
      (n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory trust under the laws of the State of
Delaware and of each other jurisdiction in which such existence is necessary to
protect the limited liability of the Holders of the Securities or to enable the
Trust to effect the purposes for which the Trust was created;

      (o) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:

            (i) causing the Trust not to be deemed to be an Investment Company
      required to be registered under the Investment Company Act;

            (ii) causing the Trust not to be classified as other than a grantor
      trust for United States federal income tax purposes; and

            (iii) cooperating with the Debenture Issuer so that the Debentures
      will be treated as indebtedness of the Debenture Issuer for United States
      federal income tax purposes,

provided that such action does not adversely affect the interests of Holders in
any material respect;

      (p) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust;

      (q) to execute all documents, agreements or instruments and to take all
action necessary to cause the Clearing Agency to act as clearing agency for the
securities and to perform all duties required by such documents, agreements and
instruments; and

      (r) to execute all documents, agreements or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing.

      The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.

      Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.8.

      Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Sponsor. The Sponsor shall otherwise pay all costs
and expenses of the Trust as set forth in the Supplemental Indenture.

                                      -14-
<PAGE>
      Section 3.7. Prohibition of Actions by the Trust and the Trustees. (a) The
Trust shall not, and the Trustees (including the Institutional Trustee) shall
not, engage in any activity other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Trustees (including the
Institutional Trustee) shall cause the Trust not to:

            (i) invest any proceeds received by the Trust from holding the
      Debentures, but shall distribute all such proceeds to Holders of
      Securities pursuant to the terms of this Declaration and of the
      Securities;

            (ii) acquire any assets other than as expressly provided herein;

            (iii) possess Trust property for other than a Trust purpose;

            (iv) make any loans or incur any indebtedness other than loans
      represented by the Debentures;

            (v) possess any power or otherwise act in such a way as to vary the
      Trust assets or the terms of the Securities in any way whatsoever except
      as specifically provided herein;

            (vi) issue any securities or other evidences of beneficial ownership
      of, or beneficial interest in, the Trust other than the Securities; or

            (vii) other than as provided in this Declaration or Annex I, (A)
      direct the time, method and place of exercising any trust or power
      conferred upon the Debenture Trustee with respect to the Debentures, (B)
      waive any past default that is waivable under the Indenture, (C) exercise
      any right to rescind or annul any declaration that the principal of all
      the Debentures shall be due and payable, or (D) consent to any amendment,
      modification or termination of the Indenture or the Debentures where such
      consent shall be required unless the Trust shall have received an opinion
      of counsel to the effect that such modification will not cause more than
      an insubstantial risk that for United States federal income tax purposes
      the Trust will not be classified as a grantor trust.

      Section 3.8. Powers and Duties of the Institutional Trustee. (a) Unless
distributed to the Holders of the Securities in accordance with the terms
thereof, the legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Holders
of the Securities. The right, title and interest of the Institutional Trustee to
the Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.7. Such vesting
and succession of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.

      (b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).

                                      -15-
<PAGE>
      (c) The Institutional Trustee shall:

            (i) establish and maintain a segregated non-interest bearing trust
      account (the "Institutional Trustee Account") in the name of and under the
      exclusive control of the Institutional Trustee on behalf of the Holders of
      the Securities and, upon the receipt of payments of funds made in respect
      of the Debentures held by the Institutional Trustee, deposit such funds
      into the Institutional Trustee Account and make payments to the Holders of
      the Preferred Securities and Holders of the Common Securities from the
      Institutional Trustee Account in accordance with Section 6.1. Funds in the
      Institutional Trustee Account shall be held uninvested until disbursed in
      accordance with this Declaration. The Institutional Trustee Account shall
      be an account that is maintained with a banking institution the rating on
      whose long-term unsecured indebtedness is at least equal to the rating
      assigned to the Preferred Securities by a "nationally recognized
      statistical rating organization", as that term is defined for purposes of
      Rule 436(g)(2) under the Securities Act;

            (ii) engage in such ministerial activities as shall be necessary or
      appropriate to effect the redemption of the Preferred Securities and the
      Common Securities to the extent the Debentures are redeemed or mature; and

            (iii) upon written notice of distribution issued by the Regular
      Trustees in accordance with the terms of the Securities, engage in such
      ministerial activities as shall be necessary or appropriate to effect the
      distribution of the Debentures to Holders of Securities upon the
      occurrence of certain special events (as may be defined in the terms of
      the Securities) arising from a change in law or a change in legal
      interpretation or other specified circumstances pursuant to the terms of
      the Securities.

      (d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.

      (e) The Institutional Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default of which a Responsible Officer of
the Institutional Trustee has actual knowledge or the Institutional Trustee's
duties and obligations under this Declaration or the Trust Indenture Act;
provided, however, that if an Event of Default has occurred and is continuing
and such event is attributable to the failure of the Debenture Issuer to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the rights of the Holders of the Common Securities will be subrogated to
the rights of such Holder of Preferred Securities to the extent of any payment
made by the Debenture Issuer to such Holder of Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holder of the Debentures.

                                      -16-
<PAGE>
      (f) The Institutional Trustee shall not resign as a Trustee unless either:

            (i) the Trust has been completely liquidated and the proceeds of the
      liquidation distributed to the Holders of Securities pursuant to the terms
      of the Securities; or

            (ii) a Successor Institutional Trustee has been appointed and has
      accepted that appointment in accordance with Section 5.7.

      (g) The Institutional Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.

      (h) For such time as the Institutional Trustee is the Paying Agent, the
Institutional Trustee may authorize one or more Persons to act as additional
Paying Agents to pay Distributions on behalf of the Trust with respect to all
securities and any such Paying Agent shall comply with Section 317(b) of the
Trust Indenture Act. Any such additional Paying Agent may be removed by the
Institutional Trustee at any time so long as the Institutional Trustee remains
as Paying Agent, and a successor Paying Agent or additional Paying Agents may be
appointed at any time by the Institutional Trustee.

      (i) Subject to this Section 3.8, the Institutional Trustee shall have none
of the duties, liabilities, powers, or the authority of the Regular Trustees set
forth in Section 3.6.

      The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.

      Section 3.9. Certain Duties and Responsibilities of the Institutional
Trustee. (a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

      (b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own will misconduct, except that:

            (i) prior to the occurrence of an Event of Default and after the
      curing or waiving of all such Events of Default that may have occurred:

                                      -17-
<PAGE>
                  (A) the duties and obligations of the Institutional Trustee
            shall be determined solely by the express provisions of this
            Declaration and the Institutional Trustee shall not be liable except
            for the performance of such duties and obligations as are
            specifically set forth in this Declaration, and no implied covenants
            or obligations shall be read into this Declaration against the
            Institutional Trustee; and

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

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

            (iii) the Institutional Trustee shall not be liable with respect to
      any action taken or omitted to be taken by it in good faith in accordance
      with the direction of the Holders of not less than a Majority in
      liquidation amount of the Securities relating to the time, method and
      place of conducting any proceeding for any remedy available to the
      Institutional Trustee, or exercising any trust or power conferred upon the
      Institutional Trustee under this Declaration;

            (iv) no provision of this Declaration shall require the
      Institutional Trustee to expend or risk its own funds or otherwise incur
      personal financial liability in the performance of any of its duties or in
      the exercise of any of its rights or powers, if it shall have reasonable
      grounds for believing that the repayment of such funds or liability is not
      reasonably assured to it under the terms of this Declaration or indemnity
      reasonably satisfactory to the Institutional Trustee against such risk or
      liability is not reasonably assured to it;

            (v) the Institutional Trustee's sole duty with respect to the
      custody, safe keeping and physical preservation of the Debentures and the
      Institutional Trustee Account shall be to deal with such property in a
      similar manner as the Institutional Trustee deals with similar property
      for its own account, subject to the protections and limitations on
      liability afforded to the Institutional Trustee under this Declaration and
      the Trust Indenture Act;

            (vi) the Institutional Trustee shall have no duty or liability for
      or with respect to the value, genuineness, existence or sufficiency of the
      Debentures or the payment of any taxes or assessments levied thereon or in
      connection therewith;

                                      -18-
<PAGE>
            (vii) the Institutional Trustee shall not be liable for any interest
      on any money received by it except as it may otherwise agree in writing
      with the Sponsor. Money held by the Institutional Trustee need not be
      segregated from other funds held by it except in relation to the
      Institutional Trustee Account maintained by the Institutional Trustee
      pursuant to Section 3.8(c)(i) and except to the extent otherwise required
      by law; and

            (viii) the Institutional Trustee shall not be responsible for
      monitoring the compliance by the Regular Trustees or the Sponsor with
      their respective duties under this Declaration, nor shall the
      Institutional Trustee be liable for any default or misconduct of the
      Regular Trustees or the Sponsor.

      Section 3.10. Certain Rights of Institutional Trustee. (a) Subject to the
provisions of Section 3.9:

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

            (ii) any direction or act of the Sponsor or the Regular Trustees
      contemplated by this Declaration shall be sufficiently evidenced by an
      Officers' Certificate;

            (iii) whenever in the administration of this Declaration, the
      Institutional Trustee shall deem it desirable that a matter be proved or
      established before taking, suffering or omitting any action hereunder, the
      Institutional Trustee (unless other evidence is herein specifically
      prescribed) may, in the absence of bad faith on its part, request and
      conclusively rely upon an Officers' Certificate which, upon receipt of
      such request, shall be promptly delivered by the Sponsor or the Regular
      Trustees;

            (iv) the Institutional Trustee shall have no duty to see to any
      recording, filing or registration of any instrument (including any
      financing or continuation statement or any filing under tax or securities
      laws) or any rerecording, refiling or registration thereof;

            (v) the Institutional Trustee may consult with counsel of its
      selection or other experts and the advice or opinion of such counsel and
      experts with respect to legal matters or advice within the scope of such
      experts' area of expertise 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 accordance with such advice or opinion,
      such counsel may be counsel to the Sponsor or any of its Affiliates, and
      may include any of its employees. The Institutional Trustee shall have the
      right at any time to seek instructions concerning the administration of
      this Declaration from any court of competent jurisdiction;

            (vi) the Institutional Trustee shall be under no obligation to
      exercise any of the rights or powers vested in it by this Declaration at
      the request or direction of any Holder, unless such Holder shall have
      provided to the Institutional Trustee security and indemnity, reasonably
      satisfactory to the Institutional Trustee, against the costs, expenses

                                      -19-
<PAGE>
      (including attorneys' fees and expenses and the expenses of the
      Institutional Trustee's agents, nominees or custodians) and liabilities
      that might be incurred by it in complying with such request or direction,
      including such reasonable advances as may be requested by the
      Institutional Trustee provided, that, nothing contained in this Section
      3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
      occurrence of an Event of Default, of its obligation to exercise the
      rights and powers vested in it by this Declaration;

            (vii) the Institutional Trustee shall not be bound to make any
      investigation into the facts or matters stated in any resolution,
      certificate, statement, instrument, opinion, report, notice, request,
      direction, consent, order, bond, debenture, note, other evidence of
      indebtedness or other paper or document, but the Institutional Trustee, in
      its discretion, may make such further inquiry or investigation into such
      facts or matters as it may see fit;

            (viii) the Institutional Trustee may execute any of the trusts or
      powers hereunder or perform any duties hereunder either directly or by or
      through agents, custodians, nominees or attorneys and the Institutional
      Trustee shall not be responsible for any misconduct or negligence on the
      part of any agent or attorney appointed with due care by it hereunder;

            (ix) any action taken by the Institutional Trustee or its agents
      hereunder shall bind the Trust and the Holders of the Securities, and the
      signature of the Institutional Trustee or its agents alone shall be
      sufficient and effective to perform any such action and no third party
      shall be required to inquire as to the authority of the Institutional
      Trustee to so act or as to its compliance with any of the terms and
      provisions of this Declaration, both of which shall be conclusively
      evidenced by the Institutional Trustee's or its agent's taking such
      action;

            (x) whenever in the administration of this Declaration the
      Institutional Trustee shall deem it desirable to receive written
      instructions with respect to enforcing any remedy or right or taking any
      other action hereunder, the Institutional Trustee (i) may request written
      instructions from the Holders of the Securities which instructions may
      only be given by the Holders of the same proportion in liquidation amount
      of the Securities as would be entitled to direct the Institutional Trustee
      under the terms of the Securities in respect of such remedy, right or
      action, (ii) may refrain from enforcing such remedy or right or taking
      such other action until such instructions are received, and (iii) shall be
      protected in conclusively relying on or acting in or accordance with such
      instructions;

            (xi) except as otherwise expressly provided by this Declaration, the
      Institutional Trustee shall not be under any obligation to take any action
      that is discretionary under the provisions of this Declaration; and

            (xii) the Institutional Trustee shall not be liable for any action
      taken, suffered, or omitted to be taken by it in good faith and reasonably
      believed by it to be authorized or within the discretion or rights or
      powers conferred upon it by this Declaration.

