Document:

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                                                             Exhibit 4.3

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                          FOREST CITY ENTERPRISES, INC.

                                       TO

            .........................................................
                                                              Trustee

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

                                    INDENTURE

                         Dated as of ...................

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

                        Junior Subordinated Securities

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

TRUST INDENTURE
  ACT SECTION                                              INDENTURE SECTION

Section 310(a)(1)  ......................................   609
          (a)(2)   ......................................   609
          (a)(3)   ......................................  Not Applicable
          (a)(4)   ......................................  Not Applicable
          (a)(5)   ......................................   609
          (b)      ......................................   608
                                                            610
          (c)      ......................................  Not Applicable
Section 311(a)     ......................................   613
          (b)      ......................................   613
          (c)      ......................................  Not Applicable
Section 312(a)     ......................................   701
                                                            702
          (b)      ......................................   702
          (c)      ......................................   702
Section 313(a)     ......................................   703
          (b)      ......................................   703
          (c)      ......................................   703
          (d)      ......................................   703
Section 314(a)     ......................................   704
                                                           1004
          (b)      ......................................  Not Applicable
          (c)(1)   ......................................   102
          (c)(2)   ......................................   102
          (c)(3)   ......................................  Not Applicable
          (d)      ......................................  Not Applicable
          (e)      ......................................   102
          (f)      ......................................  Not Applicable
Section 315(a)     ......................................   601
          (b)      ......................................   602
          (c)      ......................................   601
          (d)      ......................................   601
          (e)      ......................................   514
Section 316(a)     ......................................   101
          (a)(1)(A).....................................    502
                                                            512
          (a)(1)(B).....................................    513
          (a)(2)  ......................................   Not Applicable
          (b)     ......................................    508
          (c)     ......................................    104
Section 317(a)(1) ......................................    503
          (a)(2)  ......................................    504
          (b)     ......................................   1003
Section 318(a)    ......................................    107

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NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
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      INDENTURE, dated as of ................, 20__, between Forest City
Enterprises, Inc., a corporation duly organized and existing under the laws of
the State of Ohio (herein called the "Company"), having its principal office at
the Terminal Tower, 50 Public Square, Suite 1100, Cleveland, Ohio 44113-2203 and
..............................., a ........................... duly organized and
existing under the laws of ........, as Trustee (herein called the "Trustee").

                             RECITALS OF THE COMPANY

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

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

      NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

SECTION 101. Definitions.

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

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

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

            (3) all accounting terms not otherwise defined herein have the
      meanings assigned to them in accordance with generally accepted accounting
      principles, and, except as otherwise herein expressly provided, the term
      "generally accepted accounting principles" with respect to any computation
      required or permitted hereunder shall mean such accounting principles as
      are generally accepted at the date of such computation;
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            (4) unless the context otherwise requires, any reference to an
      "Article" or a "Section " refers to an Article or a Section , as the case
      may be, of this Indenture; and

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

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

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

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

      "Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board empowered to act for it with respect
to this Indenture.

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

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

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

      "Common Stock" includes any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which is not subject to redemption by the Company; provided, however,
subject to the provisions of Section 1409, shares issuable on conversions of
Securities shall include only shares of the class designated as Common Stock of
the Company at the date of this Indenture or shares

                                       -2-
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of any class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Company and which are not subject to redemption by the
Company; provided, further, that if at any time there shall be more than one
such resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.

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

      "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board (or any
Co-Chairman of the Board), its Chief Executive Officer, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.

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

      "corporation" means a corporation, association, partnership, company
(including, without limitation, a limited liability company), joint-stock
company or business trust.

      "Covenant Defeasance" has the meaning specified in Section 1303.

      "Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses, (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (iv)
every obligation of such Person issued or assumed as the deferred purchase
price of property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business), (v) all indebtedness
of the Person, whether incurred on or prior to the date of the Indenture or
thereafter incurred, for claims in respect of derivative products, including
interest rate, foreign exchange rate and commodity forward contracts, options
and swaps and similar arrangements; and (vi) every obligation of the type
referred to in the foregoing clauses (i) through (v) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable, directly or indirectly, as obligor,
guarantor or otherwise.

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

      "Defeasance" has the meaning specified in Section 1302.

      "Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301.

      "DTC" means The Depository Trust Company, a New York corporation.

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

      "Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.

      "Expiration Date" has the meaning specified in Section 104.

      "Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).

                                       -3-
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      "Holder" means a Person in whose name a Security is registered in the
Security Register.

      "Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.

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

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

      "Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.

      "Lien" means any mortgage, security interest, pledge, lien, charge or
other encumbrance.

      "Material Subsidiary" means _________________________.

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

      "Notice of Default" means a written notice of the kind specified in
Section 501(4) or 501(5).

      "Officers' Certificate" means a certificate signed by the Chairman of the
Board (or any Co-Chairman of the Board), the Chief Executive Officer, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given pursuant to
Section 1004 shall be the principal executive, financial or accounting officer
of the Company.

      "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.

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

                                       -4-
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      "Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:

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

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

            (3) Securities as to which Defeasance has been effected pursuant to
      Section 1302; and

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

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

                                       -5-
<PAGE>
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.

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

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

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

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

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

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

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

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

      "Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.

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

      "Senior Debt" means the principal of (and premium, if any) and interest if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to Forest City to the extent that
such claim for post-petition interest is allowed in such proceeding) on Debt of
Forest City, whether incurred on or prior to the date of the Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Securities or to other
Debt which is pari passu with, or subordinated to, the Securities; provided
however, that Senior Debt shall not be deemed to include (a) any Debt of Forest
City which, when incurred and without respect to any election under Section
1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to Forest
City, (b) Debt to any employee of Forest City, and (c) the Securities.

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

      "Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the

                                       -6-
<PAGE>
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.

      "Subsidiary" means a corporation more than 50% of the outstanding voting
stock (or similar equity interest) of which is owned, directly or indirectly,
by the Company or by one or more other Subsidiaries, or by the Company and one
or more other Subsidiaries. For the purposes of this definition, "voting stock"
means capital stock, beneficial or partnership interests having ordinary
voting power with respect to a Corporation.

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

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

      "U.S. Government Obligation" has the meaning specified in Section 1304.

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

SECTION 102. Compliance Certificates and Opinions.

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

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

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

                                       -7-
<PAGE>
      (2) a brief statement as to the nature and scope of the examination or
  investigation upon which the statements or opinions contained in such
  certificate or opinion are based;

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

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

SECTION 103. Form of Documents Delivered to Trustee.

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

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

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

SECTION 104. Acts of Holders; Record Dates.

    Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action

                                       -8-
<PAGE>
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section  601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

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

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

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

    The Company may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders of Securities of such series, provided that the Company may not set a
record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Securities of the relevant series
on such record date, and no other Holders, shall be entitled to take the
relevant action, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Trustee

                                       -9-
<PAGE>
in writing and to each Holder of Securities of the relevant series in the manner
set forth in Section 106.

    The Trustee may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to join in the
giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section  512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.

    With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.

    Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.

                                      -10-
<PAGE>
SECTION 105. Notices, Etc., to Trustee and Company.

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

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

      (2) the Company by the Trustee or by any Holder shall be sufficient for
  every purpose hereunder (unless otherwise herein expressly provided) if in
  writing and mailed, first-class postage prepaid, to the Company addressed to
  it at the address of its principal office specified in the first paragraph of
  this instrument or at any other address previously furnished in writing to the
  Trustee by the Company.

SECTION 106. Notice to Holders; Waiver.

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

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

SECTION 107. Conflict with Trust Indenture Act.

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

                                      -11-
<PAGE>
SECTION 108. Effect of Headings and Table of Contents.

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

SECTION 109. Successors and Assigns.

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

SECTION 110. Separability Clause.

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

SECTION 111. Benefits of Indenture.

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

SECTION 112. Governing Law.

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

SECTION 113. Legal Holidays.

    In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert a Security at a particular conversion price shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities (other than a provision of any Security which
specifically states that such provision shall apply in lieu of this Section ))
payment of interest or principal (and premium, if any) or, if applicable to a
particular series of Securities, conversion need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or

                                      -12-
<PAGE>
Redemption Date, at the Stated Maturity or on such last day for conversion, as
the case may be.

                                   ARTICLE TWO

                                 SECURITY FORMS

SECTION 201. Forms Generally.

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

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

SECTION 202. Form of Face of Security.

    [Insert any legend required by the Internal Revenue Code and the regulations
thereunder.]

           ..........................................................

   ..........................................................................

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

    Forest City Enterprises, Inc., a corporation duly organized and existing

under the laws of the State of Ohio (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to .....................................
..........., or registered assigns, the principal sum of .......................
................. Dollars on ...................................................
..... [if the Security is to bear interest prior to Maturity, insert -- , and
to pay interest thereon

                                      -13-
<PAGE>
from ............. or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on ............ and
............. in each year, commencing ........., at the rate of ....% per annum,
until the principal hereof is paid or made available for payment [if applicable,
insert -- , provided that any principal and premium, and any such installment of
interest, which is overdue shall bear interest at the rate of ...% per annum (to
the extent that the payment of such interest shall be legally enforceable), from
the dates such amounts are due until they are paid or made available for
payment, and such interest shall be payable on demand]. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the ....... or
........ (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].

[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of ....% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand. [Any such interest on overdue
principal or premium which is not paid on demand shall bear interest at the rate
of ......% per annum (to the extent that the payment of such interest on
interest shall be legally enforceable), from the date of such demand until the
amount so demanded is paid or made available for payment. Interest on any
overdue interest shall be payable on demand.]]

    Payment of the principal of (and premium, if any) and [if applicable, insert
-- any such] interest on this Security will be made at the office or agency of
the Company maintained for that purpose in ............, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [if applicable, insert -- ;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].

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

                                      -14-
<PAGE>
    Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

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

Dated:

                          ......................................................

                          By....................................................

Attest:

..........................................

Section 203.  Form of Reverse of Security.

    This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of ............... (herein called the "Indenture",
which term shall have the meaning assigned to it in such instrument), between
the Company and ..................., as Trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee, the holders of Senior Debt and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the series designated on the face hereof [if applicable,
insert -- , limited in aggregate principal amount to $...........].

    [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ........... in any year commencing with the year ...... and ending with
the year ...... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [if
applicable, insert -- on or after .........., 20..], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [if applicable, insert -- on
or before ..............., ...%, and if redeemed] during the 12-month period
beginning ............. of the years indicated,

                                      -15-
<PAGE>

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

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

    [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............ in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ............], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ............ of the years indicated,

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

and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated

                                      -16-
<PAGE>
Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.]

    [If applicable, insert -- Notwithstanding the foregoing, the Company may
not, prior to ............., redeem any Securities of this series as
contemplated by [if applicable, insert -- Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than .....% per annum.]

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

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

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

    [If applicable, insert -- The Indenture contains provisions for defeasance
at any time of [the entire indebtedness of this Security] [or] [certain
restrictive covenants and Events of Default with respect to this Security] [, in
each case] upon compliance with certain conditions set forth in the Indenture.]

    [If the Security is convertible into Common Stock of the Company, insert --
Subject to the provisions of the Indenture, the Holder of this Security is
entitled, at its option, at any time on or before [insert date] (except that, in
case this Security or any portion hereof shall be called for redemption, such
right shall terminate with respect to this Security or portion hereof, as the
case may be, so called for redemption at the close of business on the date fixed
for redemption as provided in the Indenture unless the Company defaults in
making the payment due upon redemption), to convert the principal amount of this
Security (or any portion hereof which is $1,000 or an integral multiple
thereof), into fully paid and non-assessable shares (calculated as to each
conversion to the nearest 1/100th of a share) of the Common Stock of the
Company, as said shares shall be constituted at the date of conversion, at the
conversion price of $....... principal amount of Securities for each share of
Common Stock, or at the adjusted conversion price in effect at the date of
conversion determined as provided in the Indenture, upon

                                      -17-
<PAGE>
surrender of this Security, together with the conversion notice hereon duly
executed, to the Company at the designated office or agency of the Company in
..........................., accompanied (if so required by the Company) by
instruments of transfer, in form satisfactory to the Company and to the Trustee,
duly executed by the Holder or by its duly authorized attorney in writing. Such
surrender shall, if made during any period beginning at the close of business on
a Regular Record Date and ending at the opening of business on the Interest
Payment Date next following such Regular Record Date (unless this Security or
the portion being converted shall have been called for redemption on a
Redemption Date during such period), also be accompanied by payment in funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Security then being
converted. Subject to the aforesaid requirement for payment and, in the case of
a conversion after the Regular Record Date next preceding any Interest Payment
Date and on or before such Interest Payment Date, to the right of the Holder of
this Security (or any Predecessor Security) of record at such Regular Record
Date to receive an installment of interest (with certain exceptions provided in
the Indenture), no adjustment is to be made on conversion for interest accrued
hereon or for dividends on shares of Common Stock issued on conversion. The
Company is not required to issue fractional shares upon any such conversion, but
shall make adjustment therefor in cash on the basis of the current market value
of such fractional interest as provided in the Indenture. The conversion price
is subject to adjustment as provided in the Indenture. In addition, the
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party or the sale of substantially all of the assets of the
Company, the Indenture shall be amended, without the consent of any Holders of
Securities, so that this Security, if then outstanding, will be convertible
thereafter, during the period this Security shall be convertible as specified
above, only into the kind and amount of securities, cash and other property
receivable upon the consolidation, merger or sale by a holder of the number of
shares of Common Stock into which this Security might have been converted
immediately prior to such consolidation, merger or sale (assuming such holder of
Common Stock failed to exercise any rights of election and received per share
the kind and amount received per share by a plurality of non-electing shares) [,
assuming if such consolidation, merger or sale is prior to ..............,
20...., that this Security were convertible at the time of such consolidation,
merger or sale at the initial conversion price specified above as adjusted from
..............., 20.... to such time pursuant to the Indenture]. In the event of
conversion of this Security in part only, a new Security or Securities for the
unconverted portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.]

    [If the Security is convertible into other securities of the Company,
specify the conversion features.]

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

                                      -18-
<PAGE>
    [If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]

    The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of more than 50% in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

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

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

    As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this

                                      -19-
<PAGE>
Security for registration of transfer at the office or agency of the Company in
any place where the principal of and any premium and interest on this Security
are payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

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

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

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

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

SECTION 204. Form of Legend for Global Securities.

    Unless otherwise specified as contemplated by Section 301 for the Securities
evidenced thereby, every Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:

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

    If the Security is a Global Security and The Depository Trust Company
is to be the Depositary therefor, then insert the following legend in
substantially the following form: UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW
YORK, NEW YORK 10004, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                                      -20-
<PAGE>
SECTION 205. Form of Trustee's Certificate of Authentication.

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

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

                                     ..........................................,
                                                                      As Trustee

                                     By.........................................
                                                              Authorized Officer

SECTION 206. Form of Conversion Notice. [If Applicable]

    To Forest City Enterprises, Inc.:

  The undersigned owner of this Security hereby irrevocably exercises the option
to convert this Security, or portion hereof (which is $1,000 or an integral
multiple thereof) below designated, into shares of Common Stock of the Company
in accordance with the terms of the Indenture referred to in this Security, and
directs that the shares issuable and deliverable upon the conversion, together
with any check in payment for fractional shares and any Securities representing
any unconverted principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. If
this Notice is being delivered on a date after the close of business on a
Regular Record Date and prior to the opening of business on the related Interest
Payment Date (unless this Security or the portion thereof being converted has
been called for redemption on a Redemption Date within such period), this Notice
is accompanied by payment, in funds acceptable to the Company, of an amount
equal to the interest payable on such Interest Payment Date of the principal of
this Security to be converted. 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 hereto. Any amount required to be paid by the undersigned
on account of interest accompanies this Security.

                                      -21-
<PAGE>
Principal Amount to be Converted
   (in an integral multiple of
   $1,000, if less than all):
   $.....................

Dated .....................................

                      ..........................................................
                      Signature(s) must be guaranteed by a commercial bank or
                      trust company or a member firm of a national stock
                      exchange if shares of Common Stock are to be delivered, or
                      Securities to be issued, other than to and in the name of
                      the registered owner.

                      ..........................................................
                               Signature Guaranty

  Fill in for registration of shares of Common Stock and Security if to be
issued otherwise than to the registered holder.

.............................   Social Security or Other Taxpayer Identification
(Name)                         Number .........................................

.............................
(Address)

.............................
Please print Name and Address
(including zip code number)

[The above conversion notice is to be modified, as appropriate, for conversion
into other securities or property of the Company.]

                                  ARTICLE THREE

                                 THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series.

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

    The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined

                                      -22-
<PAGE>
in the manner provided, in an Officers' Certificate, or established in one or
more indentures supplemental hereto, prior to the issuance of Securities of any
series,

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

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

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

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

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

    (6) the place or places where the principal of and any premium and interest
  on any Securities of the series shall be payable;

    (7) the period or periods within which, the price or prices at which and the
  terms and conditions upon which any Securities of the series may be redeemed,
  in whole or in part, at the option of the Company and, if other than by a
  Board Resolution, the manner in which any election by the Company to redeem
  the Securities shall be evidenced;

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

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

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

                                      -23-
<PAGE>
    (11) if other than the currency of the United States of America, the
  currency, currencies or currency units in which the principal of or any
  premium or interest on any Securities of the series shall be payable and the
  manner of determining the equivalent thereof in the currency of the United
  States of America for any purpose, including for purposes of the definition of
  "Outstanding" in Section 101;

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

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

    (14) if the principal amount payable at the Stated Maturity of any
  Securities of the series will not be determinable as of any one or more dates
  prior to the Stated Maturity, the amount which shall be deemed to be the
  principal amount of such Securities as of any such date for any purpose
  thereunder or hereunder, including the principal amount thereof which shall be
  due and payable upon any Maturity other than the Stated Maturity or which
  shall be deemed to be Outstanding as of any date prior to the Stated Maturity
  (or, in any such case, the manner in which such amount deemed to be the
  principal amount shall be determined);

    (15) if applicable, that the Securities of the series, in whole or any
  specified part, shall be defeasible pursuant to Section 1302 or Section 1303
  or both such Sections and, if other than by a Board Resolution, the manner in
  which any election by the Company to defease such Securities shall be
  evidenced;

    (16) if appicable, the terms of any right to convert Securities of the
  series into shares of Common Stock of the Company or other securities or
  property;

    (17) if applicable, that any Securities of the series shall be issuable in
  whole or in part in the form of one or more Global Securities and, in such
  case, the respective Depositaries for such Global Securities, the form of any
  legend or legends which shall be borne by any such Global Security in addition
  to or in lieu of that set forth in Section 204 and any circumstances in
  addition to or in lieu of those set forth in Clause (2) of the last paragraph
  of Section 305 in which any such Global Security may be exchanged in whole or
  in part for Securities registered, and any transfer of such Global Security in
  whole or in part may be registered, in the name or names of Persons other than
  the Depositary for such Global Security or a nominee thereof;

                                      -24-
<PAGE>
    (18) any addition to or change in the Events of Default which applies to any
  Securities of the series and any change in the right of the Trustee or the
  requisite Holders of such Securities to declare the principal amount thereof
  due and payable pursuant to Section 502;

    (19) any addition to or change in the covenants set forth in Article Ten
  which applies to Securities of the series; and

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

    All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.

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

    The Securities shall be subordinated in right of payment to Senior Debt as
provided in Article Fifteen.

SECTION 302. Denominations.

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

SECTION 303. Execution, Authentication, Delivery and Dating.

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

    Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the

                                      -25-
<PAGE>
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.

    At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,

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

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

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

If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

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

    Each Security shall be dated the date of its authentication.

    No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by

                                      -26-
<PAGE>
manual signature, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.

SECTION 304. Temporary Securities.

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

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

SECTION 305. Registration; Registration of Transfer and Exchange.

    The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

    Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated

                                      -27-
<PAGE>
transferee or transferees, one or more new Securities of the same series, of any
authorized denominations and of like tenor and aggregate principal amount.

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

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

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

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

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

    The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:

    (1) Each Global Security authenticated under this Indenture shall be
  registered in the name of the Depositary designated for such Global Security
  or a nominee thereof and delivered to such Depositary or a nominee thereof or
  custodian therefor, and each such Global Security shall constitute a single
  Security for all purposes of this Indenture. The Company initially appoints
  DTC to act as Depositary with respect to the Global Security(ies).

    (2) Notwithstanding any other provision in this Indenture, no Global
  Security may be exchanged in whole or in part for Securities registered, and
  no transfer of a Global

                                      -28-
<PAGE>
  Security in whole or in part may be registered, in the name of any Person
  other than the Depositary for such Global Security or a nominee thereof unless
  (A) such Depositary (i) has notified the Company that it is unwilling or
  unable to continue as Depositary for such Global Security or (ii) has ceased
  to be a clearing agency registered under the Exchange Act, (B) there shall
  have occurred and be continuing an Event of Default with respect to such
  Global Security or (C) there shall exist such circumstances, if any, in
  addition to or in lieu of the foregoing as have been specified for this
  purpose as contemplated by Section 301.

    (3) Subject to Clause (2) above, any exchange of a Global Security for other
  Securities may be made in whole or in part, and all Securities issued in
  exchange for a Global Security or any portion thereof shall be registered in
  such names as the Depositary for such Global Security shall direct.

    (4) Every Security authenticated and delivered upon registration of transfer
  of, or in exchange for or in lieu of, a Global Security or any portion
  thereof, whether pursuant to this Section , Section 304, 306, 906 or 1107 or
  otherwise, shall be authenticated and delivered in the form of, and shall be,
  a Global Security, unless such Security is registered in the name of a Person
  other than the Depositary for such Global Security or a nominee thereof.

    (5) The Depositary or its nominee, as registered owner of a Global Security,
  shall be the Holder of such Global Security for all purposes under this
  Indenture and the Securities.

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

    If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

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

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

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

                                      -29-
<PAGE>
    Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.

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

Section 307.  Payment of Interest; Interest Rights Preserved.

    Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

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

      (1) The Company may elect to make payment of any Defaulted Interest to the
    Persons in whose names the Securities of such series (or their respective
    Predecessor Securities) are registered at the close of business on a Special
    Record Date for the payment of such Defaulted Interest, which shall be fixed
    in the following manner. The Company shall notify the Trustee in writing of
    the amount of Defaulted Interest proposed to be paid on each Security of
    such series and the date of the proposed payment, and at the same time the
    Company shall deposit with the Trustee an amount of money equal to the
    aggregate amount proposed to be paid in respect of such Defaulted Interest
    or shall make arrangements satisfactory to the Trustee for such deposit
    prior to the date of the proposed payment, such money when deposited to be
    held in trust for the benefit of the Persons entitled to such Defaulted
    Interest as in this Clause provided. Thereupon the Trustee shall fix a
    Special Record Date for the payment of such Defaulted Interest which shall
    be not more than 15 days and not less than 10 days prior to the date of the
    proposed payment and not less than 10 days after the receipt by the Trustee
    of the notice of the proposed payment. The Trustee shall promptly notify the
    Company of such Special Record Date and, in the name and at the expense of
    the Company, shall cause notice of the proposed payment of such Defaulted
    Interest and the Special Record Date therefor to be given to each Holder of
    Securities of such series in the manner set forth in Section 106, not less
    than 10 days prior to such Special Record Date. Notice of the proposed
    payment of such Defaulted Interest and the Special

                                      -30-
<PAGE>
    Record Date therefor having been so mailed, such Defaulted Interest shall be
    paid to the Persons in whose names the Securities of such series (or their
    respective Predecessor Securities) are registered at the close of business
    on such Special Record Date and shall no longer be payable pursuant to the
    following Clause (2).

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

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

    Subject to the provisions of Section 1402, in the case of any Security (or
any part thereof) which is converted after any Regular Record Date and on or
prior to the next succeeding Interest Payment Date (other than any Security the
principal of (or premium, if any, on) which shall become due and payable,
whether at Stated Maturity or by declaration of acceleration prior to such
Interest Payment Date), interest whose Stated Maturity is on such Interest
Payment Date shall be payable on such Interest Payment Date notwithstanding such
conversion and such interest (whether or not punctually paid or duly provided
for) shall be paid to the Person in whose name that Security (or any one or more
Predecessor Securities) is registered at the close of business on such Regular
Record Date. Except as otherwise expressly provided in the immediately preceding
sentence or in Section 1402, in the case of any Security (or any part thereof)
which is converted, interest whose Stated Maturity is after the date of
conversion of such Security (or such part thereof) shall not be payable.

Section 308.  Persons Deemed Owners.

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

Section 309.  Cancellation.

    All Securities surrendered for payment, redemption, registration of transfer
or exchange or for credit against any sinking fund payment shall, if surrendered
to any

                                      -31-
<PAGE>
Person other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of as directed by a Company Order.

SECTION 310. Computation of Interest.

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

SECTION 311. CUSIP Numbers.

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

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

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

    (1) either

      (A) all Securities theretofore authenticated and delivered (other than (i)
    Securities which have been destroyed, lost or stolen and which have been
    replaced or paid as provided in Section 306 and (ii) Securities for whose
    payment money has theretofore been deposited in trust or segregated and held
    in trust by the Company and thereafter repaid to the Company or discharged
    from such trust, as provided in Section 1003) have been delivered to the
    Trustee for cancellation; or

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

        (i) have become due and payable, or

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

                                      -32-
<PAGE>

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

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

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

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

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

SECTION 402.  Application of Trust Money.

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

                                  ARTICLE FIVE

                                    REMEDIES

SECTION 501.  Events of Default.

    "Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of Article
Fifteen or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or

                                      -33-
<PAGE>
order of any court or any order, rule or regulation of any administrative or
governmental body):

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

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

    (3) default in the deposit of any sinking fund payment, when and as due by
  the terms of a Security of that series; or

    (4) default in the performance, or breach, of any covenant or warranty of
  the Company in this Indenture (other than a covenant or warranty a default in
  whose performance or whose breach is elsewhere in this Section specifically
  dealt with or which has expressly been included in this Indenture solely for
  the benefit of series of Securities other than that series), and continuance
  of such default or breach for a period of 60 days after there has been given,
  by registered or certified mail, to the Company by the Trustee or to the
  Company and the Trustee by the Holders of at least 25% in principal amount of
  the Outstanding Securities of that series a written notice specifying such
  default or breach and requiring it to be remedied and stating that such notice
  is a "Notice of Default" hereunder; or

    (5) a default under any bond, debenture, note or other evidence of
  indebtedness for money borrowed by the Company (including a default with
  respect to Securities of any series other than that series), or under any
  mortgage, indenture or instrument (including this Indenture) under which there
  may be issued or by which there may be secured or evidenced any indebtedness
  for money borrowed by the Company whether such indebtedness now exists or
  shall hereafter be created, which default (A) shall constitute a failure to
  pay any portion of the principal of such indebtedness when due and payable
  after the expiration of any applicable grace period with respect thereto or
  (B) shall have resulted in such indebtedness becoming or being declared due
  and payable prior to the date on which it would otherwise have become due and
  payable, without, in the case of Clause (A), such indebtedness having been
  discharged or without, in the case of Clause (B), such indebtedness having
  been discharged or such acceleration having been rescinded or annulled, in
  each such case within a period of 10 days after there shall have been given,
  by registered or certified mail, to the Company by the Trustee or to the
  Company and the Trustee by the Holders of at least 25% in principal amount of
  the Outstanding Securities of that series a written notice specifying such
  default and requiring the Company to cause such indebtedness to be discharged
  or cause such acceleration to be rescinded or annulled, as the case may be,
  and stating that such notice is a "Notice of Default" hereunder; or

    (6) the entry by a court having jurisdiction in the premises of (A) a decree
  or order for relief in respect of the Company or any Material Subsidiary in an
  involuntary case or proceeding under any applicable Federal or State
  bankruptcy, insolvency, reorganization or other similar law or (B) a decree or
  order adjudging the Company

                                      -34-
<PAGE>
  or any Material Subsidiary a bankrupt or insolvent, or approving as properly
  filed a petition seeking reorganization, arrangement, adjustment or
  composition of or in respect of the Company or any Material Subsidiary under
  any applicable Federal or State law, or appointing a custodian, receiver,
  liquidator, assignee, trustee, sequestrator or other similar official of the
  Company or any Material Subsidiary or of any substantial part of the property
  of either of them, or ordering the winding up or liquidation of the affairs of
  the Company or any Material Subsidiary, and the continuance of any such decree
  or order for relief or any such other decree or order unstayed and in effect
  for a period of 60 consecutive days; or

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

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

SECTION 502.  Acceleration of Maturity; Rescission and Annulment.