                                      -20-
<PAGE>
      (b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.

      Section 3.11. Delaware Trustee. Notwithstanding any other provision of
this Declaration other than Section 5.2, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Regular Trustees or the Institutional Trustee
described in this Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Statutory Trust Act.

      Section 3.12. Execution of Documents. Except as otherwise required by the
Statutory Trust Act, any Regular Trustee is authorized to execute on behalf of
the Trust any documents that the Regular Trustees have the power and authority
to execute pursuant to Section 3.6; provided that, the registration statements
and filings referred to in Section 3.6(b)(i), including any amendments or
supplements thereto, if signed by any Regular Trustee, shall be signed by all of
the Regular Trustees.

      Section 3.13. Not Responsible for Recitals or Issuance of Securities. The
recitals contained in this Declaration and the Securities shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility for
their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or the
Securities.

      Section 3.14. Duration of Trust. The Trust, unless terminated pursuant to
the provisions of Article VIII hereof, shall have existence for forty (40) years
from the date of the Original Declaration.

      Section 3.15. Mergers. (a) The Trust may not consolidate, amalgamate,
merge with or into, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to, any corporation or other
body, except as described in Sections 3.15(b) and (c) or Section 9 of Annex I.

      (b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee, consolidate, amalgamate, merge with or into, convert into, convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to, or be replaced by, a trust organized as such under the laws of
any state; provided that:

            (i) such successor entity (the "Successor Entity") either:

                                      -21-
<PAGE>
                  (A) expressly assumes all of the obligations of the Trust
            under the Securities; or

                  (B) substitutes for the Securities other securities having
            substantially the same terms as the Preferred Securities (the
            "Successor Securities") so long as the Successor Securities rank the
            same as the Preferred Securities rank with respect to Distributions
            and payments upon liquidation, redemption and otherwise;

            (ii) the Debenture Issuer expressly acknowledges a trustee of the
      Successor Entity that possesses the same powers and duties as the
      Institutional Trustee as the Holder of the Debentures;

            (iii) the Debenture Issuer uses its reasonable efforts to cause any
      Successor Securities to be listed or quoted, or to cause any Successor
      Securities to be listed or quoted upon notification of issuance, on any
      national securities exchange or with another organization on which the
      Preferred Securities are then listed or quoted;

            (iv) such merger, consolidation, amalgamation, conversion,
      conveyance, transfer, lease or replacement does not cause the Preferred
      Securities (including any Successor Securities) to be downgraded (if so
      rated prior to such transaction) by any nationally recognized statistical
      rating organization;

            (v) such merger, consolidation, amalgamation or replacement does not
      adversely affect the rights, preferences and privileges of the Holders of
      the Securities (including any Successor Securities) in any material
      respect (other than with respect to any dilution of such Holders'
      interests in the new entity);

            (vi) such Successor Entity has a purpose substantially identical to
      that of the Trust;

            (vii) prior to such merger, consolidation, amalgamation, conversion,
      conveyance, transfer, lease or replacement, the Sponsor has received an
      opinion of independent counsel to the Trust experienced in such matters to
      the effect that:

                  (A) such merger, consolidation, amalgamation, conversion,
            conveyance, transfer, lease or replacement does not adversely affect
            the legal rights, preferences and privileges of the Holders of the
            Securities (including any Successor Securities) in any material
            respect (other thin with respect to any dilution of the Holders'
            interest in the new entity);

                  (B) following such merger, consolidation, amalgamation,
            conversion, conveyance, transfer, lease or replacement, neither the
            Trust nor the Successor Entity will be required to register as an
            Investment Company under the Investment Company Act; and

                  (C) following such merger, consolidation, amalgamation,
            conversion, conveyance, transfer, lease or replacement, the Trust
            (or the Successor Entity)

                                      -22-
<PAGE>
            will continue to be, or will be, classified as a grantor trust for
            United States federal income tax purposes; and

            (viii) the Sponsor or any successor thereto guarantees the
      obligations of such Successor Entity under the Successor Securities at
      least to the extent provided by the Preferred Securities Guarantee.

      (c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, convert into, convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to, or be
replaced by, any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, conversion, conveyance, transfer, lease or replacement
would cause the Trust or Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes.

                                   ARTICLE IV
                                     SPONSOR

      Section 4.1. Issuance of Securities to Sponsor. The aggregate stated
liquidation amount of Common Securities outstanding at any time shall be no less
than 1% of the capital of the Trust.

      Section 4.2. Responsibilities of the Sponsor. In connection with the
issuance and sale of the Preferred Securities, the Sponsor shall have the
exclusive right and responsibility to engage in the following activities:

      (a) to prepare for filing by the Trust with the Commission a registration
statement on Form S-3 and any other registration statement or filing, including
any amendments or supplements thereto, pertaining to the issuance of the
Preferred Securities and the Preferred Securities Guarantee, and to execute such
registration statements and amendments on behalf of the Trust in its capacity as
Sponsor or direct the Regular Trustee to do so;

      (b) to determine the States in which to take appropriate action to qualify
or register all or part of the Preferred Securities and the Preferred Securities
Guarantee and to do any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and prepare
for execution and filing any documents to be executed and filed by the Trust, as
the Sponsor deems necessary or advisable in order to comply with the applicable
laws of any such States;

      (c) if the Sponsor so desires, to prepare for filing by the Trust an
application to the New York Stock Exchange or any other national stock exchange
or the Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities; and

      (d) to negotiate the terms of, execute and enter into, on behalf of the
Trust, the Underwriting Agreement and cause the Trust to perform its obligations
thereunder; and

      (e) to negotiate the form of, execute and enter into, on behalf of the
Trust, Delayed Delivery Contracts and cause the Trust to perform its obligations
thereunder.

                                      -23-
<PAGE>
                                    ARTICLE V
                                    TRUSTEES

      Section 5.1. Number of Trustees. The number of Trustees initially shall be
five (5), and:

      (a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and

      (b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities or by written consent; provided, however, that the number
of Trustees shall in no event be less than two (2); provided further that (i) if
required by Section 5.2, one Trustee shall be the Delaware Trustee; (ii) there
shall be at least one Trustee who is an employee, officer or Affiliate of the
Sponsor (a "Regular Trustee"); and (iii) if required by Section 5.3, one Trustee
shall be the Institutional Trustee, and such Institutional Trustee may also
serve as Delaware Trustee if it meets the applicable requirements.

      Section 5.2. Delaware Trustee. (a) If required by the Statutory Trust Act,
one Trustee (the "Delaware Trustee") shall be:

            (i) a natural person who is a resident of the State of Delaware; or

            (ii) if not a natural person, an entity which has its principal
      place of business in the State of Delaware, and otherwise meets the
      requirements of applicable law.

      (b) If the Institutional Trustee meets the requirements of Section 5.2(a),
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.

      Section 5.3. Institutional Trustee Eligibility. (a) For so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, there shall at all times be one Trustee (the "Institutional Trustee") which
shall:

            (i) not be an Affiliate of the Sponsor; and

            (ii) be a corporation organized and doing business under the laws of
      the United States of America or any State or Territory thereof or of the
      District of Columbia, or a corporation or Person permitted by the
      Commission to act as an institutional trustee under the Trust Indenture
      Act, authorized under such laws to exercise corporate trust powers, having
      a combined capital and surplus of at least 50 million U.S. dollars
      ($50,000,000), and subject to supervision or examination by federal,
      state, territorial or District of Columbia authority. If such corporation
      publishes reports of condition at least annually, pursuant to law or to
      the requirements of the supervising or examining authority referred to
      above, then for the purposes of this Section 5.3(a)(ii), the combined
      capital and surplus of such corporation shall be deemed to be its combined
      capital and surplus as set forth in its most recent report of condition so
      published.

                                      -24-
<PAGE>
      (b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.7(c).

      (c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

      (d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.

      (e) The initial Institutional Trustee shall be: The Bank of New York

      Section 5.4. Certain Qualifications of Regular Trustees and Delaware
Trustee Generally. Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.

      Section 5.5. Regular Trustees. (a) The initial Regular Trustees shall be:

            Darrell D. Chessum
            Daniel A. Franchi
            Richard L. Walton

      (b) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.

      (c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Statutory Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, where applicable, the registration
statement referred to in Section 3.6, including any amendments thereto, shall be
signed by all of the Regular Trustees personally or by power of attorney.

      Section 5.6. Delaware Trustee. The initial Delaware Trustee shall be:

            The Bank of New York (Delaware).

      Section 5.7. Appointment, Removal and Resignation of Trustees. (a) Subject
to Section 5.7(b), Trustees may be appointed or removed without cause at any
time:

            (i) until the issuance of any Securities, by written instrument
      executed by the Sponsor; and

                                      -25-
<PAGE>
            (ii) after the issuance of any Securities, by vote of the Holders of
      a Majority in liquidation amount of the Common Securities voting as a
      class at a meeting of the Holders of the Common Securities.

      (b) (i) the Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Institutional
Trustee (a "Successor Institutional Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
Institutional Trustee and delivered to the Regular Trustees and the Sponsor; and

            (ii) the Trustee that acts as Delaware Trustee shall not be removed
      in accordance with this Section 5.7(a) until a successor Trustee
      possessing the qualifications to act as Delaware Trustee under Sections
      5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
      accepted such appointment by written instrument executed by such Successor
      Delaware Trustee and delivered to the Regular Trustees and the Sponsor.

      (c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:

            (i) No such resignation of the Trustee that acts as the
      Institutional Trustee shall be effective:

                  (A) until a Successor Institutional Trustee has been appointed
            and has accepted such appointment by instrument executed by such
            Successor Institutional Trustee and delivered to the Trust, the
            Sponsor and the resigning Institutional Trustee; or

                  (B) until the assets of the Trust have been completely
            liquidated and the proceeds thereof distributed to the Holders of
            the Securities; and

            (ii) no such resignation of the Trustee that acts as the Delaware
      Trustee shall be effective until a Successor Delaware Trustee has been
      appointed and has accepted such appointment by instrument executed by such
      Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
      resigning Delaware Trustee.

      (d) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Institutional Trustee
as the case may be if the Institutional Trustee or the Delaware Trustee delivers
an instrument of resignation in accordance with this Section 5.7.

      (e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.7 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Institutional Trustee or Successor Delaware Trustee. Such court

                                      -26-
<PAGE>
may thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Institutional Trustee or Successor Delaware
Trustee, as the case may be.

      (f) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.

      Section 5.8. Vacancies Among Trustees. If a Trustee ceases to hold office
for any reason and the number of Trustees is not reduced pursuant to Section
5.1, or if the number of Trustees is increased pursuant to Section 5.1, or if
the number of Trustees is increased pursuant to Section 5.1, a vacancy shall
occur. A resolution certifying the existence of such vacancy by the Regular
Trustees or, if there are more than two, a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy shall
be filled with a Trustee appointed in accordance with Section 5.7.

      Section 5.9. Effect of Vacancies. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to annul the Trust. Whenever a
vacancy in the number of Regular Trustees shall occur, until such vacancy is
filled by the appointment of a Regular Trustee in accordance with Section 5.7,
the Regular Trustees in office, regardless of their number, shall have all the
powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.

      Section 5.10. Meetings. If there is more than one Regular Trustee,
meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any
in-person meetings of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meetings of the Regular Trustee or any committee thereof shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, provided that a Quorum is present, or without
a meeting by, the unanimous written consent of the Regular Trustees. In the
event there is only one Regular Trustee, any and all action of such Regular
Trustee shall be evidenced by a written consent of such Regular Trustee.

      Section 5.11. Delegation of Power by Regular Trustees. (a) Any Regular
Trustee may, by power of attorney consistent with applicable law, delegate to
any other natural person over the age of 21 his or her power for the purpose of
executing any documents, including, but not limited

                                      -27-
<PAGE>
to those contemplated by Sections 3.6, 3.12 and 5.5(c), or executing or making
any other governmental or other filing.