    If an Event of Default (other than an Event of Default specified in Section
501(6) or 501(7)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable (subject to Article Fifteen). If an Event of Default
specified in Section 501(6) or 501(7) with respect to Securities of any series
at the time Outstanding occurs, the principal amount of all the Securities of
that series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) shall automatically, and

                                      -35-
<PAGE>
without any declaration or other action on the part of the Trustee or any
Holder, become immediately due and payable.

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

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

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

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

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

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

  and

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

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

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

    The Company covenants that if

    (1) default is made in the payment of any interest on any Security when such
  interest becomes due and payable and such default continues for a period of 30
  days, or

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

                                      -36-
<PAGE>
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

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

SECTION 504.  Trustee May File Proofs of Claim.

    In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

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

                                      -37-
<PAGE>
SECTION 505.  Trustee May Enforce Claims Without Possession of Securities.

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

SECTION 506.  Application of Money Collected.

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

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

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

    THIRD: To the Company.

SECTION 507.  Limitation on Suits.

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

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

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

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

                                      -38-
<PAGE>
    (4) the Trustee for 60 days after its receipt of such notice, request and
  offer of indemnity has failed to institute any such proceeding; and

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

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

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

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

SECTION 509.  Restoration of Rights and Remedies.

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

SECTION 510.  Rights and Remedies Cumulative.

    Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise.

                                      -39-
<PAGE>
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

SECTION 511.  Delay or Omission Not Waiver.

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

SECTION 512.  Control by Holders.

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

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

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

SECTION 513.  Waiver of Past Defaults.

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

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

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

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

                                      -40-
<PAGE>
SECTION 514.  Undertaking for Costs.

    In any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken, suffered or omitted by
it as Trustee, a court may require any party litigant in such suit to file an
undertaking to pay the costs of such suit, and may assess costs against any such
party litigant, in the manner and to the extent provided in the Trust Indenture
Act; provided that neither this Section nor the Trust Indenture Act shall be
deemed to authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company or in any suit for the
enforcement of the right to convert any Security in accordance with Article
Fourteen.

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

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

                                   ARTICLE SIX

                                   THE TRUSTEE

SECTION 601.  Certain Duties and Responsibilities.

    The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

                                      -41-
<PAGE>
SECTION 602.  Notice of Defaults.

    If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.

SECTION 603.  Certain Rights of Trustee.

    Subject to the provisions of Section 601:

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

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

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

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

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

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

                                      -42-
<PAGE>
  if the Trustee shall determine to make such further inquiry or investigation,
  it shall be entitled to examine the books, records and premises of the
  Company, personally or by agent or attorney; and

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

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

    The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.

SECTION 605.  May Hold Securities and Act as Trustee Under Other Indentures.

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

    Subject to the limitations imposed by the Trust Indenture Act, nothing in
this Indenture shall prohibit the Trustee from becoming and acting as trustee
under other indentures under which other securities, or certificates of interest
of participation in other securities, of the Company are outstanding in the same
manner as if it were not Trustee hereunder.

SECTION 606.  Money Held in Trust.

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

                                      -43-
<PAGE>
SECTION 607.  Compensation and Reimbursement.

    The Company agrees

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

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

    (3) to indemnify the Trustee for, and to hold it harmless against, any loss,
  liability or expense incurred without negligence or bad faith on its part,
  arising out of or in connection with the acceptance or administration of the
  trust or trusts hereunder, including the costs and expenses of defending
  itself against any claim or liability in connection with the exercise or
  performance of any of its powers or duties hereunder.

SECTION 608.  Conflicting Interests.

    If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.

SECTION 609.  Corporate Trustee Required; Eligibility.

    There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accor-

                                      -44-
<PAGE>
dance with the provisions of this Section, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article.

SECTION 610.  Resignation and Removal; Appointment of Successor.

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

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

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

    If at any time:

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

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

    (3) the Trustee shall become incapable of acting or shall be adjudged a
  bankrupt or insolvent or a receiver of the Trustee or of its property shall be
  appointed or any public officer shall take charge or control of the Trustee or
  of its property or affairs for the purpose of rehabilitation, conservation or
  liquidation,

then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

    If the Trustee shall resign, be removed or become incapable of acting, or if
a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the

                                      -45-
<PAGE>
Securities of one or more or all of such series and that at any time there shall
be only one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

    The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

Section 611.  Acceptance of Appointment by Successor.

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

    In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring

                                      -46-
<PAGE>
Trustee is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.

    Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.

    No successor Trustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under this
Article.

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

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

                                      -47-
<PAGE>
SECTION 613.  Preferential Collection of Claims Against Company.

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

SECTION 614.  Appointment of Authenticating Agent.

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

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

    An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible

                                      -48-
<PAGE>
in accordance with the provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall give notice of such appointment in the manner provided in Section 106 to
all Holders of Securities of the series with respect to which such
Authenticating Agent will serve. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.

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

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

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

                                       ........................................,
                                                                      As Trustee

                                       By......................................,
                                                         As Authenticating Agent

                                       By.......................................
                                                              Authorized Officer

                                      -49-
<PAGE>
                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

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

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

    (1) semi-annually, not later than ............... and ................... in
  each year, a list, in such form as the Trustee may reasonably require, of the
  names and addresses of the Holders of Securities of each series as of the
  preceding .............. or .............., as the case may be, and

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

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

Section 702.  Preservation of Information; Communications to Holders.

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

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

    Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.

Section 703.  Reports by Trustee.

    The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.

                                      -50-
<PAGE>
    A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.

Section 704.  Reports by Company.

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

                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

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

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

    (1) in case the Company shall consolidate with or merge into another Person
  or convey, transfer or lease its properties and assets substantially as an
  entirety to any Person, the Person formed by such consolidation or into which
  the Company is merged or the Person which acquires by conveyance or transfer,
  or which leases, the properties and assets of the Company substantially as an
  entirety shall be a corporation, partnership or trust, shall be organized and
  validly existing under the laws of the United States of America, any State
  thereof or the District of Columbia and shall expressly assume, by an
  indenture supplemental hereto, executed and delivered to the Trustee, in form
  satisfactory to the Trustee, the due and punctual payment of the principal of
  and any premium and interest on all the Securities and the performance or
  observance of every covenant of this Indenture on the part of the Company to
  be performed or observed and the conversion rights shall be provided for in
  accordance with Article Fourteen, if applicable, or as otherwise specified
  pursuant to Section 301, by supplemental indenture satisfactory in form to the
  Trustee, executed and delivered to the Trustee, by the Person (if other than
  the Company) formed by such consolidation or into which the Company shall have
  been merged or by the Person which shall have acquired the Company's assets;

                                      -51-
<PAGE>
    (2) immediately after giving effect to such transaction and treating any
  indebtedness which becomes an obligation of the Company or any Subsidiary as a
  result of such transaction as having been incurred by the Company or such
  Subsidiary at the time of such transaction, no Event of Default, and no event
  which, after notice or lapse of time or both, would become an Event of
  Default, shall have happened and be continuing;

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

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

Section 802.  Successor Substituted.

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

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

Section 901.  Supplemental Indentures Without Consent of Holders.

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

                                      -52-
<PAGE>
    (1) to evidence the succession of another Person to the Company and the
  assumption by any such successor of the covenants of the Company herein and in
  the Securities; or

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

    (3) to add any additional Events of Default for the benefit of the Holders
  of all or any series of Securities (and if such additional Events of Default
  are to be for the benefit of less than all series of Securities, stating that
  such additional Events of Default are expressly being included solely for the
  benefit of such series); or

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

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

    (6) to secure the Securities; or

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

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

    (9) to make provision with respect to the conversion rights of Holders
  pursuant to the requirements of Article Fourteen, including providing for the
  conversion of the securities into any security (other than the Common Stock of
  the Company) or property of the Company; or

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

                                      -53-
<PAGE>
  that such action pursuant to this Clause (10) shall not adversely affect the
  interests of the Holders of Securities of any series in any material respect;
  or

    (11) to supplement any of the provisions of the Indenture to such extent as
  shall be necessary to permit or facilitate the defeasance and discharge of any
  series of Securities pursuant to Articles Four and Thirteen, provided that any
  such action shall not adversely affect the interests of the Holders of
  Securities of such series or any other series of Securities in any material
  respect.

Section  902.  Supplemental Indentures With Consent of Holders.

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

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

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

    (3) modify any of the provisions of this Section, Section 513 or Section
  1008, except to increase any such percentage or to provide that certain other
  provisions of this Indenture cannot be modified or waived without the consent
  of the Holder of each Outstanding Security affected thereby; provided,
  however, that this clause shall not be deemed to require the consent of any
  Holder with respect to changes in the references to "the Trustee" and
  concomitant changes in this Section and Section 1008, or the

                                      -54-
<PAGE>
  deletion of this proviso, in accordance with the requirements of Sections 611
  and 901(8), or

    (4) if applicable, make any change that adversely affects the right to
  convert any security as provided in Article Fourteen or pursuant to Section
  301 (except as permitted by Section 901(9)) or decrease the conversion rate or
  increase the conversion price of any such security.

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

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

Section  903.  Execution of Supplemental Indentures.

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

Section  904.  Effect of Supplemental Indentures.

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

Section  905.  Conformity with Trust Indenture Act.

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

                                      -55-
<PAGE>
SECTION 906.  Reference in Securities to Supplemental Indentures.

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

SECTION 907.  Subordination Unimpaired.

    No provision in any supplemental indenture which affects the superior
position of the holders of Senior Debt shall be effective against holders of
Senior Debt.

SECTION 908.  Consents or Waivers.

    Any consent or waiver sought from the Holders in accordance with any
provision of this Indenture may be obtained in connection with a tender offer
or exchange offer for any series of the Outstanding Securities or in
consideration of payments of money or other value for such consents or waivers,
provided that such tender offer, exchange offer or offer of consideration or
other value is made to all Holders of the Outstanding Securities of such series.

                                   ARTICLE TEN

                                    COVENANTS

SECTION 1001.  Payment of Principal, Premium and Interest.

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

SECTION 1002.  Maintenance of Office or Agency.

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

    The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided,

                                      -56-
<PAGE>
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in each Place of
Payment for Securities of any series for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.

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

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

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

    The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (1) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.

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

    Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust;

                                      -57-
<PAGE>
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The City of
New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.

Section 1004.  Statement by Officers as to Default.

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

Section 1005.  Existence.

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

Section 1006.  Maintenance of Properties.

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

                                      -58-
<PAGE>
Section 1007.  Payment of Taxes and Other Claims.

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

Section 1008. Waiver of Certain Covenants.

    Except as otherwise specified as contemplated by Section 301 for Securities
of such series, the Company may, with respect to the Securities of any series,
omit in any particular instance to comply with any term, provision or condition
set forth in any covenant provided pursuant to Section 301(19), 901(2) or 901(7)
for the benefit of the Holders of such series if before the time for such
compliance the Holders of a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

Section 1101.  Applicability of Article.

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

                                      -59-
<PAGE>
Section 1102.  Election to Redeem; Notice to Trustee.

    The election of the Company to redeem any Securities shall be evidenced by a
Board Resolution or in another manner specified as contemplated by Section 301
for such Securities. In case of any redemption at the election of the Company of
less than all the Securities of any series (including any such redemption
affecting only a single Security), the Company shall, at least 60 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.

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

    If less than all the Securities of any series are to be redeemed (unless all
the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Security of such series, provided that
the unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.

    If any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed (so far as
may be) to be the portion selected for redemption. Securities which have been
converted during a selection of Securities to be redeemed shall be treated by
the Trustee as Outstanding for the purpose of such selection.

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

    The provisions of the two preceding paragraphs shall not apply with respect
to any redemption affecting only a single Security, whether such Security is to
be redeemed in

                                      -60-
<PAGE>
whole or in part. In the case of any such redemption in part, the unredeemed
portion of the principal amount of the Security shall be in an authorized
denomination (which shall not be less than the minimum authorized denomination)
for such Security.

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

Section 1104.  Notice of Redemption.

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

    All notices of redemption shall state:

    (1) the Redemption Date,

    (2) the Redemption Price (including accrued interest, if any),

    (3) if less than all the Outstanding Securities of any series consisting of
  more than a single Security are to be redeemed, the identification (and, in
  the case of partial redemption of any such Securities, the principal amounts)
  of the particular Securities to be redeemed and, if less than all the
  Outstanding Securities of any series consisting of a single Security are to be
  redeemed, the principal amount of the particular Security to be redeemed,

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

    (5) the place or places where each such Security is to be surrendered for
  payment of the Redemption Price,

    (6) if applicable, the conversion price, that the date on which the right to
  convert the principal of the Securities or the portions thereof to be redeemed
  will terminate will be the Redemption Date and the place or places where such
  Securities may be surrendered for conversion, and

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

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

                                      -61-
<PAGE>
Section 1105.  Deposit of Redemption Price.

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

    If any Security called for redemption is converted, any money deposited with
the Trustee or with a Paying Agent or so segregated and held in trust for the
redemption of such Security shall (subject to the right of any Holder of such
Security to receive interest as provided in the last paragraph of Section 307)
be paid to the Company on Company Request, or if then held by the Company, shall
be discharged from such trust.

Section 1106.  Securities Payable on Redemption Date.

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

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

Section 1107.  Securities Redeemed in Part.

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

                                      -62-
<PAGE>
                                 ARTICLE TWELVE

                                  SINKING FUNDS

Section 1201.  Applicability of Article.

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

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

Section 1202.  Satisfaction of Sinking Fund Payments with Securities.

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

Section 1203.  Redemption of Securities for Sinking Fund.

    Not less than 45 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days prior to each such sinking fund payment date,
the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be

                                      -63-
<PAGE>
given in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.

                                ARTICLE THIRTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

Section 1301.  Company's Option to Effect Defeasance or Covenant Defeasance.

    The Company may elect, at its option at any time, to have Section 1302 or
Section 1303 applied to any Securities or any series of Securities, as the case
may be, designated pursuant to Section 301 as being defeasible pursuant to such
Section 1302 or 1303, in accordance with any applicable requirements provided
pursuant to Section 301 and upon compliance with the conditions set forth below
in this Article. Any such election shall be evidenced by a Board Resolution or
in another manner specified as contemplated by Section 301 for such Securities.

Section 1302.  Defeasance and Discharge.

    Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations, and the
provisions of Article Fifteen shall cease to be effective, with respect to such
Securities as provided in this Section on and after the date the conditions set
forth in Section 1304 are satisfied (hereinafter called "Defeasance"). For this
purpose, such Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by such Securities and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), subject to
the following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of such Securities to receive, solely from
the trust fund described in Section 1304 and as more fully set forth in such
Section, payments in respect of the principal of and any premium and interest on
such Securities when payments are due, (2) the Company's obligations with
respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (3) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and (4)
this Article. Subject to compliance with this Article, the Company may exercise
its option (if any) to have this Section applied to any Securities
notwithstanding the prior exercise of its option (if any) to have Section 1303
applied to such Securities.

                                      -64-
<PAGE>
Section 1303.  Covenant Defeasance.

    Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, (1)
the Company shall be released from its obligations under Section 801(3),
Sections 1006 through 1008, inclusive, and any covenants provided pursuant to
Section 301(19), 901(2) or 901(7) for the benefit of the Holders of such
Securities, (2) the occurrence of any event specified in Sections 501(4) (with
respect to any of Section 801(3), Sections 1006 through 1008, inclusive, and
any such covenants provided pursuant to Section 301(19), 901(2) or 901(7)),
501(5) and 501(8) shall be deemed not to be or result in an Event of Default and
(3) the provisions of Article Fifteen shall cease to be effective, in each case
with respect to such Securities as provided in this Section on and after the
date the conditions set forth in Section 1304 are satisfied (hereinafter called
"Covenant Defeasance"). For this purpose, such Covenant Defeasance means that,
with respect to such Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified Section (to the extent so specified in the case of Section
501(4)) or Article Fifteen, whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article to any other provision herein or in any
other document, but the remainder of this Indenture and such Securities shall be
unaffected thereby.

Section 1304.  Conditions to Defeasance or Covenant Defeasance.

    The following shall be the conditions to the application of Section 1302 or
Section 1303 to any Securities or any series of Securities, as the case may be:

    (1) The Company shall irrevocably have deposited or caused to be deposited
  with the Trustee (or another trustee which satisfies the requirements
  contemplated by Section 609 and agrees to comply with the provisions of this
  Article applicable to it) as trust funds in trust for the purpose of making
  the following payments, specifically pledged as security for, and dedicated
  solely to, the benefits of the Holders of such Securities, (A) money in an
  amount, or (B) U.S. Government Obligations which through the scheduled payment
  of principal and interest in respect thereof in accordance with their terms
  will provide, not later than one day before the due date of any payment, money
  in an amount, or (C) a combination thereof, in each case sufficient, in the
  opinion of a nationally recognized firm of independent public accountants
  expressed in a written certification thereof delivered to the Trustee, to pay
  and discharge, and which shall be applied by the Trustee (or any such other
  qualifying trustee) to pay and discharge, the principal of and any premium and
  interest on such Securities on the respective Stated Maturities, in accordance
  with the terms of this Indenture and such Securities. As used herein, "U.S.
  Government Obligation" means (x) any security which is (i) a direct obligation
  of the United States of America for the payment of which the full faith and
  credit of the United States of America is pledged or (ii) an obligation of a
  Person controlled or supervised by and acting as an agency or instrumentality
  of the United States of America the payment of which is uncondi-

                                      -65-
<PAGE>
  tionally guaranteed as a full faith and credit obligation by the United States
  of America, which, in either case (i) or (ii), is not callable or redeemable
  at the option of the issuer thereof, and (y) any depositary receipt issued by
  a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with
  respect to any U.S. Government Obligation which is specified in Clause (x)
  above and held by such bank for the account of the holder of such depositary
  receipt, or with respect to any specific payment of principal of or interest
  on any U.S. Government Obligation which is so specified and held, provided
  that (except as required by law) such custodian is not authorized to make any
  deduction from the amount payable to the holder of such depositary receipt
  from any amount received by the custodian in respect of the U.S. Government
  Obligation or the specific payment of principal or interest evidenced by such
  depositary receipt.

    (2) In the event of an election to have Section 1302 apply to any Securities
  or any series of Securities, as the case may be, the Company shall have
  delivered to the Trustee an Opinion of Counsel stating that (A) the Company
  has received from, or there has been published by, the Internal Revenue
  Service a ruling or (B) since the date of this instrument, there has been a
  change in the applicable Federal income tax law, in either case (A) or (B) to
  the effect that, and based thereon such opinion shall confirm that, the
  Holders of such Securities will not recognize gain or loss for Federal income
  tax purposes as a result of the deposit, Defeasance and discharge to be
  effected with respect to such Securities and will be subject to Federal income
  tax on the same amount, in the same manner and at the same times as would be
  the case if such deposit, Defeasance and discharge were not to occur.

    (3) In the event of an election to have Section 1303 apply to any Securities
  or any series of Securities, as the case may be, the Company shall have
  delivered to the Trustee an Opinion of Counsel to the effect that the Holders
  of such Securities will not recognize gain or loss for Federal income tax
  purposes as a result of the deposit and Covenant Defeasance to be effected
  with respect to such Securities and will be subject to Federal income tax on
  the same amount, in the same manner and at the same times as would be the case
  if such deposit and Covenant Defeasance were not to occur.

    (4) The Company shall have delivered to the Trustee an Officer's Certificate
  to the effect that neither such Securities nor any other Securities of the
  same series, if then listed on any securities exchange, will be delisted as a
  result of such deposit.

    (5) No event which is, or after notice or lapse of time or both would
  become, an Event of Default with respect to such Securities or any other
  Securities shall have occurred and be continuing at the time of such deposit
  or, with regard to any such event specified in Sections 501(6) and (7), at any
  time on or prior to the 90th day after the date of such deposit (it being
  understood that this condition shall not be deemed satisfied until after such
  90th day).

    (6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to
  have a conflicting interest within the meaning of the Trust Indenture Act
  (assuming all Securities are in default within the meaning of such Act).

                                      -66-
<PAGE>
    (7) Such Defeasance or Covenant Defeasance shall not result in a breach or
  violation of, or constitute a default under, any other agreement or instrument
  to which the Company is a party or by which it is bound.

    (8) Such Defeasance or Covenant Defeasance shall not result in the trust
  arising from such deposit constituting an investment company within the
  meaning of the Investment Company Act unless such trust shall be registered
  under such Act or exempt from registration thereunder.

    (9) At the time of such deposit, (A) no default in the payment of any
  principal of or premium or interest on any Senior Debt shall have occurred and
  be continuing, (B) no event of default with respect to any Senior Debt shall
  have resulted in such Senior Debt becoming, and continuing to be, due and
  payable prior to the date on which it would otherwise have become due and
  payable (unless payment of such Senior Debt has been made or duly provided
  for), and (C) no other event of default with respect to any Senior Debt shall
  have occurred and be continuing permitting (after notice or lapse of time or
  both) the holders of such Senior Debt (or a trustee on behalf of such holders)
  to declare such Senior Debt due and payable prior to the date on which it
  would otherwise have become due and payable.

    (10) The Company shall have delivered to the Trustee an Officer's
  Certificate and an Opinion of Counsel, each stating that all conditions
  precedent with respect to such Defeasance or Covenant Defeasance have been
  complied with.

Section 1305.  Deposited Money and U.S. Government Obligations to be
  Held in Trust; Miscellaneous Provisions.

    Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law. Money and U.S. Government
Obligations so held in trust shall not be subject to the provisions of Article
Fifteen.

    The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.

                                      -67-
<PAGE>
    Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or U.S. Government Obligations held by it as provided in Section 1304 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.

Section 1306.  Reinstatement.

    If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1305 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.

                                      -68-
<PAGE>
                                ARTICLE FOURTEEN

                            CONVERSION OF SECURITIES

Section 1401.  Applicability of Article.

    The provisions of this Article shall be applicable to the Securities of any
series which are convertible into shares of Common Stock of the Company, and the
issuance of such shares of Common Stock upon the conversion of such Securities,
except as otherwise specified as contemplated by Section 301 for the Securities
of such series.

Section 1402.  Exercise of Conversion Privilege.

    In order to exercise a conversion privilege, the Holder of a Security of a
series with such a privilege shall surrender such Security to the Company at the
office or agency maintained for that purpose pursuant to Section 1002,
accompanied by a duly executed conversion notice to the Company substantially in
the form set forth in Section 206 stating that the Holder elects to convert such
Security or a specified portion thereof. Such notice shall also state, if
different from the name and address of such Holder, the name or names (with
address) in which the certificate or certificates for shares of Common Stock
which shall be issuable on such conversion shall be issued. Securities
surrendered for conversion shall (if so required by the Company or the Trustee)
be duly endorsed by or accompanied by instruments of transfer in forms
satisfactory to the Company and the Trustee duly executed by the registered
Holder or its attorney duly authorized in writing; and Securities so surrendered
for conversion (in whole or in part) during the period from the close of
business on any Regular Record Date to the opening of business on the next
succeeding Interest Payment Date (excluding Securities or portions thereof
called for redemption during such period) shall also be accompanied by payment
in funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of such Security then being
converted, and such interest shall be payable to such registered Holder
notwithstanding the conversion of such Security, subject to the provisions of
Section 307 relating to the payment of Defaulted Interest by the Company. As
promptly as practicable after the receipt of such notice and of any payment
required pursuant to a Board Resolution and, subject to Section 303, set forth,
or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto setting forth the
terms of such series of Security, and the surrender of such Security in
accordance with such reasonable regulations as the Company may prescribe, the
Company shall issue and shall deliver, at the office or agency at which such
Security is surrendered, to such Holder or on its written order, a certificate
or certificates for the number of full shares of Common Stock issuable upon the
conversion of such Security (or specified portion thereof), in accordance with
the provisions of such Board Resolution, Officers' Certificate or supplemental
indenture, and cash as provided therein in respect of any fractional share of
such Common Stock otherwise issuable upon such conversion. Such conversion shall
be deemed to have been

                                      -69-
<PAGE>
effected immediately prior to the close of business on the date on which such
notice and such payment, if required, shall have been received in proper order
for conversion by the Company and such Security shall have been surrendered as
aforesaid (unless such Holder shall have so surrendered such Security and shall
have instructed the Company to effect the conversion on a particular date
following such surrender and such Holder shall be entitled to convert such
Security on such date, in which case such conversion shall be deemed to be
effected immediately prior to the close of business on such date) and at such
time the rights of the Holder of such Security as such Security Holder shall
cease and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock of the Company shall be issuable upon
such conversion shall be deemed to have become the Holder or Holders of record
of the shares represented thereby. Except as set forth above and subject to the
final paragraph of Section 307, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Securities (or any part
thereof) surrendered for conversion or on account of any dividends on the Common
Stock of the Company issued upon such conversion.

    In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense of the Company,
a new Security or Securities of the same series, of authorized denominations, in
aggregate principal amount equal to the unconverted portion of such Security.

Section 1403.  No Fractional Shares.

    No fractional share of Common Stock of the Company shall be issued upon
conversions of Securities of any series. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Securities (or specified portions thereof
to the extent permitted hereby) so surrendered. If, except for the provisions of
this Section 1403, any Holder of a Security or Securities would be entitled to a
fractional share of Common Stock of the Company upon the conversion of such
Security or Securities, or specified portions thereof, the Company shall pay to
such Holder an amount in cash equal to the current market value of such
fractional share computed, (i) if such Common Stock is listed or admitted to
unlisted trading privileges on a national securities exchange, on the basis of
the last reported sale price regular way on such exchange on the last trading
day prior to the date of conversion upon which such a sale shall have been
effected, or (ii) if such Common Stock is not at the time so listed or admitted
to unlisted trading privileges on a national securities exchange, on the basis
of the average of the bid and asked prices of such Common Stock in the
over-the-counter market, on the last trading day prior to the date of
conversion, as reported by the National Quotation Bureau, Incorporated or
similar organization if the National Quotation Bureau, Incorporated is no longer
reporting such information, or if not so available, the fair market price as
determined by the Board of Directors. For purposes of this Section, "trading
day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday other than
any day on which the Common Stock is not traded on the Nasdaq National Market
System, or if the Common Stock is

                                      -70-
<PAGE>
not traded on the Nasdaq National Market System, on the principal exchange or
market on which the Common Stock is traded or quoted.

Section 1404.  Adjustment of Conversion Price.

    The conversion price of Securities of any series that is convertible into
Common Stock of the Company shall be adjusted for any stock dividends, stock
splits, reclassifications, combinations or similar transactions in accordance
with the terms of the supplemental indenture or Board Resolutions setting forth
the terms of the Securities of such series.

    Whenever the conversion price is adjusted, the Company shall compute the
adjusted conversion price in accordance with terms of the applicable Board
Resolution or supplemental indenture and shall prepare an Officers' Certificate
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 at each office or agency maintained for the purpose of conversion of
Securities pursuant to Section 1002 and, if different, with the Trustee. The
Company shall forthwith cause a notice setting forth the adjusted conversion
price to be mailed, first class postage prepaid, to each Holder of Securities of
such series at its address appearing on the Security Register and to any
conversion agent other than the Trustee.

Section 1405.  Notice of Certain Corporate Actions.