      (b) The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.

      Section 5.12. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Institutional Trustee or the Delaware Trustee or any
Regular Trustee that is not a natural person, as the case may be, may be merged
or converted or with which either may be consolidated, or any Person resulting
from any merger, conversion or consolidation to which the Institutional Trustee
or the Delaware Trustee or such Regular Trustee, as the case may be, shall be a
party, or any Person succeeding to all or substantially all the corporate trust
business of the Institutional Trustee or the Delaware Trustee or such Regular
Trustee, as the case may be, shall be the successor of the Institutional Trustee
or the Delaware Trustee or such Regular Trustee, as the case may be, hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.

                                   ARTICLE VI
                                  DISTRIBUTIONS

      Section 6.1. Distributions. Holders shall receive Distributions (as
defined herein) in accordance with the applicable terms of the relevant Holder's
Securities. Distributions shall be made on the Preferred Securities and the
Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debenture Issuer makes a payment
of interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture), premium and/or principal on
the Debentures held by the Institutional Trustee (the amount of any such payment
being a "Payment Amount"), the Institutional Trustee shall and is directed, to
the extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders.

                                   ARTICLE VII
                             ISSUANCE OF SECURITIES

      Section 7.1. General Provisions Regarding Securities. (a) The Regular
Trustees shall on behalf of the Trust issue one class of preferred securities
(which preferred securities may be or include Contract Preferred Securities
issued and sold pursuant to Delayed Delivery Contracts) having such terms as are
set forth in Annex I (the "Preferred Securities") and one class of common
securities having such terms as are set forth in Annex I (the "Common
Securities"). The Securities represent undivided beneficial interests in the
assets of the Trust. The Trust shall issue no securities or other interests in
the assets of the Trust other than the Preferred Securities and the Common
Securities.

                                      -28-
<PAGE>
      (b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.

      (c) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.

      (d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.

      Section 7.2. Execution and Authentication. (a) The Certificates shall be
signed on behalf of the Trust by a Regular Trustee. In case any Regular Trustee
of the Trust who shall have signed any of the Securities shall cease to be such
Regular Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the Regular Trustees of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not such a Regular Trustee.

      (b) One Regular Trustee shall sign the Preferred Securities for the Trust
by manual or facsimile signature. Unless otherwise determined by the Trust, such
signature shall, in the case of Common Securities, be a manual signature. A
Preferred Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Institutional Trustee. The signature
shall be conclusive evidence that the Preferred Security has been authenticated
under this Declaration.

      Upon a written order of the Trust signed by one Regular Trustee, the
Institutional Trustee shall authenticate the Preferred Securities for original
issue.

      The Institutional Trustee may appoint an authenticating agent acceptable
to the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Institutional Trustee may do so.
Each reference in this Declaration to authentication by the Institutional
Trustee includes authentication by such agent. An authenticating agent has the
same rights as the Institutional Trustee to deal with the Company or an
Affiliate.

      Section 7.3. Form and Dating. The Preferred Securities and the
Institutional Trustee's certificate of authentication shall be substantially in
the form of Exhibit A-1 and the Common Securities shall be substantially in the
form of Exhibit A-2, each of which is hereby incorporated in and expressly made
a part of this Declaration. Certificates may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof. The Securities
may have letters, numbers, notations or other marks of identification or
designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the Trust).
The Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Institutional Trustee in writing. Each Preferred
Security Certificate shall be dated the

                                      -29-
<PAGE>
date of its authentication. The terms and provisions of the Securities set forth
in Annex I and the forms of Securities set forth in Exhibits A-1 and A-2 are
part of the terms of this Declaration and to the extent applicable, the
Institutional Trustee and the Sponsor, by their execution and delivery of this
Declaration, expressly agree to such terms and provisions and to be bound
thereby.

      Section 7.4. Paying Agent. In the event that the Preferred Securities are
not in book-entry only form, the Trust shall maintain in the Borough of
Manhattan, City of New York, State of New York, an office or agency where the
Preferred Securities may be presented for payment ("Paying Agent"), and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act;
provided that payment of distributions may be made at the option of the Regular
Trustees on behalf of the Trust by check mailed to the address of the Holder
entitled thereto or by wire transfer of immediately available funds to an
account designated by such Holder in the United States. [The Trust shall
maintain an office or agency where Securities may be presented for conversion
("Conversion Agent").] The Trust may appoint the Paying Agent [and the
Conversion Agent] and may appoint one or more additional paying agents [and one
or more additional conversion agents] in such other locations as it shall
determine. The term "Paying Agent" includes any additional paying agent [and the
term "Conversion Agent" includes any additional conversion agent]. The Trust may
change any Paying Agent [or Conversion Agent] without prior notice to any
Holder. The Trust shall notify the Institutional Trustee in writing of the name
and address of any [Paying] Agent not a party to this Declaration. If the Trust
fails to appoint or maintain another entity as Paying Agent [or Conversion
Agent], the Institutional Trustee shall act as such. The Trust or any of its
Affiliates may act as Paying Agent [or Conversion Agent]. The Trust shall act as
Paying Agent [and Conversion Agent] for the Common Securities. [The Trust
initially appoints the Institutional Trustee as Conversion Agent for the
Preferred Securities.]

                                  ARTICLE VIII
                              TERMINATION OF TRUST

      Section 8.1. Termination of Trust. (a) The Trust shall dissolve:

            (i) upon the bankruptcy of the Sponsor;

            (ii) upon the filing of a certificate of dissolution or its
      equivalent with respect to the Sponsor; or the revocation of the Sponsor's
      charter and the expiration of 90 days after the date of revocation without
      a reinstatement thereof;

            (iii) upon the entry of a decree of judicial dissolution of the
      Trust;

            (iv) when all of the Securities shall have been called for
      redemption and the amounts necessary for redemption thereof shall have
      been paid to the Holders in accordance with the terms of the Securities;

            (v) upon the occurrence and continuation of a Special Event in
      accordance with the terms of the Securities; or when all of the Debentures
      have been distributed to the Holders of the Securities in exchange for all
      of the Securities in accordance with the terms of the Securities;

                                      -30-
<PAGE>
            [(vi) upon the distribution of the Sponsor's common stock to all
      Securities Holders upon conversion of all outstanding Preferred
      Securities;]

            (vii) the expiration of the term of the Trust on _________, 20__; or

            (viii) before the issuance of any Securities, with the consent of
      all of the Regular Trustees and the Sponsor.

      (b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a), the Trustees (each of whom is hereby authorized to take such
action) shall file a certificate of cancellation with the Secretary of State of
the State of Delaware terminating the Trust.

      (c) The provisions of Sections 3.9 and 3.10 and Article X shall survive
the termination of the Trust.

                                   ARTICLE IX
                              TRANSFER OF INTERESTS

      Section 9.1. Transfer of Securities. (a) Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration and in the terms of the Securities. Any transfer
or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.

      (b) Subject to this Article IX, Preferred Securities shall be freely
transferable.

      (c) Subject to this Article IX, the Sponsor and any Related Party may only
transfer Common Securities to the Sponsor or a Related Party of the Sponsor;
provided that, any such transfer is subject to the condition precedent that the
transferor obtain the written opinion of independent counsel experienced in such
matters that such transfer would not cause more than an insubstantial risk that:

            (i) the Trust would be classified for United States federal income
      tax purposes as other than a grantor trust; and

            (ii) the Trust would be an Investment Company required to be
      registered under the Investment Company Act.

      Section 9.2. Transfer of Certificates. The Regular Trustees shall provide
for the registration of Certificates and of transfers of Certificates, which
will be effected without charge but only upon payment (with such indemnity as
the Regular Trustees may require) in respect of any tax or other government
charges that may be imposed in relation to it. The Trust will not be required to
register or cause to be registered the transfer of Preferred Securities after
they have been [converted,] exchanged, repaid or called for redemption. Upon
surrender for registration of transfer of any Certificate, the Regular Trustees
shall cause one or more new Certificates to be issued in the name of the
designated transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly

                                      -31-
<PAGE>
authorized in writing. Each Certificate surrendered for registration of transfer
shall be canceled by the Regular Trustees. A transferee of a Certificate shall
be entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.

      Section 9.3. Deemed Security Holders. The Trustees may treat the Person in
whose name any Certificate shall be registered on the books and records of the
Trust as the sole Holder of such Certificate and of the Securities represented
by such Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the Securities
represented by such Certificate on the part of any Person, whether or not the
Trust shall have actual or other notice thereof.

      Section 9.4. Book Entry Interests. (a) On original issuance to the
Sponsor, the Preferred Securities Certificates will be issued by or on behalf of
the Trust in the form of one or more, fully registered, global Preferred
Security Certificates (each a "Global Certificate"), either to the Sponsor or to
the initial Clearing Agency for the benefit of the Sponsor. The Preferred
Securities Certificates, upon the initial transfer from the Sponsor, will be in
the form of Global Certificates held by the Clearing Agency.

      (b) Except as provided in Sections 9.4(a) and 9.7:

            (i) Global Certificates delivered to the Clearing Agency shall be
      registered on the books and records of the Trust in the name of the
      Clearing Agency or its nominee, and no Preferred Security Beneficial Owner
      will receive a Definitive Preferred Security Certificate representing such
      Preferred Security Beneficial Owner's interests in such Global
      Certificates;

            (ii) the Trust and the Trustees shall be entitled to deal with the
      Clearing Agency for all purposes of this Declaration (including the
      payment of Distributions on the Global Certificates and receiving
      approvals, votes or consents hereunder) as the Holder of the Preferred
      Securities and the sole holder of the Global Certificates and shall have
      no obligation to the Preferred Security Beneficial Owners;

            (iii) to the extent that the provisions of this Section 9.4 conflict
      with any other provisions of this Declaration, the provisions of this
      Section 9.4 shall control; and

            (iv) the rights of the Preferred Security Beneficial Owners shall be
      exercised only through the Clearing Agency and shall be limited to those
      established by law and agreements between such Preferred Security
      Beneficial Owners and the Clearing Agency and/or the Clearing Agency
      Participants and receive and transmit payments of Distributions on the
      Global Certificates to such Clearing Agency Participants. The Clearing
      Agency will make book entry transfers among the Clearing Agency
      Participants.

      Section 9.5. Notices to Clearing Agency. Whenever a notice or other
communication to the Preferred Security Holders is required under this
Declaration, unless and until Definitive Preferred Security Certificates shall
have been issued to the Preferred Security Beneficial

                                      -32-
<PAGE>
Owners pursuant to Section 9.7, the Regular Trustees shall give all such notices
and communications specified herein to be given to the Preferred Security
Holders to the Clearing Agency, and shall have no notice obligations to the
Preferred Security Beneficial Owners.

      Section 9.6. Appointment of Successor Clearing Agency. If any Clearing
Agency elects to discontinue its services as securities depositary with respect
to the Preferred Securities, the Regular Trustees may, in their sole discretion,
appoint a successor Clearing Agency with respect to such Preferred Securities.

      Section 9.7. Definitive Preferred Security Certificates. If:

      (a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or

      (b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Preferred Securities, then:

      (c) definitive, fully registered Preferred Security Certificates (the
"Definitive Preferred Security Certificates") shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such Preferred Securities; and

      (d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Preferred Securities Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any delay in
delivery of such instructions and each of them may conclusively rely on and
shall be protected in relying on, said instructions of the Clearing Agency. The
Definitive Preferred Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which Preferred
Securities may be listed, or to conform to usage.

      Section 9.8. Mutilated, Destroyed, Lost or Stolen Certificates. If:

      (a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and

      (b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless,

then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like

                                      -33-
<PAGE>
denomination. In connection with the issuance of any new Certificate under this
Section 9.8, the Regular Trustees may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

                                    ARTICLE X
                      LIMITATION OF LIABILITY OF HOLDERS OF
                         SECURITIES, TRUSTEES OR OTHERS

      Section 10.1. Liability. (a) Except as expressly set forth in this
Declaration, the Guarantees and the terms of the Securities, the Sponsor shall
not be:

            (i) personally liable for the return of any portion of the capital
      contributions (or any return thereon) of the Holders of the Securities
      which shall be made solely from assets of the Trust; or

            (ii) be required to pay to the Trust or to any Holder of Securities
      any deficit upon dissolution of the Trust or otherwise.