In case:

    (1) the Company shall declare a dividend (or any other distribution) on its
  Common Stock payable otherwise than in cash out of its retained earnings
  (other than a dividend for which approval of any shareholders of the Company
  is required); or

    (2) the Company shall authorize the granting to the holders of its Common
  Stock of rights, options or warrants to subscribe for or purchase any shares
  of capital stock of any class or of any other rights (other than any such
  grant for which approval of any shareholders of the Company is required); or

    (3) of any reclassification of the Common Stock of the Company (other than a
  subdivision or combination of its outstanding shares of Common Stock, or of
  any consolidation, merger or share exchange to which the Company is a party
  and for which approval of any shareholders of the Company is required), or of
  the sale of all or substantially all of the assets of the Company; or

    (4) of the voluntary or involuntary dissolution, liquidation or winding up
  of the Company;

                                      -71-
<PAGE>
then the Company shall cause to be filed with the Trustee, and shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Securities Register, at least 20 days (or 10 days in any case specified in
Clause (1) or (2) above) prior to the applicable record date hereinafter
specified, a notice stating (i) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights, options 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, options or
warrants are to be determined, or (ii) the date on which such reclassification,
consolidation, merger, share exchange, sale, 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, share exchange, sale, dissolution,
liquidation or winding up. If at any time the Trustee shall not be the
conversion agent, a copy of such notice shall also forthwith be filed by the
Company with the Trustee.

Section 1406.  Reservation of Shares of Common Stock.

    The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock of the Company then issuable upon the conversion of all outstanding
Securities of any series that has conversion rights.

Section 1407.  Payment of Certain Taxes Upon Conversion.

    The Company will pay any and all taxes that may be payable in respect of the
issue or delivery of shares of its Common Stock on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of its Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to the
Company the amount of any such tax, or has established, to the satisfaction of
the Company, that such tax has been paid.

Section 1408.  Nonassessability.

    The Company covenants that all shares of its Common Stock which may be
issued upon conversion of Securities will upon issue in accordance with the
terms hereof be duly and validly issued and fully paid and nonassessable.

                                      -72-
<PAGE>
Section 1409.  Effect of Consolidation or Merger on Conversion Privilege.

    In case of any consolidation of the Company with, or merger of the Company
into or with any other Person, or in case of any sale of all or substantially
all of the assets of the Company, the Company or the Person formed by such
consolidation or the Person into which the Company shall have been merged or the
Person which shall have acquired such assets, as the case may be, shall execute
and deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then outstanding of any series that is convertible into Common
Stock of the Company shall have the right, which right shall be the exclusive
conversion right thereafter available to said Holder (until the expiration of
the conversion right of such Security), to convert such Security into the kind
and amount of shares of stock or other securities or property (including cash)
receivable upon such consolidation, merger or sale by a holder of the number of
shares of Common Stock of the Company into which such Security might have been
converted immediately prior to such consolidation, merger or sale, subject to
compliance with the other provisions of this Indenture, such Security and such
supplemental indenture. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in such Security. The above provisions of this Section
shall similarly apply to successive consolidations, mergers or sales. It is
expressly agreed and understood that anything in this Indenture to the contrary
notwithstanding, if, pursuant to such merger, consolidation or sale, holders of
outstanding shares of Common Stock of the Company do not receive shares of
common stock of the surviving corporation but receive other securities, cash or
other property or any combination thereof, Holders of Securities shall not have
the right to thereafter convert their Securities into common stock of the
surviving corporation or the corporation which shall have acquired such assets,
but rather, shall have the right upon such conversion to receive the other
securities, cash or other property receivable by a holder of the number of
shares of Common Stock of the Company into which the Securities held by such
holder might have been converted immediately prior to such consolidation, merger
or sale, all as more fully provided in the first sentence of this Section 1409.
Anything in this Section 1409 to the contrary notwithstanding, the provisions of
this Section 1409 shall not apply to a merger or consolidation of another
corporation with or into the Company pursuant to which both of the following
conditions are applicable: (i) the Company is the surviving corporation and (ii)
the outstanding shares of Common Stock of the Company are not changed or
converted into any other securities or property (including cash) or changed in
number or character or reclassified pursuant to the terms of such merger or
consolidation.

    As evidence of the kind and amount of shares of stock or other securities or
property (including cash) into which Securities may properly be convertible
after any such consolidation, merger or sale, or as to the appropriate
adjustments of the conversion prices applicable with respect thereto, the
Trustee shall be furnished with and may accept the certificate or opinion of an
independent certified public accountant with respect thereto; and, in the
absence of bad faith on the part of the Trustee, the Trustee may conclusively
rely thereon, and shall not be responsible or accountable to any Holder of
Securities for any provision in conformity therewith or approved by such
independent certified accountant which may be contained in said supplemental
indenture.

                                      -73-
<PAGE>
Section 1410. Duties of Trustee Regarding Conversion.

  Neither the Trustee nor any conversion agent shall at any time be under any
duty or responsibility to any Holder of Securities of any series that is
convertible into Common Stock of the Company 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, whether herein or in any supplemental indenture, any
resolutions of the Board of Directors or written instrument executed by one or
more officers of the Company provided to be employed in making the same. Neither
the Trustee nor any conversion agent shall be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock of the
Company, or of any securities or property, which may at any time be issued or
delivered upon the conversion of any Securities and neither the Trustee nor any
conversion agent makes any representation with respect thereto. Subject to the
provisions of Section 601, neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of its Common Stock or stock certificates or other securities or property
upon the surrender of any Security for the purpose of conversion or to comply
with any of the covenants of the Company contained in this Article Fourteen or
in the applicable supplemental indenture, resolutions of the Board of Directors
or written instrument executed by one or more duly authorized officers of the
Company.

Section 1411. Repayment of Certain Funds Upon Conversion.

  Any funds which at any time shall have been deposited by the Company or on
its behalf with the Trustee or any other paying agent for the purpose of paying
the principal of, and premium, if any, and interest, if any, on any of the
Securities (including, but not limited to, funds deposited for the sinking fund
referred to in Article Twelve hereof and funds deposited pursuant to Article
Thirteen hereof) and which shall not be required for such purposes because of
the conversion of such Securities as provided in this Article Fourteen shall
after such conversion be repaid to the Company by the Trustee upon the Company's
written request.

                                ARTICLE FIFTEEN

                          SUBORDINATION OF SECURITIES

Section 1501. Securities Subordinate to Senior Debt.

  Except as otherwise provided in a supplemental indenture or pursuant to
Section 301 the Company covenants and agrees, and each Holder of a Security, by
its acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article, the indebtedness
represented by the Securities and the payment

                                      -74-
<PAGE>
of the principal of and any premium and interest on each and all of the
Securities are hereby expressly made subordinate and subject in right of payment
to the prior payment in full of all Senior Debt.

Section 1502. Payment Over of Proceeds Upon Dissolution, Etc.

  In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization, debt restructuring or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of the Company, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Company,
then and in any such event the holders of Senior Debt shall be entitled to
receive payment in full of all amounts due or to become due on or in respect of
all Senior Debt, or provision shall be made for such payment in money or money's
worth, before the Holders of the Securities are entitled to receive any payment
on account of principal of or any premium or interest on the Securities, and to
that end the holders of Senior Debt or their representative or representatives
or the trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Debt may have been issued shall be entitled to
receive, for application to the payment thereof, any payment or distribution of
any kind or character, whether in cash, property or securities, which may be
payable or deliverable in respect of the Securities in any such case,
proceeding, dissolution, liquidation or other winding up or event, to the extent
necessary to pay all Senior Debt in full, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Debt.

  In the event that, notwithstanding the foregoing provisions of this Section,
the Trustee or the Holder of any Security shall have received any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, before all Senior Debt is paid in full or payment
thereof provided for, then and in such event such payment or distribution shall
be paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making payment
or distribution of assets of the Company for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.

  For purposes of this Article only, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment which are subordinated in right of
payment to all Senior Debt which may at the time be outstanding to substantially
the same extent as, or to a greater extent than, the Securities are so
subordinated as provided in this Article. The consolidation of the Company with,
or the merger of the Company into, another Person or the liquidation or
dissolution of the Company following the conveyance or transfer of its
properties and assets substantially as an entirety to another Person upon the
terms and

                                      -75-
<PAGE>
conditions set forth in Article Eight shall not be deemed a dissolution, winding
up, liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company for the purposes of this
Section if the Person formed by such consolidation or into which the Company is
merged or which acquires by conveyance or transfer such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article Eight.

Section 1503. Prior Payment to Senior Debt Upon Acceleration of Securities.

  In the event that any Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due or to become due on or in
respect of all Senior Debt, or provision shall be made for such payment in money
or money's worth before the Holders of the Securities are entitled to receive
any payment by the Company on account of the principal of or any premium or
interest on the Securities or on account of the purchase or other acquisition of
Securities; provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with Article Twelve by
delivering and crediting pursuant to Section 1202 Securities which have been
acquired (upon redemption or otherwise) prior to such declaration of
acceleration or which have been converted pursuant to Article Fourteen.

  In the event that, notwithstanding the foregoing, the Company shall make any
payment to the Trustee or the Holder of any Security prohibited by the foregoing
provisions of this Section, and if such fact shall, at or prior to the time of
such payment, have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment shall be paid over and delivered
forthwith to the Company.

  The provisions of this Section shall not apply to any payment with respect
to which Section 1502 would be applicable.

Section 1504. No Payment When Senior Debt in Default.

  (a) In the event and during the continuation of any default in the payment
of principal of or any premium or interest on any Senior Debt during or beyond
any applicable grace period with respect thereto, or in the event that any
default with respect to any Senior Debt shall have occurred and be continuing
permitting the holders of such Senior Debt (or a trustee on behalf of the
holders thereof) to declare such Senior Debt due and payable prior to the date
on which it would otherwise have become due and payable, unless and until such
default shall have been cured or waived or shall have ceased to exist and, if
any such Senior Debt shall have been accelerated, such acceleration shall have
been rescinded or annulled, or (b) in the event any judicial proceeding shall be
pending with respect to any such default, then no payment shall be made by the
Company on account of principal of or any premium or interest on the

                                      -76-
<PAGE>
Securities or on account of the purchase or other acquisition of Securities;
provided, however, that nothing in this Section shall prevent the satisfaction
of any sinking fund payment in accordance with Article Twelve by delivering and
crediting pursuant to Section 1202 Securities which have been acquired (upon
redemption or otherwise) prior to such declaration of acceleration or which have
been converted pursuant to Article Fourteen.

  In the event that, notwithstanding the foregoing, the Company shall make any
payment to the Trustee or the Holder of any Security prohibited by the foregoing
provisions of this Section, and if such fact shall, at or prior to the time of
such payment, have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment shall be paid over and delivered
forthwith to the Company.

  The provisions of this Section shall not apply to any payment with respect
to which Section 1502 would be applicable.

Section 1505. Payment Permitted If No Default.

  Nothing contained in this Article or elsewhere in this Indenture or in any
of the Securities shall prevent (a) the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
debt restructuring, assignment for the benefit of creditors or other marshalling
of assets and liabilities of the Company referred to in Section 1502 or under
the conditions described in Section 1503 or 1504, from making payments at any
time of principal of and any premium or interest on the Securities, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of and any premium or interest on the
Securities or the retention of such payment by the Holders, if, at the time of
such application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article.

Section 1506. Subrogation to Rights of Holders of Senior Debt.

  Subject to the payment in full of all Senior Debt, the Holders of the
Securities shall be subrogated to the rights of the holders of such Senior Debt
to receive payments and distributions of cash, property and securities
applicable to the Senior Debt until the principal of and any premium and
interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of
any cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Debt by Holders of the Securities or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Debt and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt.

                                      -77-
<PAGE>
Section 1507. Provisions Solely to Define Relative Rights.

  The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (a) impair, as among the Company, its creditors other than holders of
Senior Debt and the Holders of the Securities, the obligation of the Company,
which is absolute and unconditional (and which, subject to the rights under this
Article of the holders of Senior Debt, is intended to rank equally with all
other general obligations of the Company), to pay to the Holders of the
Securities the principal of and any premium and interest on the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior Debt;
or (c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.

Section 1508. Trustee to Effectuate Subordination.

  Each Holder of a Security by its acceptance thereof authorizes and directs
the Trustee on its behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee its attorney-in-fact for any and all such purposes.

Section 1509. No Waiver of Subordination Provisions.

  No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any non-compliance
by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.

  Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Debt, or otherwise
amend or supplement in any manner Senior Debt or any instrument evidencing the
same or any agreement under which Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise dispose of any property pledged, mortgaged or
otherwise securing

                   -78-
<PAGE>
Senior Debt; (iii) release any Person liable in any manner for the collection of
Senior Debt; and (iv) exercise or refrain from exercising any rights against the
Company and any other Person.

Section 1510. Notice to Trustee.

  The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee therefor; and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Section 601, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of and any premium
or interest on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by it
within two Business Days prior to such date.

  Subject to the provisions of Section 601, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Debt (or a trustee therefor) to establish that such
notice has been given by a holder of Senior Debt (or a trustee therefor). In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Debt held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article, and
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.

Section 1511. Reliance on Judicial Order or Certificate of Liquidating Agent.

  Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 601, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a

                                      -79-
<PAGE>
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Debt and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.

Section 1512. Trustee Not Fiduciary for Holders of Senior Debt.

  The Trustee, in its capacity as trustee under this Indenture, shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be
liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article or otherwise.

Section 1513. Rights of Trustee as Holder of Senior Debt;
        Preservation of Trustee's Rights.

  The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Debt which may at any time
be held by it, to the same extent as any other holder of Senior Debt, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.

  Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.

Section 1514. Article Applicable to Paying Agents.

  In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee; provided, however, that
Section 1513 shall not apply to the Company or any Affiliate of the Company if
it or such Affiliate acts as Paying Agent.

Section 1515. Certain Conversions Deemed Payment.