      (b) Pursuant to Section 3803(a) of the Statutory Trust Act, the Holders of
the Common Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware, provided, however,
the Holders of the Common Securities shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets, and, upon dissolution of the
Trust, shall pay or make reasonable provision to pay all claims and obligations,
including all contingent, conditional or unmatured claims and obligations known
to the Trust and all claims and obligations which are known to the Trust but for
which the identity of the claimant is unknown (other than with respect to
amounts payable pursuant to the terms of the Securities) to the extent not
satisfied out of the Trust's assets.

      (c) Pursuant to Section 3803(a) of the Statutory Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.

      Section 10.2. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions.

                                      -34-
<PAGE>
      (b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.

      Section 10.3. Fiduciary Duty. (a) To the extent that, at law or in equity,
an Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity (other than the duties imposed on the Institutional Trustee
under the Trust Indenture Act), are agreed by the parties hereto to replace such
other duties and liabilities of such Indemnified Person.

      (b) Unless otherwise expressly provided herein:

            (i) whenever a conflict of interest exists or arises between any
      Covered Persons; or

            (ii) whenever this Declaration or any other agreement contemplated
      herein or therein provides that an Indemnified Person shall act in a
      manner that is, or provides terms that are, fair and reasonable to the
      Trust or any Holder of Securities, the Indemnified Person shall resolve
      such conflict of interest, take such action or provide such terms,
      considering in each case the relative interest of each party (including
      its own interest) to such conflict, agreement, transaction or situation
      and the benefits and burdens relating to such interests, any customary or
      accepted industry practices, and any applicable generally accepted
      accounting practices or principles. In the absence of bad faith by the
      Indemnified Person, the resolution, action or term so made, taken or
      provided by the Indemnified Person shall not constitute a breach of this
      Declaration or any other agreement contemplated herein or of any duty or
      obligation of the Indemnified Person at law or in equity or otherwise.

      (c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:

            (i) in its "discretion" or under a grant of similar authority, the
      Indemnified Person shall be entitled to consider such interests and
      factors as it desires, including its own interests, and shall have no duty
      or obligation to give any consideration to any interest of or factors
      affecting the Trust or any other Person; or

            (ii) in its "good faith" or under another express standard, the
      Indemnified Person shall act under such express standard and shall not be
      subject to any other or different standard imposed by this Declaration or
      by applicable law.

                                      -35-
<PAGE>
      Section 10.4. Indemnification.

      (a) (i) The Sponsor shall indemnify, to the full extent permitted by law,
any Sponsor Indemnified Person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Trust) by reason of the fact that he is or was a
Sponsor Indemnified Person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Sponsor Indemnified Person did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.

            (ii) The Sponsor shall indemnify, to the full extent permitted by
      law, any Sponsor Indemnified Person who was or is a party or is threatened
      to be made a party to any threatened, pending or completed action or suit
      by or in the right of the Trust to procure a judgment in its favor by
      reason of the fact that he is or was a Sponsor Indemnified Person against
      expenses (including attorneys' fees) actually and reasonably incurred by
      him in connection with the defense or settlement of such action or suit if
      he acted in good faith and in a manner he reasonably believed to be in or
      not opposed to the best interests of the Trust and except that no such
      indemnification shall be made in respect of any claim, issue or matter as
      to which such Sponsor Indemnified Person shall have been adjudged to be
      liable to the Trust unless and only to the extent that the Court of
      Chancery of Delaware or the court in which such action or suit was brought
      shall determine upon application that, despite the adjudication of
      liability but in view of all the circumstances of the case, such person is
      fairly and reasonably entitled to indemnity for such expenses which such
      Court of Chancery or such other court shall deem proper.

            (iii) To the extent that a Sponsor Indemnified Person shall be
      successful on the merits or otherwise (including dismissal of an action
      without prejudice or the settlement of an action without admission of
      liability) in defense of any action, suit or proceeding referred to in
      paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
      claim, issue or matter therein, he shall be indemnified, to the full
      extent permitted by law, against expenses (including attorneys' fees)
      actually and reasonably incurred by him in connection therewith.

            (iv) Any indemnification under paragraphs (i) and (ii) of this
      Section 10.4(a) (unless ordered by a court) shall be made by the Sponsor
      only as authorized in the specific case upon a determination that
      indemnification of the Sponsor Indemnified Person is proper in the
      circumstances because he has met the applicable standard of conduct set
      forth in paragraphs (i) and (ii). Such determination shall be made (1) by
      the Regular Trustees by a majority vote of a quorum consisting of such
      Regular Trustees who were not parties to such action, suit or proceeding,
      (2) if such a quorum is not obtainable,

                                      -36-
<PAGE>
      or, even if obtainable, if a quorum of disinterested Regular Trustees so
      directs, by independent legal counsel in a written opinion, or (3) by the
      Common Security Holder of the Trust.

            (v) Expenses (including attorneys' fees) incurred by a Sponsor
      Indemnified Person in defending a civil, criminal, administrative or
      investigative action, suit or proceeding referred to in paragraphs (i) and
      (ii) of this Section 10.4(a) shall be paid by the Sponsor in advance of
      the final disposition of such action, suit or proceeding upon receipt of
      an undertaking by or on behalf of such Sponsor Indemnified Person to repay
      such amount if it shall ultimately be determined that he is not entitled
      to be indemnified by the Sponsor as authorized in this Section 10.4(a).
      Notwithstanding the foregoing, no advance shall be made by the Sponsor if
      a determination is reasonably and promptly made (i) by the Regular
      Trustees by a majority vote of a quorum of disinterested Regular Trustees,
      (ii) if such a quorum is not obtainable, or, even if obtainable, if a
      quorum of disinterested Regular Trustees so directs, by independent legal
      counsel in a written opinion or (iii) the Common Security Holder of the
      Trust, that, based upon the facts known to the Regular Trustees, counsel
      or the Common Security Holder at the time such determination is made, such
      Sponsor Indemnified Person acted in bad faith or in a manner that such
      person did not believe to be in or not opposed to the best interests of
      the Trust, or, with respect to any criminal proceeding, that such Sponsor
      Indemnified Person believed or had reasonable cause to believe his conduct
      was unlawful. In no event shall any advance be made in instances where the
      Regular Trustees, independent legal counsel or Common Security Holder
      reasonably determine that such person deliberately breached his duty to
      the Trust or its Common or Preferred Security Holders.

            (vi) The indemnification and advancement of expenses provided by, or
      granted pursuant to, the other paragraphs of this Section 10.4(a) shall
      not be deemed exclusive of any other rights to which those seeking
      indemnification and advancement of expenses may be entitled under any
      agreement, vote of stockholders or disinterested directors of the Sponsor
      or Preferred Security Holders of the Trust or otherwise, both as to action
      in his official capacity and as to action in another capacity while
      holding such office. All rights to indemnification under this Section
      10.4(a) shall be deemed to be provided by a contract between the Sponsor
      and each Sponsor Indemnified Person who serves in such capacity at any
      time while this Section 10.4(a) is in effect. Any repeal or modification
      of this Section 10.4(a) shall not affect any rights or obligations then
      existing.

            (vii) The Sponsor or the Trust may purchase and maintain insurance
      on behalf of any person who is or was a Sponsor Indemnified Person against
      any liability asserted against him and incurred by him in any such
      capacity, or arising out of his status as such, whether or not the Sponsor
      would have the power to indemnify him against such liability under the
      provisions of this Section 10.4(a).

            (viii) For purposes of this Section 10.4(a), references to "the
      Trust" shall include, in addition to the resulting or surviving entity,
      any constituent entity (including any constituent of a constituent)
      absorbed in a consolidation or merger, so that any person who is or was a
      director, trustee, officer or employee of such constituent entity, or is
      or was serving at the request of such constituent entity as a director,
      trustee, officer,

                                      -37-
<PAGE>
      employee or agent of another entity, shall stand in the same position
      under the provisions of this Section 10.4(a) with respect to the resulting
      or surviving entity as he would have with respect to such constituent
      entity if its separate existence had continued.

            (ix) The indemnification and advancement of expenses provided by, or
      granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
      when authorized or ratified, continue as to a person who has ceased to be
      a Sponsor Indemnified Person and shall inure to the benefit of the heirs,
      executors and administrators of such a person.

      (b) The Sponsor agrees to indemnify the (i) Institutional Trustee, (ii)
the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.

      Section 10.5. Outside Business. Any Covered Person, the Sponsor, the
Delaware Trustee and the Institutional Trustee may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders of Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. No Covered
Person, the Sponsor, the Delaware Trustee, or the Institutional Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, shall have the right to
take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor of its Affiliates.

                                   ARTICLE XI
                                   ACCOUNTING

      Section 11.1. Fiscal Year. The fiscal year ("Fiscal Year") of the Trust
shall be the calendar year, or such other year as is required by the Code.

      Section 11.2. Certain Accounting Matters. (a) At all times during the
existence of the Trust, the Regular Trustees shall keep, or cause to be kept,
full books, records and supporting

                                      -38-
<PAGE>
documents, which shall reflect detail, each transaction of the Trust. The books
of account shall be maintained on the accrual method of accounting in compliance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for the United States federal income
tax purposes. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the Regular
Trustees.

      (b) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.

      (c) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.

      Section 11.3. Banking. The Trust shall maintain one or more bank accounts
in the name and for the sole benefit of the Trust; provided, however, that all
payments of funds in respect of the Debentures held by the Institutional Trustee
shall be made directly to the Institutional Trustee Account and no other funds
of the Trust shall be deposited in the Institutional Trustee Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that the Institutional Trustee shall designate the
signatories for the Institutional Trustee Account.

      Section 11.4. Withholding. The Trust and the Regular Trustees shall comply
with all withholding requirements under United States federal, state and local
law. The Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Regular Trustees
shall file required forms with applicable jurisdictions and, unless an exemption
from withholding is properly established by a Holder, shall remit amounts
withheld with respect to the Holder to applicable jurisdictions. To the extent
that the Trust is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a distribution in the amount of the withholding to the
Holder. In the event of any claimed over withholding, Holders shall be limited
to an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.

                                      -39-
<PAGE>
                                   ARTICLE XII
                             AMENDMENTS AND MEETINGS

      Section 12.1. Amendments. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
only be amended by a written instrument approved and executed by:

            (i) the Regular Trustees (or, if there are more than two Regular
      Trustees a majority of the Regular Trustees);

            (ii) if the amendment affects the rights, powers, duties,
      obligations or immunities of the Institutional Trustee, the Institutional
      Trustee; and

            (iii) if the amendment affects the rights, powers, duties,
      obligations or immunities of the Delaware Trustee, the Delaware Trustee.

      (b) No amendment shall be made, and any such purported amendment shall be
void and ineffective:

            (i) unless, in the case of any proposed amendment, the Institutional
      Trustee shall have first received an Officers' Certificate from each of
      the Trust and the Sponsor that such amendment is permitted by, and
      conforms to, the terms of this Declaration (including the terms of the
      Securities);

            (ii) unless, in the case of any proposed amendment which affects the
      rights, powers, duties, obligations or immunities of the Institutional
      Trustee, the Institutional Trustee shall have first received:

                  (A) an Officers' Certificate from each of the Trust and the
            Sponsor that such amendment is permitted by, and conforms to, the
            terms of this Declaration (including the terms of the Securities);
            and

                  (B) an opinion of counsel (who may be counsel to the Sponsor
            or the Trust) that such amendment is permitted by, and conforms to,
            the terms of this Declaration (including the terms of the
            Securities); and

            (iii) to the extent the result of such amendment would be to:

                  (A) cause the trust to be classified for purposes of United
            States federal income taxation as other than a grantor trust;

                  (B) reduce or otherwise adversely affect the powers of the
            Institutional Trustee in contravention of the Trust Indenture Act;
            or

                  (C) cause the Trust to be deemed to be an Investment Company
            required to be registered under the Investment Company Act.

                                      -40-
<PAGE>
      (c) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities.

      (d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities.

      (e) Article IV shall not be amended without the consent of the Holders of
a Majority in liquidation amount of the Common Securities.

      (f) The rights of the Holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in liquidation amount
of the Common Securities.