  For the purposes of this Article only, (1) the issuance and delivery of
junior securities upon conversion of Securities in accordance with Article
Fourteen shall not be deemed to constitute a payment or distribution on account
of the principal of or any premium or interest on Securities or on account of
the purchase or other acquisition of

                                      -80-
<PAGE>
Securities, and (2) the payment, issuance or delivery of cash, property or
securities (other than junior securities) upon conversion of a Security shall be
deemed to constitute payment on account of the principal of such Security. For
the purposes of this Section, the term "junior securities" means (a) shares of
any stock of any class of the Company and (b) securities of the Company which
are subordinated in right of payment to all Senior Debt which 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 Securities are so subordinated as
provided in this Article.

Section 1516. Obligations of Company and Right to Convert Unconditional.

  Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Debt and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of and any premium and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or affect the relative rights of the Holders of the Securities and
creditors of the Company other than the holders of Senior Debt, nor shall
anything herein or therein prevent the Trustee or the Holder of any Securities
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.

                                      -81-
<PAGE>
    Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Debt and the Holders of the Securities, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article Fourteen.

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

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

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

                           FOREST CITY ENTERPRISES, INC.

                       By.......................................................

                         .......................................................

                       By.......................................................

                                      -82-
<PAGE>
STATE OF NEW YORK       )
                        )  ss.:
COUNTY OF NEW YORK      )

    On the .... day of ..........., 20__ before me personally came
............................, to me known, who, being by me duly sworn, did
depose and say that he is ................... of....................., one
of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and
that he signed his name thereto by like authority.

                                 ...............................................

STATE OF NEW YORK       )
                        )  ss.:
COUNTY OF NEW YORK      )

    On the .... day of ..........., 20__, before me personally came
............................, to me known, who, being by me duly sworn, did
depose and say that he is ................... of....................., one
of the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name
thereto by like authority.

                                 ...............................................

                                      -83-
<PAGE>
                                TABLE OF CONTENTS
                                   ----------

                                                               PAGE
                                                               ----
PARTIES........................................................  1
RECITALS OF THE COMPANY........................................  1

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101. Definitions:
             Act...............................................  2
             Affiliate; control................................  2
             Authenticating Agent..............................  2
             Board of Directors................................  2
             Board Resolution..................................  2
             Business Day......................................  2
             Commission........................................  2
             Common Stock......................................  2
             Company...........................................  3
             Company Request...................................  3
             Company Order.....................................  3
             Corporate Trust Office............................  3
             corporation.......................................  3
             Covenant Defeasance...............................  3
             Debt..............................................  3
             Defaulted Interest................................  3
             Defeasance........................................  3
             Depositary........................................  3
             Event of Default..................................  3
             Exchange Act......................................  3
             Expiration Date...................................  3
             Global Security...................................  3
             Holder............................................  4
             Indenture.........................................  4
             interest..........................................  4
             Interest Payment Date.............................  4
             Investment Company Act............................  4
             Lien..............................................  4
             Material Subsidiary...............................  4
             Maturity..........................................  4
             Notice of Default.................................  4
             Officers' Certificate.............................  4
------------
NOTE: This table of contents shall not,for any purpose, be deemed to be a part
of the Indenture.

                                       -i-
<PAGE>
                                                               PAGE
                                                               ----

             Opinion of Counsel................................  4
             Original Issue Discount Security..................  4
             Outstanding.......................................  5
             Paying Agent......................................  6
             Person............................................  6
             Place of Payment..................................  6
             Predecessor Security..............................  6
             Redemption Date...................................  6
             Redemption Price..................................  6
             Regular Record Date...............................  6
             Securities........................................  6
             Securities Act....................................  6
             Security Register and Security Registrar..........  6
             Senior Debt.......................................  6
             Special Record Date...............................  6
             Stated Maturity...................................  6
             Subsidiary........................................  7
             Trust Indenture Act...............................  7
             Trustee...........................................  7
             U.S. Government Obligation........................  7
             Vice President....................................  7
Section 102. Compliance Certificates and Opinions .............  7
Section 103. Form of Documents Delivered to Trustee ...........  8
Section 104. Acts of Holders; Record Dates ....................  8
Section 105. Notices, Etc., to Trustee and Company ............ 11
Section 106. Notice to Holders; Waiver ........................ 11
Section 107. Conflict with Trust Indenture Act ................ 11
Section 108. Effect of Headings and Table of Contents ......... 12
Section 109. Successors and Assigns ........................... 12
Section 110. Separability Clause .............................. 12
Section 111. Benefits of Indenture ............................ 12
Section 112. Governing Law .................................... 12
Section 113. Legal Holidays ................................... 12

                                   ARTICLE TWO

                                 SECURITY FORMS

Section 201. Forms Generally .................................. 13
Section 202. Form of Face of Security ......................... 13
Section 203. Form of Reverse of Security ...................... 15

                                      -ii-
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                                                               PAGE
                                                               ----

Section 204. Form of Legend for Global Securities ............. 20
Section 205. Form of Trustee's Certificate of Authentication .. 21
Section 206. Form of Conversion Notice ........................ 21

                                  ARTICLE THREE

                                 THE SECURITIES

Section 301. Amount Unlimited; Issuable in Series ............. 22
Section 302. Denominations .................................... 25
Section 303. Execution, Authentication, Delivery and Dating ... 26
Section 304. Temporary Securities ............................. 27
Section 305. Registration; Registration of Transfer and
             Exchange ......................................... 27
Section 306. Mutilated, Destroyed, Lost and Stolen Securities . 29
Section 307. Payment of Interest; Interest Rights Preserved ... 30
Section 308. Persons Deemed Owners ............................ 31
Section 309. Cancellation ..................................... 31
Section 310. Computation of Interest .......................... 32
Section 311. CUSIP Numbers .................................... 32

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture .......... 32
Section 402. Application of Trust Money ....................... 33

                                  ARTICLE FIVE

                                    REMEDIES

Section 501. Events of Default ................................ 33
Section 502. Acceleration of Maturity; Rescission and Annulment 35
Section 503. Collection of Indebtedness and Suits for
                   Enforcement by Trustee...................... 36
Section 504. Trustee May File Proofs of Claim ................. 37
Section 505. Trustee May Enforce Claims Without Possession
                   of Securities............................... 38
Section 506. Application of Money Collected ................... 38
Section 507. Limitation on Suits .............................. 38

                                      -iii-
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                                                               PAGE
                                                               ----

Section 508. Unconditional Right of Holders to Receive Principal,
                Premium and Interest and to Convert.............. 39
Section 509. Restoration of Rights and Remedies ................. 39
Section 510. Rights and Remedies Cumulative ..................... 39
Section 511. Delay or Omission Not Waiver ....................... 40
Section 512. Control by Holders ................................. 40
Section 513. Waiver of Past Defaults ............................ 40
Section 514. Undertaking for Costs .............................. 41
Section 515. Waiver of Usury, Stay or Extension Laws ............ 41

                                   ARTICLE SIX

                                   THE TRUSTEE

Section 601. Certain Duties and Responsibilities ................ 41
Section 602. Notice of Defaults ................................. 42
Section 603. Certain Rights of Trustee .......................... 42
Section 604. Not Responsible for Recitals or Issuance of
                    Securities .................................. 43
Section 605. May Hold Securities and Act as Trustee
                    Under Other Indentures....................... 43
Section 606. Money Held in Trust ................................ 43
Section 607. Compensation and Reimbursement ..................... 44
Section 608. Conflicting Interests .............................. 44
Section 609. Corporate Trustee Required; Eligibility ............ 44
Section 610. Resignation and Removal; Appointment of Successor .. 45
Section 611. Acceptance of Appointment by Successor ............. 46
Section 612. Merger, Conversion, Consolidation or Succession
                   to Business................................... 47
Section 613. Preferential Collection of Claims Against Company .. 48
Section 614. Appointment of Authenticating Agent ................ 48

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

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

                                      -iv-
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                                                               PAGE
                                                               ----

Section 704. Reports by Company ............................... 51

                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

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

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures Without Consent of Holders 52
Section 902. Supplemental Indentures with Consent of Holders .. 54
Section 903. Execution of Supplemental Indentures ............. 55
Section 904. Effect of Supplemental Indentures ................ 55
Section 905. Conformity with Trust Indenture Act .............. 55
Section 906. Reference in Securities to Supplemental Indentures 56
Section 907. Subordination Unimpaired ......................... 56
Section 908. Consents or Waivers .............................. 56

                                   ARTICLE TEN

                                    COVENANTS

Section 1001. Payment of Principal, Premium and Interest ...... 56
Section 1002. Maintenance of Office or Agency ................. 56
Section 1003. Money for Securities Payments to Be Held in Trust 57
Section 1004. Statement by Officers as to Default ............. 58
Section 1005. Existence ....................................... 58
Section 1006. Maintenance of Properties ....................... 58
Section 1007. Payment of Taxes and Other Claims ............... 59
Section 1008. Waiver of Certain Covenants ..................... 59

                                       -v-
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                                                               PAGE
                                                               ----

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

Section 1101. Applicability of Article ........................ 59
Section 1102. Election to Redeem; Notice to Trustee ........... 60
Section 1103. Selection by Trustee of Securities to Be Redeemed 60
Section 1104. Notice of Redemption ............................ 61
Section 1105. Deposit of Redemption Price ..................... 62
Section 1106. Securities Payable on Redemption Date ........... 62
Section 1107. Securities Redeemed in Part ..................... 62

                                 ARTICLE TWELVE

                                  SINKING FUNDS

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

                                ARTICLE THIRTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

Section 1301. Company's Option to Effect Defeasance or
                   Covenant Defeasance......................... 64
Section 1302. Defeasance and Discharge ........................ 64
Section 1303. Covenant Defeasance ............................. 65
Section 1304. Conditions to Defeasance or Covenant Defeasance . 65
Section 1305. Deposited Money and U.S. Government Obligations
                   to be Held in Trust; Miscellaneous
                   Provisions ................................. 67
Section 1306. Reinstatement ................................... 68

                                      -vi-
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                                                               PAGE
                                                               ----

                                ARTICLE FOURTEEN

                            CONVERSION OF SECURITIES

Section 1401.  Applicability of Article ........................ 69
Section 1402.  Exercise of Conversion Privilege ................ 69
Section 1403.  No Fractional Shares ............................ 70
Section 1404.  Adjustment of Conversion Price .................. 71
Section 1405.  Notice of Certain Corporate Actions ............. 71
Section 1406.  Reservation of Shares of Common Stock ........... 72
Section 1407.  Payment of Certain Taxes Upon Conversion ........ 72
Section 1408.  Nonassessability ................................ 72
Section 1409.  Effect of Consolidation or Merger on
                    Conversion Privilege........................ 73
Section 1410.  Duties of Trustee Regarding Conversion .......... 74
Section 1411.  Repayment of Certain Funds Upon Conversion ...... 74

                                 ARTICLE FIFTEEN

                           SUBORDINATION OF SECURITIES

Section 1501.  Securities Subordinate to Senior Debt............ 74
Section 1502.  Payment Over of Proceeds Upon Dissolution, Etc .. 75
Section 1503.  Prior Payment to Senior Debt Upon Acceleration of
                     Securities................................. 76
Section 1504.  No Payment When Senior Debt in Default .......... 76
Section 1505.  Payment Permitted If No Default.................. 77
Section 1506.  Subrogation to Rights of Holders of Senior Debt . 77
Section 1507.  Provisions Solely to Define Relative Rights ..... 78
Section 1508.  Trustee to Effectuate Subordination.............. 78
Section 1509.  No Waiver of Subordination Provisions............ 78
Section 1510.  Notice to Trustee................................ 79
Section 1511.  Reliance on Judicial Order or Certificate of
                     Liquidating Agent.......................... 79
Section 1512.  Trustee Not Fiduciary for Holders of Senior Debt  80
Section 1513.  Rights of Trustee as Holder of Senior Debt;
                     Preservation of Trustee's Rights........... 80
Section 1514.  Article Applicable to Paying Agents.............. 80
Section 1515.  Certain Conversions Deemed Payment............... 80
Section 1516.  Obligations of Company and Right to Convert
                     Unconditional.............................. 81

                                      -vii-
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                                                               ----

TESTIMONIUM.................................................... 82
SIGNATURES..................................................... 82
ACKNOWLEDGEMENTS............................................... 83

                                     -viii-Exhibit 10.1

EXECUTION VERSION

PLAN SUPPORT AGREEMENT

               This
PLAN SUPPORT AGREEMENT (including the Term Sheet (as defined below), this “Agreement”),
dated as of April 23, 2009, is entered into by and among (i) U.S. Shipping
Partners L.P. (“USSP”), U.S. Shipping Finance Corp., U.S. Shipping
Operating LLC, USS Chartering LLC, USS ATB 1 LLC, USS ATB 2 LLC, USS ATB 3 LLC,
USS ATB 4 LLC, USS M/V Houston LLC, ITB Mobile LLC, USCS Chemical Pioneer Inc.,
ITB Groton LLC, ITB New York LLC, ITB Jacksonville LLC, ITB Baltimore LLC, USCS
ATB LLC, USCS Sea Venture LLC, ITB Philadelphia LLC, USCS Chemical Chartering
LLC, USCS Charleston Chartering LLC, USCS Charleston LLC, USS JV Manager Inc.,
USS Product Manager LLC, USS PC Holding Corp., US Shipping General Partner LLC
(“USSGP”), and USS Product Carriers LLC (the “U.S. Shipping Entities”),
(ii) the undersigned lenders party to the First Lien Credit Agreement (as
defined herein) (each, a “Senior Secured Lender” and collectively, the “Senior
Secured Lenders”), and (iii) the undersigned holders of Second Lien Notes
(as defined herein) (each, a “Second Lien Noteholder” and collectively,
the “Second Lien Noteholders” and, together with the Senior Secured
Lenders, each a “Secured Party” and collectively, the “Secured
Parties”). The U.S. Shipping Entities, the Secured Parties and any
subsequent person that becomes a party hereto in accordance with the terms
hereof are referred to herein as the “Parties.”