      (g) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:

            (i) cure any ambiguity;

            (ii) correct or supplement any provision in this declaration that
      may be defective or inconsistent with any other provision of this
      Declaration;

            (iii) add to the covenants, restrictions or obligations of the
      Sponsor;

            (iv) conform to any change in the Investment Company Act or the
      Trust Indenture Act or the rules and regulations promulgated thereunder or
      any written change in interpretation or application of any such act, rule
      or regulation by any legislative body, court, government agency or
      regulatory authority, which amendment does not adversely affect the
      rights, preferences or privileges of the Holders in any material respect;

            (v) evidence the appointment of a Trustee or Successor Trustee; and

            (vi) cause the Trust to continue to be classified as a grantor trust
      for United States federal income tax purposes.

      Section 12.2. Meetings of the Holders of Securities: Action by Written
Consent. (a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Preferred Securities
are listed or admitted for trading. The Regular Trustees shall call a meeting of
the Holders of such class if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a writing stating that
the signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in writing the Security
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities specified shall be

                                      -41-
<PAGE>
counted for purposes of determining whether the required percentage set forth in
the second sentence of this paragraph has been met.

      (b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:

            (i) notice of any such meeting shall be given to all the Holders of
      Securities having a right to vote thereat at least 7 days and not more
      than 60 days before the date of such meeting. Whenever a vote, consent or
      approval of the Holders of Securities is permitted or required under this
      Declaration or the rules of any stock exchange on which the Preferred
      Securities are listed or admitted for trading, such vote, consent or
      approval may be given at a meeting of the Holders of Securities. Any
      action that may be taken at a meeting of the Holders of Securities may be
      taken without a meeting if a consent in writing setting forth the action
      so taken is signed by the Holders of Securities owning not less than the
      minimum amount of Securities in liquidation amount that would be necessary
      to authorize or take such action at a meeting at which all Holders of
      Securities having a right to vote thereon were present and voting. Prompt
      notice of the taking of action without a meeting shall be given to the
      Holders of Securities entitled to vote who have not consented in writing.
      The Regular Trustees may specify that any written ballot submitted to the
      Security Holder for the purpose of taking any action without a meeting
      shall be returned to the Trust within the time specified by the Regular
      Trustees;

            (ii) each Holder of a Security may authorize any Person to act for
      it by proxy on all matters in which a Holder of Securities is entitled to
      participate, including waiving notice of any meeting, or voting or
      participating at a meeting. No proxy shall be valid after the expiration
      of 11 months from the date thereof unless otherwise provided in the proxy.
      Every proxy shall be revocable at the pleasure of the Holder of Securities
      executing it. Except as otherwise provided herein, all matters relating to
      the giving, voting or validity of proxies shall be governed by the General
      Corporation Law of the State of Delaware relating to proxies, and judicial
      interpretations thereunder, as if the Trust were a Delaware corporation
      and the Holders of the Securities were stockholders of a Delaware
      corporation;

            (iii) each meeting of the Holders of the Securities shall be
      conducted by the Regular Trustees or by such other Person that the Regular
      Trustees may designate; and

            (iv) unless this Declaration, the terms of the Securities, the Trust
      Indenture Act or the listing rules of any stock exchange on which the
      Preferred Securities are then listed or trading, otherwise provides, the
      Regular Trustees, in their sole discretion, shall establish all other
      provisions relating to meetings of Holders of Securities, including notice
      of the time, place or purpose of any meeting at which any matter is to be
      voted on by any Holders of Securities, waiver of any such notice, action
      by consent without a meeting, the establishment of a record date, quorum
      requirements, voting in person or by proxy or any other matter with
      respect to the exercise of any such right to vote.

                                      -42-
<PAGE>
                                  ARTICLE XIII
                        REPRESENTATIONS OF INSTITUTIONAL
                          TRUSTEE AND DELAWARE TRUSTEE

      Section 13.1. Representations and Warranties of Institutional Trustee. The
Trustee that acts as initial Institutional Trustee represents and warrants to
the Trust and to the Sponsor at the date of this Declaration, and each Successor
Institutional Trustee represents and warrants, as applicable, to the Trust and
the Sponsor at the time of the Successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee that:

      (a) the Institutional Trustee is eligible to act as such under Section
5.3(a);

      (b) the Institutional Trustee is duly organized, validly existing and in
good standing, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, the Declaration;

      (c) the execution, delivery and performance by the Institutional Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal, valid
and binding obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);

      (d) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and

      (e) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking or other regulatory authority is
required for the execution, delivery or performance by the Institutional
Trustee, of the Declaration.

      Section 13.2. Representations and Warranties of Delaware Trustee. The
Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:

      (a) The Delaware Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;

      (b) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the

                                      -43-
<PAGE>
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law);

      (c) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking or other regulatory authority is
required for the execution, delivery or performance by the Delaware Trustee, of
the Declaration; and

      (d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity that has its principal
place of business in the State of Delaware.

                                   ARTICLE XIV
                                  MISCELLANEOUS

      Section 14.1. Notices. All notices provided for in this Declaration shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:

      (a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):

            Unocal Capital Trust II
            c/o Unocal Corporation
            2141 Rosecrans Avenue, Suite 4000
            El Segundo, California 90245
            Fax No.: 310-726-7875
            Attention: Chief Legal Officer and General Counsel

      (b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):

            The Bank of New York (Delaware)
            White Clay Center
            Route 273
            Newark, Delaware 19711
            Fax No.:
            Attention:

      (c) if given to the Institutional Trustee, at its Corporate Trust Office
to the attention of Corporate Trust Trustee Administration (or such other
address as the Institutional Trustee may give notice of to the Holders of the
Securities).

      (d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):

                                      -44-
<PAGE>
            Unocal Corporation
            2141 Rosecrans Avenue, Suite 4000
            El Segundo, California 90245
            Fax No.: 310-726-7875
            Attention: Chief Legal Officer and General Counsel

      (e) if given to any other Holder, at the address set forth on the books
and records of the Trust. All such notices shall be deemed to have been given
when received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

      Section 14.2. Governing Law. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws of the State of
Delaware or any other jurisdiction that would call for the application of the
law of any jurisdiction other than the State of Delaware; provided, however,
that there shall not be applicable to the Trust, the Trustees or this
Declaration any provision of the laws (statutory or common) of the State of
Delaware pertaining to trusts that relate to or regulate, in a manner
inconsistent with the terms hereof, (i) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee fees and
charges, (ii) affirmative requirements to post bonds for trustees, officers,
agents or employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing trust assets, or
(vii) the establishment of fiduciary or other standards of responsibility or
limitations on the acts or powers of trustees that are inconsistent with the
limitations or liabilities or authorities and powers of the Trustees as set
forth or referenced in this Declaration. Section 3540 of Title 12 of Chapter 35
of the Delaware Code shall not apply to the Trust.

      Section 14.3. Intention of the Parties. It is the intention of the parties
hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.

      Section 14.4. Headings. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.

      Section 14.5. Successors and Assigns. Whenever in this Declaration any of
the parties hereto is named or referred to, the successors and assigns of such
party shall be deemed to be included, and all covenants and agreements in this
Declaration by the Sponsor and the Trustees shall bind and inure to the benefit
of their respective successors and assigns, whether so expressed.

                                      -45-
<PAGE>
     Section 14.6. Partial Enforceability. If any provision of this Declaration,
or the application of such provision to any Person or circumstance, shall be
held invalid, the remainder of this Declaration, or the application of such
provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.

     Section 14.7. Counterparts. This Declaration may contain more than one
counterpart of the signature page and this Declaration may be executed by the
affixing of the signature of each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the signers
had signed a single signature page.

                                      -46-
<PAGE>
      IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.

                                    -----------------------------------------
                                    Darrell D. Chessum, as Regular Trustee

                                    -----------------------------------------
                                    Daniel A. Franchi, as Regular Trustee

                                    -----------------------------------------
                                    Richard L. Walton, as Regular Trustee

                                    THE BANK OF NEW YORK (DELAWARE),
                                    as Delaware Trustee

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

                                    THE BANK OF NEW YORK,
                                    as Institutional Trustee

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

                                    UNOCAL CORPORATION, as Sponsor

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

                                      -47-
<PAGE>
                                     ANNEX I

                                    TERMS OF
                 ____% TRUST [CONVERTIBLE] PREFERRED SECURITIES
                          ____% TRUST COMMON SECURITIES

      Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust
of Unocal Capital Trust II (the "Trust"), dated as of _____________ (as amended
from time to time, the "Declaration"), the designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities and the Common Securities are set out below (each capitalized term
used but not defined herein has the meaning set forth in the Declaration):

      1. Designation and Number.

      (a) ___________________________ (____________) preferred securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of _____________________ Dollars ($___________), and an initial
liquidation amount with respect to the assets of $50 per preferred security, are
hereby designated for the purposes of identification only as "___% Trust
[Convertible] Preferred Securities" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be substantially
in the form of Exhibit A-1 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange or other organization
on which the Preferred Securities are listed or quoted.

      (b) ______________________ (__________) common securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
____________________ Dollars ($_________), and an initial liquidation amount
with respect to the assets of the Trust of $50 per common security, are hereby
designated for the purposes of identification only as "___ % Trust Common
Securities" (the "Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the form of Exhibit
A-2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.

      2. Distributions.

      (a) Distributions payable on each Security will be fixed at a rate per
annum of ___ % (the "Coupon Rate") of the liquidation amount of any Security,
such rate being the rate of interest payable on the Debentures held or to be
held by the Institutional Trustee. To the extent permitted by applicable law,
Distributions not paid on the regularly scheduled payment date therefor will
accumulate interest thereon at the Coupon Rate compounded quarterly. The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. Distributions are payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period shall
<PAGE>
be computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, shall be computed on
the basis of 30-day months and, for periods of less than a month, the actual
number of days elapsed per 30-day month.

      (b) Distributions on the Securities shall be cumulative, shall accumulate
from _________, ____, or the most recent date on which Distributions have been
paid in full, and shall be payable quarterly in arrears, on March 1, June 1,
September 1 and December 1 of each year, commencing on __________ 1, ____,
except as otherwise described below, when, as and if funds are available for
payment and except as otherwise described below. So long as the Debenture Issuer
shall not be in default in the payment of interest on the Debentures, the
Debenture Issuer has the right under the Indenture, at any time, and from time
to time, to defer payments of interest by extending the interest payment period
on the Debentures for a period not exceeding 20 consecutive quarterly interest
payment periods (each an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures, provided that no Extension
Period shall last beyond the date of maturity of the Debentures. As a
consequence of such deferral, Distributions will also be deferred. To the extent
permitted by applicable law, during such Extension Period, deferred quarterly
Distributions will continue to accumulate with interest thereon at the Coupon
Rate, for each quarter of the Extension Period. Before the termination of any
such Extension Period, the Debenture Issuer may further extend such Extension
Period; provided that such Extension Period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarters or extend
beyond the date of maturity of the Debentures. At the end of the Extension
Period, payments of accumulated Distributions shall be payable to Holders of
Preferred Securities on the first record date after the termination of such
Extension Period. Upon the termination of any such Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.

      (c) Distributions on the Securities shall be payable to the Holders
thereof as they appear on the books and records of the Trust as of the close of
business on the relevant record dates. While the Preferred Securities are
represented by a Global Certificate, the relevant record dates shall be the
close of business on the Business Day next preceding such distribution payment
date, unless otherwise provided in the Declaration or unless a different regular
record date is established or provided for the corresponding interest payment
date on the Debentures. The relevant record dates for the Common Securities
shall be the same as for the Preferred Securities. If the Preferred Securities
shall not continue to remain in book-entry only form, the relevant record dates
for the Preferred Securities shall be selected by the Regular Trustees, which
dates shall conform to the rules of any securities exchange or other
organization on which the Securities are listed or quoted, if any, and, shall be
at least one Business Day prior to the relevant payment dates, which payment
dates correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, shall cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which Distributions
are payable on the Securities is not a Business Day, then payment of the
Distribution payable on such date will be made

                                      A-2
<PAGE>
on the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment all be made on the
immediately preceding Business Day, in each case, with the same force and effect
as if made on such payment date.

      [(d) Accumulated but unpaid Distributions shall not be payable in cash on
Securities converted by the Holder into Common Stock through the Conversion
Agent into Common Stock pursuant to the terms of the Securities as set forth in
this Annex I to the Declaration, nor will such accumulated but unpaid
Distributions be converted into additional shares of Common Stock upon
conversion, but such accumulated but unpaid Distributions shall be deemed to be
paid in full and then returned by the Holder to the Sponsor as partial
consideration for Common Stock received on conversion, and no payment, allowance
or adjustment shall be made with respect to accumulated and unpaid Distributions
on such Securities, which shall be deemed to be paid in full. If any Securities
are converted into shares of Common Stock during the period from (but excluding)
a record date to (and including) the next succeeding distribution payment date,
then either (i) if such Securities have been called for redemption on a
redemption date that occurs during such period, or are to be redeemed in
connection with a Special Event which occurs during such period, the Trust shall
not be required to pay Distributions on such distribution payment date in
respect of such Securities or (ii) if otherwise converted during such period,
such Securities shall be accompanied by funds equal to the Distributions payable
on such succeeding distribution payment date on the liquidation amount so
converted.]

      (e) All Distributions will be made Pro Rata (as defined herein) to the
Holders of the Preferred Securities and the Common Securities entitled thereto.
In the event that there is any money or other property held by or for the Trust
that is not accounted for hereunder, such property shall be distributed Pro Rata
among the Holders of the Securities.

      3. Liquidation Distribution Upon Dissolution. In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Securities on the date of the dissolution, winding-up or
termination, as the case may be, shall be entitled to receive out of the assets
of the Trust available for distribution to Holders of Securities after
satisfaction of liabilities of creditors an amount equal to the aggregate
liquidation amount of the Securities plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, such dissolution, winding-up or termination occurs in
connection with a Special Event in which, in accordance with Section 4(c),
Debentures in an aggregate principal amount equal to the aggregate liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accumulated
and unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such Securities.

      If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.

                                      A-3
<PAGE>
      Holders of Securities will be entitled to receive Liquidation
Distributions on a Pro Rata basis.

      4. Redemption and Distribution.

      (a) Upon the repayment of the Debentures in whole or in part, whether at
maturity or upon redemption (either at the option of the Debenture Issuer or
pursuant to a Special Event as described below), the proceeds from such
repayment or payment shall be substantially simultaneously applied to redeem Pro
Rata Preferred Securities and Common Securities having an aggregate liquidation
amount equal to the aggregate principal amount of the Debentures so repaid or
redeemed at a redemption price per Security equal to the redemption price of the
Debentures, together with accrued and unpaid Distributions thereon through (but
excluding) the date of the redemption, payable in cash. Holders will be given
not less than 30 nor more than 60 days notice of such redemption.

      (b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed Pro Rata and
the Preferred Securities to be redeemed will be as described in Section 4(g)
below.

      (c) If, at any time, a Tax Event or an Investment Company Event (each, as
defined below, a "Special Event") shall occur and be continuing, the Regular
Trustees may with the consent of the Debenture Issuer, except in certain limited
circumstances described in this Section 4(c), dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Institutional Trustee,
having an aggregate principal amount equal to the aggregate liquidation amount
of, with an interest rate identical to the Coupon Rate of, and accrued and
unpaid interest equal to accrued and unpaid Distributions on, and having the
same record date for payment as the Securities, to be distributed to the Holders
of the Securities in liquidation of such Holders' interests in the Trust on a
Pro Rata basis, within 90 days following the occurrence of such Special Event
(the "90-Day Period"); provided, however, that such dissolution and distribution
shall be conditioned on (i) the Regular Trustees' receipt of an opinion of
independent tax counsel experienced in such matters (a "No Recognition
Opinion"), which opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the Holders of the Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and the distribution of Debentures, (ii)
the Debenture Issuer or the Trust being unable to eliminate, which elimination
shall be complete within the 90-Day Period, such Special Event by taking some
ministerial action that will have no adverse effect on the Trust, the Debenture
Issuer, the Sponsor or the Holders of the Securities or does not subject any of
them to more than de minimis regulatory requirements ("Ministerial Action"),
such as filing a form or making an election, or pursuing some other similar
reasonable measure, and (iii) the Debenture Issuer's prior written consent to
such dissolution and distribution.

      If in the event of a Special Event (i) after receipt of a Dissolution Tax
Opinion (as defined hereinafter) by the Regular Trustees, the Debenture Issuer
has received an opinion (a "Redemption Tax Opinion") of independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that the Debenture Issuer would be precluded from
deducting the interest on the Debentures for United States federal income tax
purposes even after the Debentures were distributed to the Holders of Securities
in liquidation of

                                      A-4
<PAGE>
such Holders' interests in the Trust as described in this Section 4(c), or (ii)
after receipt of a Dissolution Tax Opinion or a Change in 1940 Act Opinion by
the Regular Trustees, such Regular Trustees shall have been informed by
independent tax counsel experienced in such matters that it, for substantive
reasons, cannot deliver a No Recognition Opinion to the Trust, the Debenture
Issuer shall have the right, upon not less than 30 nor more than 60 days notice,
to redeem the Debentures, in whole or in part, at a redemption price equal to
100% of the principal amount to be redeemed plus accrued and unpaid interest
thereon to but excluding the date of such redemption, for cash within the 90-Day
Period. Following such redemption, Securities with an aggregate liquidation
amount equal to the aggregate principal amount of the Debentures so redeemed
shall be redeemed by the Trust at a redemption price equal to 100% of the
liquidation amount to be redeemed on a Pro Rata basis, plus accumulated but
unpaid Distributions thereon to but excluding such redemption date; provided,
however, that if at the time there is available to the Debenture Issuer or the
Trust the opportunity to eliminate, which elimination shall be complete within
the 90-Day Period, such Special Event by taking some Ministerial Action, the
Trust or the Debenture Issuer will pursue such Ministerial Action in lieu of
redemption.

      "Tax Event" means that the Regular Trustees shall have received an opinion
of independent tax counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that on or after ___________________, as a result of (a)
any amendment to, clarification of, or change (including any announced
prospective change) in the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, (b) any judicial decision, official administrative
pronouncement, ruling, regulatory procedure, notice or announcement, including
any notice or announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or change in
the official position or the interpretation of such Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental authority or
regulatory body, irrespective of the manner in which such amendment,
clarification or change is made known, which amendment, clarification, or change
is effective or such pronouncement or decision is announced, in each case, on or
after ___________________, there is more than an insubstantial risk that (i) the
Trust is or will be within 90 days of the date thereof, subject to United States
federal income tax with respect to interest accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges, or (iii) interest payable in cash by the Debenture Issuer to the Trust
on the Debentures, other than interest attributable to the Common Securities, is
not, or within 90 days of the date thereof will not be, deductible, in whole or
in part, by the Debenture Issuer for United States federal income tax purposes;
provided, however, that such an opinion shall not be deemed to be a "Dissolution
Tax Opinion" if the change in tax law that requires the Debenture Issuer for
United States federal income tax purposes to defer taking a deduction for any
original issue discount ("OID") that accrues with respect to the Debentures
until the interest payment related to such OID is paid by the Debenture Issuer
in cash, provided such change in tax law does not create more than an
insubstantial risk that the Debenture Issuer will be prevented from taking a
deduction for OID accruing with respect to the Debentures as of a date that is
no later than the date the interest payment related to such OID is actually paid
by the Debenture Issuer in cash.

                                      A-5
<PAGE>
      "Investment Company Event" means that the Regular Trustees shall have
received an opinion of independent counsel experienced in such matters (a
"Change in 1940 Act Opinion") to the effect that, as a result of the occurrence
of a change in law or regulation or a written change in interpretation or
application of law or regulations by any legislative body, court, governmental
agency or regulatory authority on or after ___________________, there is more
than an insubstantial risk that the Trust is or will be considered an
"investment company" which is required to be registered under the Investment
Company Act of 1940, as amended.

      On and from the date fixed by the Regular Trustees for any distribution of
Debentures upon dissolution of the Trust: (i) the Securities will be deemed to
be not outstanding, (ii) the Clearing Agency or its nominee, as the record
Holder of the Preferred Securities, will receive a registered certificate or
certificates representing the Debentures to be delivered upon such distribution,
and (iii) any certificates representing Securities, except for certificates
representing Preferred Securities held by the Clearing Agency or its nominee (or
any successor Clearing Agency or its nominee), will be deemed to represent
Debentures having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Preferred Securities until such certificates are presented to the Debenture
Issuer or its agent for transfer or reissue.

      (d) The Trust may not redeem any of the outstanding Preferred Securities
unless all accumulated and unpaid Distributions have been paid on all of the
outstanding Preferred Securities for all quarterly Distribution periods
terminating on or prior to the last Distribution payment date before the date of
redemption.

      (e) If the Debentures are distributed to Holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its
reasonable efforts to have the Debentures listed on the New York Stock Exchange
or listed or quoted on any national securities exchange, or with another
organization on which the Preferred Securities were listed or quoted immediately
prior to the distribution of the Debentures, if any.

      (f) Notice of any redemption of, or notice of distribution of Debentures
in exchange for the Securities (a "Redemption/Distribution Notice") will be
given by the Trust by mail to each Holder of Securities to be redeemed or
exchanged not less than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for redemption of the Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 4(f), a Redemption/Distribution Notice shall be deemed
to be given on the day such notice is first mailed by first-class mail, postage
prepaid, or by such other means suitable to assure delivery of such written
notice, to Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.

      (g) In the event that less than all the outstanding Securities are to be
redeemed, the Securities to be redeemed shall be redeemed Pro Rata from each
Holder of Preferred Securities,

                                      A-6
<PAGE>
it being understood that, in respect of Preferred Securities registered in the
name of and held of record by the Clearing Agency or its nominee, the
distribution of the proceeds of such redemption will be made to each Clearing
Agency Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by such Clearing Agency or
nominee.

      (h) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (i) while the Preferred Securities are in book-entry form,
with respect to the Preferred Securities, by 12:00 noon, New York City time, on
the redemption date, provided that the Debenture Issuer has paid the
Institutional Trustee, the Institutional Trustee will deposit irrevocably with
the Clearing Agency or its nominee funds sufficient to pay the applicable
redemption price and accumulated but unpaid Distributions thereon with respect
to the Preferred Securities and will give the Clearing Agency irrevocable
instructions and authority to pay such amounts to the Holders of the Preferred
Securities, and (ii) with respect to Preferred Securities issued in definitive
form and Common Securities, provided that the Debenture Issuer has paid the
Institutional Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Institutional Trustee will pay the
relevant redemption price and accumulated but unpaid Distributions thereon to
the Holders of such Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the redemption date.
If a Redemption/Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on the
required date of such deposit, distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such Securities
so called for redemption will cease, except the right of the Holders of such
Securities to receive the redemption price and accumulated but unpaid
Distributions thereon, but without further accrual of interest thereon. Neither
the Regular Trustees nor the Trust shall be required to register or cause to be
registered the transfer of any Securities that have been so called for
redemption. If any date fixed for redemption of Securities is not a Business
Day, then payment of the redemption price and accumulated but unpaid
Distributions thereon payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. In the event that payment of the redemption price and accumulated
but unpaid Distributions thereon in respect of any Securities is improperly
withheld or refused and not paid either by the Institutional Trustee or, if paid
to the Institutional Trustee, by the Sponsor as guarantor pursuant to the
Preferred Securities Guarantee, Distributions on such Securities will continue
to accumulate at the Coupon Rate from the original redemption date to the actual
date of payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the redemption price and
the accumulated but unpaid Distributions thereon.

      (i) Redemption/Distribution Notices shall be sent by the Regular Trustees
on behalf of the Trust to (A) in respect of the Preferred Securities, the
Clearing Agency or its nominee if the Global Certificates have been issued or,
if Definitive Preferred Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities, to the Holder thereof.

                                      A-7
<PAGE>
      (j) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or otherwise.

      [5. Conversion Rights. The Holder of Securities shall have the right at
any time, beginning ____________, _____ and prior to the close of business (New
York time) on _______________, 20__ (or, in the case of Securities called for
redemption, prior to the close of business (New York time) on the Business Day
prior to the redemption date), at their option, to cause the Conversion Agent to
convert Securities, on behalf of the converting Holders, into shares of Common
Stock in the manner described herein on and subject to the following terms and
conditions:

      (a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held by the Trust on the basis of $1 in
liquidation amount of a Security per $1 in principal amount of Debentures, and
immediately convert such amount of Debentures into that number of fully paid and
nonassessable shares of Common Stock obtained by dividing the principal amount
of such Debentures to be converted by the conversion price of the Debentures.
The initial conversion price of the Debentures is $__________. The conversion
price and the securities into which the Securities are convertible are subject
to certain adjustments set forth in Article VII of the Supplemental Indenture.