RECITALS

               WHEREAS,
USSP, U.S. Shipping Operating LLC, ITB Baltimore LLC, ITB Groton LLC, ITB
Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC, USS
Chartering LLC, USCS Chemical Chartering LLC, USCS Chemical Pioneer Inc., USCS
Charleston Chartering LLC, USCS Charleston LLC, USCS ATB LLC, USS ATB 1 LLC,
USS ATB 2 LLC, USCS Sea Venture LLC, USS M/V Houston LLC, U.S. Shipping Finance
Corp., USS Product Manager LLC, USS JV Manager Inc., USS PC Holding Corp., USS
ATB 3 LLC and USS ATB 4 LLC have entered into that certain Third Amended and
Restated Credit Agreement, dated as of August 7, 2006 (as amended and modified
from time to time, the “First Lien Credit Agreement”), as borrowers or
guarantors, providing for $350 million in senior revolving and term loan credit
facilities (the “Senior Credit Facilities”), with Canadian Imperial Bank
of Commerce as administrative agent, KeyBank National Association, as
collateral agent (in such capacity and in the capacity of escrow agent,
together with its affiliates in the capacity of securities intermediary and
their respective successors and assigns in such capacities, the “Collateral
Agent”) and the lenders, issuing banks and other agents party thereto;

               WHEREAS,
as of the Exchange Date (as defined herein), the Senior Secured Lenders hold at
least 60% of the aggregate principal amount outstanding of the Senior Credit
Facilities (the holders of at least 60% in amount, the “Requisite Lenders”);

               WHEREAS,
USSP and U.S. Shipping Finance Corp. are the issuers of $100 million aggregate
principal amount outstanding of 13% Second Lien Notes (the “Second Lien
Notes”), maturing August 15, 2014 and issued pursuant to that certain
indenture dated August 7, 2006 (the “Second Lien Indenture”), which
Second Lien Notes are guaranteed by each of the U.S. Shipping Entities other
than USSP, U.S. Shipping Finance Corp., USSGP, USS Product Carriers LLC and USS
Vessel Management LLC;

               WHEREAS,
as of the Exchange Date (as defined herein), the Second Lien Noteholders hold
at least 60% of the aggregate principal amount outstanding of the Senior
Secured Notes (the holders of at least 60% in amount, the “Requisite
Noteholders”);

               WHEREAS,
the U.S. Shipping Entities and the Secured Parties wish to reorganize and
recapitalize the U.S. Shipping Entities (the “Transactions”) in
accordance with a proposed pre-arranged chapter 11 plan of reorganization (the
“Plan”), whose material terms and conditions are set forth in the term
sheet attached hereto as Exhibit “A” (the “Term Sheet”);

               WHEREAS,
the U.S. Shipping Entities intend to file petitions (the “Chapter 11
Petitions”) commencing voluntary reorganization cases (the “Chapter 11
Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy
Code”) in the United States Bankruptcy Court for the Southern District of
New York (the “Bankruptcy Court”);

               WHEREAS,
the U.S. Shipping Entities intend to file the Plan and related disclosure
statement (the “Disclosure Statement”) concurrently with the filing of
the Chapter 11 Petitions, or as soon as practicable thereafter, and to seek
Bankruptcy Court approval of the Disclosure Statement; and

               WHEREAS,
the U.S. Shipping Entities intend to use their commercially reasonable efforts
to obtain Bankruptcy Court approval of the Plan in accordance with the
Bankruptcy Code and on terms consistent with this Agreement and each Secured
Party intends to use commercially reasonable efforts to cooperate in that
regard.

               NOW,
THEREFORE, in consideration of the premises and mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

          1.
Term Sheet; Plan. The material terms and conditions of the Transactions
and the Plan are set forth in the Term Sheet. The Plan shall be in form and substance
reasonably satisfactory in all respects to the Steering Committee and embody
the terms contained in, and, in all material respects be consistent with this
Agreement. For the purposes of this Agreement, (i) “Steering Committee”
means the steering committee comprised of up to three representatives of the
Senior Secured Lenders (the “Senior Representatives”) and one
representative of the Second Lien Noteholders (the “Second Lien
Representative”), and (ii) “Acceptable Plan” shall mean the Plan,
including all exhibits thereto, as the same may be amended or supplemented from
time to time following the Exchange Date (as defined herein) by written
approval of USSP and the Steering Committee, in consultation with the Secured
Parties.1 Each Senior Secured Lender acknowledges and agrees that prior to the Exchange
Date (as defined herein) the names of the proposed Senior Representatives have
been disclosed to it and delivery of such Senior Secured Lender’s signature
page to this Agreement constitutes approval of the appointment of such proposed
Senior Representatives to the Steering Committee. Each Second Lien Noteholder  

	
 

	
 

	 

	
 

1 Where consultation with the Secured
Parties is required as to a confidential matter, only private side Senior
Secured Lenders/restricted Second Lien Noteholders will be consulted. 

acknowledges and agrees that
prior to the Exchange Date (as defined herein) the names of the proposed Second
Lien Representative has been disclosed to it and delivery of such Second Lien
Noteholder’s signature page to this Agreement constitutes approval of the
appointment of such proposed Second Lien Representative to the Steering
Committee. Notice of all relevant matters will be given to all Steering
Committee members but, in the event of disagreement, the Steering Committee
shall act by majority vote of the persons present at any meeting of the
Steering Committee; provided, that at least three members of the Steering
Committee must be present at any meeting in order for valid action to be taken
by the Steering Committee; and, provided, further, that in the event of a tie
vote, the Senior Representative serving as chair of the Steering Committee (the
“Steering Committee Chair”) shall have the tie breaking vote. If a
member of the Steering Committee sells (in one or more transactions) a majority
of its position it shall resign as a member of the Steering Committee. If there
is a resignation the slot shall be filled by a majority-in-interest vote of the
Senior Secured Lenders (in the case of a Senior Representative) and by
majority-in-interest of the Second Lien Noteholders (in the case of the Second
Lien Representative). 

          2.
Bankruptcy Process. The
U.S. Shipping Entities hereby agree that, no later than three business days
after the Exchange Date (as defined herein), the U.S. Shipping Entities will
file with the Bankruptcy Court the Chapter 11 Petitions and all other documents
necessary to commence the Chapter 11 Cases (the date on which such filing
occurs the “Filing Date”). On the Filing Date, or as soon as practicable
thereafter, the U.S. Shipping Entities will file with the Bankruptcy Court the
Disclosure Statement and the Acceptable Plan.

          3.
Confirmation of the
Acceptable Plan. Each of the
U.S. Shipping Entities shall use their commercially reasonable efforts to
obtain confirmation of the Acceptable Plan as soon as reasonably practicable
following the commencement of the Chapter 11 Cases in accordance with the
Bankruptcy Code, and in any event within 120 days of the Filing Date, and on
terms consistent with this Agreement, and each Secured Party shall cooperate in
that regard; provided, however, that upon notice from either the
U.S. Shipping Entities or the Steering Committee to the other Parties hereto
there shall be a 30-day extension of such 120-day period; provided, further,
following such 30-day extension, USSP and the Steering Committee may from time
to time agree to further extend the period within which the U.S. Shipping
Entities shall obtain confirmation of the Acceptable Plan by such number of
days as is mutually agreed to by USSP and the Steering Committee. Each of the
U.S. Shipping Entities and each Secured Party shall take all reasonable
necessary and appropriate actions to achieve confirmation of the Acceptable
Plan.

          4.
Support of the Reorganization; Additional Covenants.

          (a)
Prior to the Termination Date (as defined below), no Secured Party will
(i) object to confirmation of the Acceptable Plan or object to, or
otherwise commence any proceeding to oppose or alter, the Acceptable Plan, the Disclosure Statement, motions
filed in connection therewith, or customary “first day” motions, or any other
documents or agreements to be executed or implemented in connection with the
Acceptable Plan and the consummation of the Transactions, each of which
documents and agreements shall be consistent in all material respects with this
Agreement (collectively, the “Restructuring Documents”), (ii) vote for, consent to, support or
participate in the formulation of any 

plan
of reorganization other than the Acceptable Plan,
(iii) directly or indirectly seek, solicit, support or encourage any plan other
than the Acceptable Plan, or any
sale, proposal or offer of dissolution, winding up, liquidation, merger,
reorganization or restructuring of the U.S. Shipping Entities that reasonably
could be expected to prevent, delay or impede the successful implementation of
the Transactions as contemplated by the Acceptable Plan and the Restructuring Documents, or
(iv) take any other action not required by law that is inconsistent with,
or that would materially delay, confirmation or consummation of, the Acceptable Plan; provided, however, without
limiting the provisions of Section 15 herein, none of the foregoing will limit
any Secured Party’s rights to participate in the Chapter 11 Cases in a manner
not inconsistent with the foregoing or with the provisions of clause (b) below,
including, without limitation, appearing as a party in interest in any matter
to be adjudicated in the Chapter 11 Cases.

          (b)
Prior to the Termination Date, each Secured Party (i) agrees to vote (or cause
the voting of) its claims arising from (as the case may be) the Senior Credit
Facilities (the “Senior Secured Claims”) or arising from the Second Lien
Indenture or in connection with the Second Lien Notes (the “Second Lien
Secured Claims” and, together with the Senior Secured Claims, the “Secured
Claims”), as applicable, to accept the Acceptable Plan (subject to its
receipt of the Disclosure Statement and other solicitation materials in respect
of the Plan that are approved by the Bankruptcy Court as containing “adequate
information” under section 1125 of the Bankruptcy Code), and will not change or
withdraw (or cause to be changed or withdrawn) such vote, (ii) consents to the treatment of the
Secured Claims as set forth in the Acceptable Plan, and (iii) shall not directly or indirectly
sell, assign, pledge, hypothecate, grant an option on, or otherwise dispose of
(each, a “transfer”) any of the Secured Claims held by such Secured Party on
the date such Secured Party executes this Agreement; provided, however,
that any Secured Party may transfer any of such Secured Claims (so long as such
transfer is not otherwise prohibited by any order of the Bankruptcy Court) to
an entity that agrees in writing, in the form attached hereto as Exhibit “B”
(the “Joinder”), to be bound by the terms of this Agreement. This
Agreement shall in no way be construed to preclude any Secured Party from
acquiring additional Secured Claims; provided, however, that,
subject to Section 26 herein, any such additional holdings shall automatically
be deemed to be subject to all of the terms of this Agreement. Subject to the
terms and conditions of any order of the Bankruptcy Court, each Secured Party
agrees to provide to the U.S. Shipping Entities’ counsel (i) a copy of any
Joinder and (ii) a notice of the acquisition of any additional Secured Claims,
in each case within five business days of the consummation of the transaction
disposing of, or acquiring, Secured Claims. 

          (c)
None of the U.S. Shipping Entities will move the Bankruptcy Court for a KERP or
file any other motion pertaining to employee benefits or compensation without
the consent of the Steering Committee.

          (d)
Except as expressly contemplated by this Agreement, none of the U.S. Shipping
Entities will engage in any transaction for which Bankruptcy Court approval is
required under Section 363 of the Bankruptcy Code without the consent of the
Steering Committee. 

          (e)
The U.S. Shipping Entities will present the Steering Committee with a list of
material executory contracts and will consult with the Steering Committee in
connection with the decision to assume or reject each such contract. 

          5.
The U.S. Shipping Entities’ Fiduciary Obligations.
Notwithstanding anything to the contrary contained herein:

          (a)
the U.S. Shipping Entities may, subject to an appropriate confidentiality
agreement, furnish or cause to be furnished information concerning the U.S.
Shipping Entities and their business, properties or assets to a party that
expresses a legitimate interest in, as well as the financial wherewithal to
consummate, a Business Combination (each a “Potential Acquiror”); provided,
however, that the Board (as hereinafter defined) has reached a business
judgment that the Potential Acquiror’s interest is bona fide and based on
adequate financial wherewithal; and, provided, further, however,
that the U.S. Shipping Entities shall promptly notify the Steering Committee of
any expressions of interest, letters of intent, or any proposals received by a
Potential Acquiror with respect to a Business Combination. For purposes hereof,
“Business Combination” means any merger, consolidation or combination to
which U.S. Shipping Entities is a party, any proposed sale, distribution, split
or other disposition of capital stock or other equity interest of U.S. Shipping
Entities or any proposed sale, dividend or other disposition of all or
substantially all of the assets and properties of the U.S. Shipping Entities;

          (b)
following receipt of a proposal or offer for a Business Combination from a
Potential Acquiror, the U.S. Shipping Entities may negotiate and discuss such
proposal or offer with the Potential Acquiror; 

          (c)
following receipt of a proposal or offer for a Business Combination from a
Potential Acquiror, the U.S. Shipping Entities may disclose the terms and
conditions of such proposal or offer to the Secured Parties and, if applicable,
to the Bankruptcy Court, and

          (d)
following receipt of a proposal or offer for a Business Combination from a
Potential Acquiror, the U.S. Shipping Entities may immediately terminate their
obligations under this Agreement by written notice to the Steering Committee;

but in each case referred to
in the foregoing clauses (a) through (d) only to the extent that:

               (i)
if an offer or proposal from a Potential Acquiror is received prior to the
commencement of the Chapter 11 Cases, USSP and the board of directors of USSGP
(the “Board”) conclude in good faith that (A) the Potential Acquiror is
proposing or offering a Business Combination that USSP and the Board determine
is reasonably likely, if negotiated to finality and consummated, to be more
favorable to the U.S. Shipping Entities, their creditors and the holders of
equity securities of USSP than the Acceptable Plan, and (B) such action is
necessary or appropriate in order for the Board to comply with its fiduciary
obligations to the USSP’s creditors and equity holders under applicable law;
and

2

               (ii)
if an offer or proposal from a Potential Acquiror is received after Filing
Date, the Company shall request such relief from the Bankruptcy Court as the
Board deems appropriate to comply with its fiduciary obligations to USSP’s
creditors and equity holders under applicable law, and the U.S. Shipping
Entities may disclose any such offer or proposal to the Bankruptcy Court in any
and all circumstances.