      (b) In order to convert Securities into Common Stock the Holder shall
deliver to the Conversion Agent at the office referred to above an irrevocable
request to convert Securities on behalf of such Holder (the "Conversion
Request"), together, if the Securities are in certificated form, with such
certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other than the Holder, in
which the shares of Common Stock should be issued and (ii) direct the Conversion
Agent (A) to exchange such Securities for a portion of the Debentures held by
the Trust (at the rate of exchange specified in the preceding paragraph) and (B)
to immediately convert such Debentures on behalf of such Holder, into Common
Stock (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to exchange
Securities for a portion of the Debentures held by the Trust and the Trust
shall, upon receipt of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debentures for exchange in accordance with this
Section. The Conversion Agent shall thereupon notify the Sponsor of the Holder's
election to convert such Debentures into shares of Common Stock. Except as
provided above, neither the Trust nor the Sponsor will make, or be required to
make, any payment, allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions accrued on the Securities (including any
Additional Amounts accrued thereon) surrendered for conversion, or on account of
any accumulated and unpaid dividends on the shares of Common Stock issued upon
such conversion. Securities shall be deemed to have been converted immediately
prior to the close of business on the day on which a Conversion Request relating
to such Securities is received by the Trust in accordance with the foregoing
provision (the "Conversion Date"). The Person or Persons entitled to receive
Common Stock issuable upon conversion of the Debentures shall be treated for all
purposes as the record holder or holders of such Common

                                      A-8
<PAGE>
Stock at such time. As promptly as practicable on or after the Conversion Date,
the Sponsor shall issue and deliver at the office of the Conversion Agent a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to receive the
same, unless otherwise directed by the Holder in the notice of conversion and
the Conversion Agent shall distribute such certificate or certificates and cash
payments, if any, to such Person or Persons.

      (c) Each Holder of a Security by his acceptance thereof appoints the
Institutional Trustee as "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the Debentures into Common Stock
and thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Section and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.

      (d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Sponsor to the Conversion Agent, which in turn will make such payment to
the Holder or Holders of Securities so converted.

      (e) Unocal shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion of
the Debentures, free from any preemptive or other similar rights, such number of
shares of Common Stock as shall from time to time be issuable upon the
conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, Unocal shall be entitled to deliver upon conversion of Debentures,
shares of Common Stock reacquired and held in the treasury of Unocal (in lieu of
the issuance of authorized and unissued shares of Common Stock), so long as any
such treasury shares are free and clear of all liens, charges, security
interests or encumbrances. Any shares of Common Stock issued upon conversion of
the Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Trust shall deliver the shares of Common Stock received upon
conversion of the Debentures to the converting Holder free and clear of all
liens, charges, security interests and encumbrances, except for United States
withholding taxes. Each of Unocal and the Trust shall prepare and shall use its
best efforts to obtain and keep in force such governmental or regulatory permits
or other authorizations as may be required by law, and shall comply with all
applicable requirements as to registration or qualification of Common Stock (and
all requirements to list Common Stock issuable upon conversion of Debentures
that are at the time applicable), in order to enable Unocal to lawfully issue
Common Stock to the Trust upon conversion of the Debentures and the Trust to
lawfully deliver Common Stock to each Holder upon conversion of the Securities.

      (f) Unocal will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of Common Stock on conversion of Debentures and
the delivery of the shares of Common Stock by the Trust upon conversion of the
Securities. Unocal shall not, however, be

                                      A-9
<PAGE>
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of shares of Common Stock in a name other than that in
which the Securities so converted were registered, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to the
Trust the amount of any such tax, or has established to the satisfaction of the
Trust that such tax has been paid.

      (g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities or set forth
in this Annex I to the Declaration or to the Declaration itself or otherwise
require the Institutional Trustee or the Trust to pay any amounts on account of
such withholdings.

      (h) Notwithstanding the foregoing, no Holder of Common Securities may
convert such number of Common Securities which, after giving effect to such
conversion, would result in the Holders of Common Securities in the aggregate
holding less then 1 % of the capital of the Trust.]

      6. Voting Rights - Preferred Securities.

      (a) Except as provided under Sections 6(b) and 8 and as otherwise required
by law and the Declaration, the Holders of the Preferred Securities will have no
voting rights.

      (b) Subject to the requirements set forth in this paragraph and to
Sections 3.10(a)(vi) and 3.7(a)(vii) of the Declaration, the Holders of a
Majority in liquidation amount of the Preferred Securities, voting separately as
a class, may direct the time, method, and place of conducting any proceeding for
any remedy available to the Institutional Trustee, or direct the exercise of any
trust or power conferred upon the Institutional Trustee under the Declaration,
in each case, as holder of the Debentures, including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) exercise the remedies
available under the Indenture with respect to the Debentures, (ii) waive any
past default and its consequences that is waivable under Section 6.06 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable, provided, however,
that, where a consent or action under the Indenture would require the consent or
act of holders of a Super Majority in aggregate principal amount of Debentures,
the Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the same Super Majority percentage
in liquidation amount of the Preferred Securities as is required under the
Indenture of aggregate principal amount of the Debentures outstanding. The
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth
above, the Institutional Trustee shall not take any action in accordance with
the directions of the Holders of the Preferred Securities under this paragraph
unless the Institutional Trustee has obtained an opinion of tax counsel to the
effect that, as a result of such action, the Trust will not be classified as
other than a grantor trust for United States federal income tax purposes. If an
Event of Default has occurred and is continuing and such event is attributable
to the failure of the Debenture Issuer to pay interest or principal on the
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then a Holder of Preferred
Securities may institute a Direct Action on or after the respective due date
specified in

                                      A-10
<PAGE>
the Debentures. In connection with such Direct Action, the rights of the Holders
of the Common Securities will be subrogated to the rights of such Holder of
Preferred Securities to the extent of any payment made by the Debenture Issuer
to such Holder of Preferred Securities in such Direct Action. Except as provided
in the preceding sentence, the Holders of Preferred Securities will not be able
to exercise directly any other remedy available to the holder of the Debentures.

      Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Preferred Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.

      No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem, exchange and/or cancel Preferred Securities or
to distribute Debentures, each in accordance with the Declaration and the terms
of the Securities.

      Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.

      7. Voting Rights - Common Securities.

      (a) Except as provided under Sections 7(b), 7(c) and 8 and as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.

      (b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.

      (c) Subject to Section 2.6 of the Declaration and only after any Event of
Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 6.06 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the

                                      A-11
<PAGE>
holders of a Super Majority in aggregate principal amount of the Debentures, the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the same Super Majority percentage
in liquidation amount of the Common Securities as is required under the
Indenture of aggregate principal amount of the Debentures outstanding. Pursuant
to this Section 7(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities. Other than with respect to directing the time, method and place of
conducting any remedy available to the Institutional Trustee or the Debenture
Trustee as set forth above, the Institutional Trustee shall not take any action
in accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights under the
Declaration, any Holder of Common Securities may institute a legal proceeding
directly against any Person to enforce the Institutional Trustee's rights under
the Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.

      Any approval or direction of Holders of Common Securities may be given at
a separate meeting of Holders of Common Securities convened for such purpose, at
a meeting of all of the Holders of Securities or pursuant to written consent.
The Regular Trustees will cause a notice of any meeting at which Holders of
Common Securities are entitled to vote, or of any matter upon which action by
written consent of such Holders is to be taken, to be mailed to each Holder of
Common Securities. Each such notice will include a statement setting forth (i)
the date of such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.

      No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
Debentures in accordance with the Declaration and the terms of the Securities.

      8. Amendments to Declaration and Indenture.

      (a) Subject to the provisions of Section 12.1 of the Declaration, if any
proposed amendment to the Declaration provides for, or the Regular Trustees
otherwise propose to effect, (i) any action that would adversely affect the
powers, preferences or special rights of the Securities in any material respect,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of at
least a Majority in liquidation amount of the Securities affected thereby;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.

                                      A-12
<PAGE>
      (b) In the event the consent of the Institutional Trustee, as the holder
of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the Holders of a Super Majority in aggregate principal amount of
the Debentures, the Institutional Trustee may only give such consent at the
direction of the Holders of at least the same Super Majority percentage in
liquidation amount of the Securities as is required under the Indenture of
aggregate principal amount of the Debentures outstanding; provided, further,
that the Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 8(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.

      9. Pro Rata. A reference in these terms of the Securities to any
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
has occurred and is continuing, in which case any funds available to make such
payment shall be paid first to each Holder of the Preferred Securities pro rata
according to the aggregate liquidation amount of Preferred Securities held by
such Holder relative to the aggregate liquidation amount of all Preferred
Securities outstanding, and only after satisfaction of all amounts owed to the
Holders of the Preferred Securities, to each Holder of Common Securities pro
rata according to the aggregate liquidation amount of Common Securities held by
such Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.

      10. Ranking. The Preferred Securities rank pari passu, and payment thereon
shall be made Pro Rata with, the Common Securities, except that where an Event
of Default occurs and is continuing, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption, and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.

      11. Acceptance of Preferred Securities Guarantee and Indenture. Each
Holder of Preferred Securities by the acceptance thereof, agrees to the
provisions of (a) the Preferred Securities Guarantee, including the
subordination provisions therein, and (b) the Indenture, including the
subordination provisions therein.

      12. No Preemptive Rights. The Holders of the Securities shall have no
preemptive rights to subscribe for any additional securities.

      13. Miscellaneous. These terms constitute a part of the Declaration.

      The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee (if appropriate), and the Indenture to a Holder without
charge on written request to the Sponsor at its principal place of business.

                                      A-13
<PAGE>

                                   EXHIBIT A-1

                     FORM OF PREFERRED SECURITY CERTIFICATE

                     [FORM OF FACE OF SECURITY CERTIFICATE]

         [IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT THE
FOLLOWING:

                  This Preferred Security is a Global Certificate within the
                  meaning of the Declaration hereinafter referred to and is
                  registered in the name of the Clearing Agency or a nominee of
                  the Clearing Agency. This Preferred Security is exchangeable
                  for Preferred Securities registered in the name of a person
                  other than the Clearing Agency or its nominee only in the
                  circumstances described in the Declaration and no transfer of
                  this Preferred Security (other than a transfer of this
                  Preferred Security as a whole by the Clearing Agency to a
                  nominee of the Clearing Agency or by a nominee of the Clearing
                  Agency to the Clearing Agency or another nominee of the
                  Clearing Agency) may be registered except in such
                  circumstances. ]

         [IF THE CLEARING AGENCY IS THE DEPOSITORY TRUST COMPANY, INSERT THE
FOLLOWING OR SUCH OTHER STATEMENT AS THE DEPOSITORY TRUST COMPANY SHALL SPECIFY:

                  Unless this Preferred Security is presented by an authorized
                  representative of The Depository Trust Company (55 Water
                  Street, New York, New York) to the Trust or its agent for
                  registration of transfer, exchange or payment, and any
                  Preferred Security issued is registered in the name of Cede &
                  Co. or such other name as requested by an authorized
                  representative of The Depository Trust Company (and any
                  payment hereon is made to Cede & Co. or to such other entity
                  as is requested by an authorized representative of The
                  Depository Trust Company), ANY TRANSFER, PLEDGE OR OTHER USE
                  HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since
                  the registered owner hereof, Cede & Co., has an interest
                  herein.]

<PAGE>

Certificate Number                     Number of Preferred Securities
                  ---------------                                    -----------

                            CUSIP No. [             ]
                                       -------------

      Certificate Evidencing ___% Trust [Convertible] Preferred Securities

                                       of

                             UNOCAL CAPITAL TRUST II

                 ___ % Trust [Convertible] Preferred Securities
                           (liquidation amount $__ per
                            Trust Preferred Security)

         Unocal Capital Trust II, a statutory trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that
__________________________________________ (the "Holder") is the registered
owner of preferred securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the __ % Trust [Convertible]
Preferred Securities (liquidation amount $__ per Trust [Convertible] Preferred
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of ___________________, ____, as the same may be amended from time to time
(the "Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.

         Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.

         By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.

         These Preferred Securities shall not be entitled to any benefit under
the Declaration, be valid or become obligatory for any purpose, until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Institutional Trustee.

         The provisions of these Preferred Securities are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.

                                      A1-2
<PAGE>

         IN WITNESS WHEREOF, the Trust has caused this certificate to be
executed.

                                          UNOCAL CAPITAL TRUST II

                                          By:
                                             -----------------------------------
                                             Name:
                                             Regular Trustee

                                      A1-3
<PAGE>

                     [FORM OF CERTIFICATE OF AUTHENTICATION]

              INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Preferred Securities referred to in the
within-mentioned Declaration.

Dated:

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

                                          THE BANK OF NEW YORK
                                          as Institutional Trustee or as
                                          Authentication Agent

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

                                      A1-4
<PAGE>

                          [FORM OF REVERSE OF SECURITY]

         Distributions payable on each Preferred Security will be fixed at a
rate per annum of __% (the "Coupon Rate") of the liquidation amount per
Preferred Security, such rate being the rate of interest payable on the
Debentures held by the Institutional Trustee. Distributions not paid on the
regularly scheduled payment date therefor will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of 30-day months and, for periods of less than a month,
the actual number of days elapsed per 30-day month.

         Except as otherwise described below, distributions on the Common
Securities shall be cumulative, shall accumulate from _______________, ____, or
the most recent date on which Distributions have been paid in full, and shall be
payable quarterly (subject to deferral as set forth in the Declaration and the
Indenture) in arrears, on March 1, June 1, September 1 and December 1 of each
year, commencing _____________1, ____, which payment dates shall correspond to
the interest payment dates on the Debentures, when, as and if funds are
available for payment, to Holders at the close of business on the regular record
date for such distribution, which regular record date shall be, while these
Preferred Securities are represented by a Global Certificate, the close of
business on the Business Day next preceding such distribution payment date,
unless otherwise provided in the Declaration or unless a different regular
record date is established or provided for the corresponding interest payment
date on the Debentures. The Debenture Issuer has the right under the Indenture
to defer payments of interest by extending the interest payment period from time
to time on the Debentures for a period (each an "Extension Period") not
exceeding 20 consecutive quarterly interest payment periods during which
Extension Period no interest is due and payable on the Debentures; provided that
no Extension Period shall last beyond the date of the maturity of the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. To the extent permitted by applicable law, during such Extension
Period deferred quarterly Distributions will continue to accumulate with
interest thereon at the Coupon Rate compounded quarterly for each quarter of the
Extension Period. Before the termination of any such Extension Period, the
Debenture Issuer may further extend such Extension Period; provided that such
Extension Period together with all such previous and further extensions thereof
may not exceed 20 consecutive quarters or extend beyond the maturity date of the
Debentures. At the end of the Extension Period, Payments of accumulated
Distributions shall be payable to Holders of Preferred Securities on the first
record date after the termination of such Extension Period. Upon the termination
of any such Extension Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period, subject to the
requirements set forth in the Indenture.

                                      A1-5
<PAGE>

         Upon repayment of the Debentures in whole or in part, whether at
maturity or upon redemption, the proceeds from such repayment or payment shall
be substantially simultaneously applied to redeem the Securities as provided in
the Declaration.

         The Preferred Securities shall be exchangeable at the option of the
Debenture Issuer in certain events as set forth in the Declaration and in the
Supplemental Indenture.

         [The Preferred Securities shall be convertible into shares of Common
Stock at the holder's direction to the Conversion Agent as set forth in the
Declaration.]

                                      A1-6
<PAGE>

                               [CONVERSION REQUEST

To:  [         ]
as Conversion Agent of
Unocal Capital Trust II

         The undersigned Holder of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of Unocal Corporation (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust of
Unocal Capital Trust II, dated as of _______________, _____ (as amended from
time to time, the "Declaration"). Pursuant to the aforementioned exercise of the
option to convert these Preferred Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) on behalf of the
undersigned to (i) exchange such Preferred Securities for a portion of the
Debentures (as that term is defined in the Declaration) held by the Trust (at
the rate of exchange specified in the terms of the Preferred Securities set
forth as Annex I to the Declaration) and (ii) immediately convert such
Debentures, into Common Stock pursuant to the terms of the Indenture (as defined
in the Declaration).

         The undersigned does also hereby direct the Conversion Agent that the
shares of Common Stock issuable and deliverable upon conversion, together with
any check in payment for fractional shares, be issued in the name of and
delivered to the undersigned, unless a different name has been indicated in the
assignment below. If shares are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.

Date:
     ------------------,------

         in whole __ in part ___

         Number of Preferred Securities to be converted: ____________________

         If a name or names other than the undersigned, please indicate in the
         spaces below the name or names in which the shares of Common Stock are
         to be issued, along with the address or addresses of such person or
         persons

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

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

         -------------------------
         Signature (for conversion only)

                                      A1-7
<PAGE>

         Please Print or Typewrite Name and Address, Including Zip Code, and
         Social Security or Other Identifying Number

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

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

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

         Signature Guarantee:(A)          ]
                                ----------

----------
(A)    Signature must be guaranteed by an "eligible guarantor institution" that
       is, a bank, stockbroker, savings and loan association or credit union
       meeting the requirements of the Conversion Agent, which requirements
       include membership or participation in the Securities Transfer Agents
       Medallion Program ("STAMP") or such other "signature guarantee program"
       as may be determined by the Conversion Agent in addition to, or in
       substitution for, STAMP, all in accordance with the Securities Exchange
       Act of 1934, as amended.

                                      A1-8
<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate to:

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

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

         ------------------------------------------------------------
        (Insert assignee's social security or tax identification number)

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

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

         ------------------------------------------------------------
                    (Insert address and zip code of assignee)

and irrevocably appoints ______________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.

         Date: __________________

         Signature: __________________

(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)

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

         Signature Guarantee:(A) __________]

----------
(A)    Signature must be guaranteed by an "eligible guarantor institution" that
       is, a bank, stockbroker, savings and loan association or credit union
       meeting the requirements of the Registrar, which requirements include
       membership or participation in the Securities Transfer Agents 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.

                                      A1-9
<PAGE>

                                   EXHIBIT A-2

                       FORM OF COMMON SECURITY CERTIFICATE

                     [FORM OF FACE OF SECURITY CERTIFICATE]

Certificate Number                       Number of Common Securities
                  --------------                                    ----------

               Certificate Evidencing ___% Trust Common Securities

                                       of

                             UNOCAL CAPITAL TRUST II

                          ____% Trust Common Securities

                  (liquidation amount $___ per Common Security)

         Unocal Capital Trust II, a statutory trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that
__________________________________________ (the "Holder") is the registered
owner of common securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the __% Trust Common Securities
(liquidation amount $___ per Common Security) (the "Common Securities"). The
Common Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of ________________, _____, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Sponsor will provide a copy of the Declaration and the Indenture to a Holder
without charge upon written request to the Trust at its principal place of
business.

         Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.

         By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.

         The provisions of these Common Securities are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.

<PAGE>

         IN WITNESS WHEREOF, the Trust has caused this certificate to be
executed.

                                          UNOCAL CAPITAL TRUST II

                                          By:
                                            ------------------------------------
                                            Name:
                                            Regular Trustee

                                      A2-2
<PAGE>

                          [FORM OF REVERSE OF SECURITY]

         Distributions payable on each Common Security will be fixed at a rate
per annum of __ % (the "Coupon Rate") of the liquidation amount per Common
Security, such rate being the rate of interest payable on the Debentures held by
the Institutional Trustee. Distributions not paid on the regularly scheduled
payment date therefor will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of 30-day months and, for periods of less than a month,
the actual number of days elapsed per 30-day month.

         Except as otherwise described below, distributions on the Preferred
Securities shall be cumulative, shall accumulate from ___________, ____, or the
most recent date on which Distributions have been paid in full, and shall be
payable quarterly (subject to deferral as set forth in the Declaration and the
Indenture) in arrears, on March 1, June 1, September 1 and December 1 of each
year, commencing __________ 1, ____, which payment dates shall correspond to the
interest payment dates on the Debentures, when, as and if funds are available
for payment, to Holders at the close of business on the regular record date for
such distribution, which regular record date shall be, while these Common
Securities are represented by a Global Certificate, the close of business on the
Business Day next preceding such distribution payment date, unless otherwise
provided in the Declaration or unless a different regular record date is
established or provided for the corresponding interest payment date on the
Debentures. The Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period from time to time
on the Debentures for a period (each an "Extension Period") not exceeding 20
consecutive quarterly interest payment periods during which Extension Period no
interest is due and payable on the Debentures, provided that no Extension Period
shall last beyond the date of the maturity of the Debentures. As a consequence
of such deferral, Distributions will also be deferred. To the extent permitted
by applicable law, during such Extension Period deferred quarterly Distributions
will continue to accumulate with interest thereon at the Coupon Rate compounded
quarterly for each quarter of the Extension Period. Before the termination of
any such Extension Period, the Debenture Issuer may further extend such
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarters
or extend beyond the maturity date of the Debentures. At the end of the
Extension Period, Payments of accumulated Distributions shall be payable to
Holders of Common Securities on the first record date after the termination of
such Extension Period. Upon the termination of any such Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the requirements set forth in the Indenture.

                                      A2-3
<PAGE>

         Upon repayment of the Debentures, in whole or in part, whether at
maturity or upon redemption, the proceeds from such repayment or payment shall
be substantially simultaneously applied to redeem the Securities as provided in
the Declaration.

         The Common Securities shall be exchangeable at the option of the
Debenture Issuer in certain events as set forth in the Declaration and in the
Supplemental Indenture.

         [The Common Securities shall be convertible into shares of Common Stock
at the holder's direction to the Conversion Agent as set forth in the
Declaration.]

                                      A2-4
<PAGE>

                               [CONVERSION REQUEST

To:  [    ]
as Conversion Agent of
Unocal Capital Trust II

         The undersigned Holder of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of Unocal Corporation (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust of
Unocal Capital Trust II, dated as of ______________, _____ (as amended from time
to time, the "Declaration"). Pursuant to the aforementioned exercise of the
option to convert these Common Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) on behalf of the
undersigned to (i) exchange such Common Securities for a portion of the
Debentures (as that term is defined in the Declaration) held by the Trust (at
the rate of exchange specified in the terms of the Common Securities set forth
as Annex I to the Declaration) and (ii) immediately convert such Debentures,
into Common Stock pursuant to the terms of the Indenture (as defined in the
Declaration).

         The undersigned does also hereby direct the Conversion Agent that the
shares of Common Stock issuable and deliverable upon conversion, together with
any check in payment for fractional shares, be issued in the name of and
delivered to the undersigned, unless a different name has been indicated in the
assignment below. If shares are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.

Date:
     -------------------,-----

         in whole __ in part ___
         Number of Common Securities to be converted:

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

         If a name or names other than the undersigned, please indicate in the
         spaces below the name or names in which the shares of Common Stock are
         to be issued, along with the address or addresses of such person or
         persons

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

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

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

         ---------------------------
         Signature (for conversion only)

                                      A2-5
<PAGE>

         Please Print or Typewrite Name and Address, Including Zip Code, and
         Social Security or Other Identifying Number

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

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

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

         Signature Guarantee:(A)                  ]
                                ------------------

----------

(A)    Signature must be guaranteed by an "eligible guarantor institution" that
       is, a bank, stockbroker, savings and loan association or credit union
       meeting the requirements of the Conversion Agent, which requirements
       include membership or participation in the Securities Transfer Agents
       Medallion Program ("STAMP") or such other "signature guarantee program"
       as may be determined by the Conversion Agent in addition to, or in
       substitution for, STAMP, all in accordance with the Securities Exchange
       Act of 1934, as amended.

                                      A2-6
<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:

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

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

             -------------------------------------------------------
        (Insert assignee's social security or tax identification number)

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

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

             -------------------------------------------------------
                    (Insert address and zip code of assignee)

and irrevocably appoints ______________________________________________________
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.

Date:
     -------------------------

Signature:
          --------------------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)

Signature Guarantee:(A)
                       -------------------------------

----------

(A)    Signature must be guaranteed by an "eligible guarantor institution" that
       is, a bank, stockbroker, savings and loan association or credit union
       meeting the requirements of the Registrar, which requirements include
       membership or participation in the Securities Transfer Agents 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.

                                      A2-7

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