          6.
Termination of Agreement. This Agreement shall terminate, unless waived
by USSP and the Steering Committee in consultation with the Secured Parties, upon
the earliest to occur of the following (the date and time of such termination,
the “Termination Date”):

          (a)
at 5:00 P.M. prevailing Eastern Time on the
date which is three business days after the Exchange Date (as defined herein)
if the U.S. Shipping Entities shall not have made the filings set forth in
Section 2 on or before such time;

          (b)
at 5:00 P.M. prevailing Eastern Time on the
75th day after the Filing Date if a hearing has not been held before the
Bankruptcy Court on or before such date to consider the approval of the
Disclosure Statement; provided, however, that upon notice
from either the U.S. Shipping Entities or the Steering Committee to the other
Parties hereto there shall be a 30-day
extension of such 75-day period;

          (c)
at 5:00 P.M. prevailing Eastern Time on the
120th day after the Filing Date if the Disclosure Statement has not been
approved and the Acceptable Plan has
not been confirmed by the Bankruptcy Court on or before such date; provided,
however, that upon notice from either the U.S. Shipping Entities
or the Steering Committee to the other Parties hereto there shall be a 30-day extension of such 120-day period;

          (d)
at 5:00 P.M. prevailing Eastern Time on
October 1, 2009 if there has not occurred substantial consummation (as defined
in Section 1101 of the Bankruptcy Code) of the Acceptable Plan on or before such date; provided, however,
that upon notice from either the U.S. Shipping Entities or the Steering
Committee to the other Parties hereto there
shall be an extension of such date until November 2, 2009;

          (e)
the Chapter 11 Cases are dismissed or converted to cases under Chapter 7 of the
Bankruptcy Code;

          (f)
the U.S. Shipping Entities file, propose or otherwise support any plan of
reorganization other than the Acceptable Plan;

          (g)
the material breach by any of the U.S. Shipping Entities of any of the
undertakings, representations, warranties or covenants of the U.S. Shipping
Entities set forth in this Agreement, which material breach remains uncured for
a period of five business days after the receipt of written notice of such
breach from the Steering Committee;

3

          (h)
the U.S. Shipping Entities file any motion or pleading with the Bankruptcy
Court that is not consistent in any material respect with this Agreement or the
Acceptable Plan (in each case with such amendments and modifications as have
been agreed to by USSP and the Steering Committee) and such motion or pleading
has not been withdrawn prior to the earlier of (i) five business days after the
U.S. Shipping Entities receive written notice from the Steering Committee that
such motion or pleading is inconsistent with this Agreement or the Acceptable
Plan, as applicable, and (ii) the entry of an order of the Bankruptcy Court
approving such motion; provided, that this Section 6(h) shall not apply
with respect to any motion or pleading that is inconsistent with this Agreement
if such motion or pleading is consistent with the Acceptable Plan;

          (i)
subject to the execution of an appropriate and otherwise reasonable
confidentiality agreement by any Secured Party not already subject to
appropriate confidentiality arrangements, the failure by any of the U.S.
Shipping Entities to provide to the Secured Parties and their advisors
reasonable access to the books and records of the U.S. Shipping Entities and
the management and advisors of the U.S. Shipping Entities for the purposes of
evaluating the U.S. Shipping Entities’ business plans and participating in the
process with respect to the consummation of the Transactions;

          (j)
the Bankruptcy Court grants relief that is inconsistent with this Agreement or
the Acceptable Plan in any material respect (in each case with such amendments
and modifications as have been agreed to by USSP and the Steering Committee); provided,
that this Section 6(j) shall not apply with respect to any relief that is
inconsistent with this Agreement if such relief is consistent with the
Acceptable Plan; or

          (k)
the issuance by any governmental authority, including the Bankruptcy Court or
any other regulatory authority or court of competent jurisdiction, of any
ruling or order enjoining the consummation of a material portion of the
Transactions,

provided, however, any of the dates set forth
in this Section 6 may be extended by agreement among USSP and the Steering
Committee in consultation with the Secured Parties. Upon termination of this
Agreement, no Party shall have any continuing liability or obligation to any
other Party hereunder; provided, however, that no such
termination shall relieve any Party from liability for its breach or
non-performance of its obligations hereunder prior to the date of such
termination. Upon the occurrence of the Termination Date due to the breach by
any of the U.S. Shipping Entities under this Agreement, the fee and expense
reimbursements (including the fees and expenses of the advisors referred to in
Section 10 herein) required by the section of the Term Sheet titled “Secured
Claims” shall be payable for work through the Termination Date. 

          7.
Representations and Warranties. Each of the Parties represents and
warrants to each of the other Parties that the following statements are true,
correct and complete as of the date such Party executes this Agreement: 

          (a)
Power and Authority. It has all requisite power and authority to enter
into this Agreement and to carry out the transactions contemplated by, and
perform its respective obligations under, this Agreement.

          (b)
Authorization. The execution and delivery of this Agreement and the
performance of its obligations hereunder have been duly authorized by all
necessary action on its part.

4

          (c)
Binding Obligation. This Agreement is the legally valid and binding
obligation of it, enforceable against it in accordance with its terms.

          (d)
No Conflicts. The execution, delivery and performance by it of this
Agreement does not and shall not (i) violate
any provision of law, rule or regulation applicable to it or its certificate of
incorporation or by-laws (or other organizational document) or (ii) conflict with, result in a breach
of, or constitute (with due notice or lapse of time or both) a default under,
any material contractual obligation to which it is a party or under its
certificate of incorporation or by-laws (or other organizational documents).

          (e)
Governmental Consents. The execution, delivery and performance by it of
this Agreement does not and shall not require any registration or filing with,
consent or approval of, or notice to, or other action to, with or by, any
Federal, state or other governmental authority or regulatory body other than
the Bankruptcy Court and pursuant to the Securities Exchange Act of 1934, as
amended, assuming, as to the U.S. Shipping Entities, the accuracy of the
representations and warranties herein of each Secured Party.

          8.
Additional Representation of Senior Secured Lenders. Each Senior Secured
Lender represents and warrants as to itself only, severally and not jointly
with any other Senior Secured Lender, to each of the other Parties hereto that,
as of the date such Party executes this Agreement, (i) such Senior Secured
Lender either (A) is the sole legal and beneficial owner of the aggregate principal
amount of Senior Secured
Claims set forth on its signature page, in
each case free and clear of all claims, liens, and encumbrances, other than
ordinary course pledges and/or swaps, or (B) has investment or voting
discretion with respect to discretionary accounts for the holders or beneficial
owners of the aggregate principal amount of Senior Secured Claims set forth on
its signature page and the related Senior Secured Claims and has the power and authority to bind the
beneficial owner(s) of such Senior Secured Claims to the terms of this
Agreement and (ii) such Senior Secured Lender has full power and authority to
vote on and consent to all matters concerning such Senior Secured Claims and to
exchange, assign, and transfer such Senior Secured Claims.

          9.
Additional Representation of Second Lien Noteholders. Each Second Lien
Noteholder represents and warrants as to itself only, severally and not jointly
with any other Second Lien Noteholder, to each of the other Parties hereto
that, as of the date such party executes this Agreement, (i) such Second Lien
Noteholder either (A) is the sole legal and beneficial owner of the Second Lien
Notes set forth on its
signature page and all related Second Lien
Secured Claims, in each case free and clear of all claims, liens, and
encumbrances, other than ordinary course pledges and/or swaps, or (B) has
investment or voting discretion with respect to the Second Lien Notes set forth
on its signature page and the related
Second Lien Secured Claims and has the power and authority to bind the
beneficial owner(s) of such Second Lien Notes and Second Lien Secured Claims to
the terms of this Agreement and (ii) such Second Lien Noteholder has full power
and authority to vote on and consent to all matters concerning such Second Lien
Notes and Second Lien Secured Claims and to exchange, assign, and transfer such
Second Lien Notes and Second Lien Secured Claims.

5

          10.
Advisors to Certain
Secured Parties. The U.S. Shipping Entities shall pay the
reasonable fees and expenses of (i)
Pillsbury Winthrop Shaw Pittman LLP (“Pillsbury”) for services
rendered to the Senior Secured Lender serving as Steering Committee Chair
(including for services rendered to such Senior Secured Lender before it was
appointed as Steering Committee Chair),
(ii) Mayer Brown LLP, for services rendered to the Collateral Agent and
as proposed counsel to the Senior Secured Lenders in connection with the
documentation of the New Term Loan (as defined in the Term Sheet)(including the
reasonable fees and expenses of local counsel and/or special maritime counsel),
and (iii) Bracewell & Giuliani LLP (“Bracewell”) for services
rendered to the Second Lien Noteholder serving as Second Lien Representative
(including for services rendered to such Second Lien Noteholder before it was
appointed as Second Lien Representative) and to the trustee under the Second
Lien Indenture (the “Indenture Trustee”) (including, within Bracewell’s
reimbursement, the reasonable fees and expenses of Blank Rome LLP, as special
maritime counsel to the Second Lien Noteholder serving as Second Lien
Representative), in each case in connection with the prepetition discussions
and the Chapter 11 Cases and regardless of whether the transactions are
consummated, as well as in accordance with the Term Sheet or as otherwise
agreed by USSP and the Steering Committee. In furtherance of the foregoing, the
U.S. Shipping Entities shall, immediately following the Exchange Date, provide
by wire transfer to each of Pillsbury and Bracewell the sum of $200,000 to be
applied to invoiced fees and expenses incurred through the Exchange Date and
with the remaining balance thereof for each such firm to be retained as a fee
reserve in respect of (but not as a cap of) invoiced fees and expenses incurred
after the Exchange Date to the extent payable in accordance with this Agreement
and/or the Term Sheet, with any such amount in excess of the invoiced fees and
expenses being returned to the U.S. Shipping Entities upon the Termination
Date. 

          11.
Obligation to Disclose
Materials. The Secured
Parties hereby acknowledge and agree that USSP shall disclose to the public (i)
promptly following the occurrence of the Exchange Date (as defined herein), a
summary of the terms of this Agreement (including the Term Sheet but not
including identification of the individual signing Secured Parties or the
members of the Steering Committee except to the extent that the name of such
Secured Party is otherwise set forth in this Agreement, not including the
signature pages hereto) and (ii) no later than the opening of the market on the
day following the Filing Date in connection with the public disclosure of the
filing of the Chapter 11 Cases, this Agreement (including the Term Sheet but
not including identification of the individual signing Secured Parties or the
members of the Steering Committee) with such redactions as may be reasonably
requested by Pillsbury or Bracewell to maintain the confidentiality of the
items identified in Section 12 hereof. USSP will submit to Pillsbury and
Bracewell, as counsel to the Steering Committee Chair and the Second Lien
Representative, respectively, a draft of the form of disclosure pursuant to the
immediately preceding sentence and afford Pillsbury and Bracewell, as counsel
to the Steering Committee Chair and the Second Lien Representative,
respectively, a reasonable opportunity, but in no event less than one business
day, to review and provide suggestions as to such proposed disclosure and USSP
shall consider such suggestions in good faith. In the event that USSP fails to
make the foregoing disclosure prior to the opening of the market on the day
following the Filing Date, any of the Secured Parties may publicly disclose
this Agreement, including the Term Sheet (subject to any redactions required
hereby). The U.S. Shipping Entities hereby release each Secured Party and its
advisors and professionals from any claims by or on behalf of the U.S. Shipping
Entities against any of the Secured Parties arising as a result of such
disclosure by any Secured Party in compliance with this Agreement.

6

          12.
Publicity. The U.S. Shipping Entities will submit to
each of Pillsbury and Bracewell, as counsel to the Steering Committee Chair and
the Second Lien Representative, respectively, all press releases and public
documents that constitute the initial disclosure of the existence or terms of
this Agreement or any amendment to the terms of this Agreement for review and
potential suggestions on the same basis as in 11 herein. Except as required by
law (as determined by outside counsel to the U.S. Shipping Entities and with
reasonable prior notice to each of Pillsbury and Bracewell, as counsel to the
Steering Committee Chair and the Second Lien Representative, respectively), the
U.S. Shipping Entities shall not (a) use the name of any Secured Party in any
public manner without such Secured Party’s prior written consent (except to the
extent that the name of such Secured Party is otherwise set forth in this
Agreement, including the Term Sheet, not including the signature pages hereto)
or (b) disclose to any person (including, for the avoidance of doubt, any other
Secured Party) other than counsel and advisors to the U.S. Shipping Entities,
the principal amount, or percentage of, Secured Claims or any other equity or
debt securities or interests of the U.S. Shipping Entities held by any Secured
Party; provided, however, that the U.S. Shipping Entities shall be permitted to
disclose at any time the aggregate principal amount of and aggregate percentage
of Secured Claims held by the Senior Secured Lenders as a group and by the
Second Lien Noteholders as a group.

          13.
Review of Documents. Each of the U.S. Shipping Entities shall,
except where it is not reasonably practicable, provide draft copies of all
motions or applications and other documents any of the U.S. Shipping Entities
intend to file with the Bankruptcy Court to each of Pillsbury and Bracewell, as
counsel to the Steering Committee Chair and the Second Lien Representative,
respectively, at least two business days prior to the date when the U.S.
Shipping Entities intend to file any such document, and shall consult in good
faith with such counsel regarding the form and substance of any such proposed
filing with the Bankruptcy Court. 

          14.
Sale of ITB New York. 

          (a)
ITB New York LLC has informed the Secured Parties that it desires to sell the
vessel “ITB New York” and retain the proceeds of such disposition for use in
the business of the U.S. Shipping Entities.

          (b)
For all purposes under the Loan Documents, including without limitation for the
purposes of Section 7.2.11 of the First Lien Credit Agreement, each of the
Senior Secured Lenders hereby consents to the disposition by ITB New York LLC
of the vessel “ITB New York” and acknowledge and agrees that (a) such sale
shall not constitute a breach of, or default under, any provision of any Loan
Document or any other document, agreement or instrument related to the
foregoing documents, and (b) the U.S. Shipping Entities shall retain the
proceeds of such disposition for use in the business of the U.S. Shipping
Entities. For the purposes of this Agreement, “Loan Document” shall have
the meaning given to such term in the First Lien Credit Agreement. The
administrative agent and collateral agent under the Loan Documents and the
Indenture Trustee and the collateral agent under the Collateral Documents (as
defined in the Second Lien Indenture) shall each be entitled to rely on this
Section 14 as constituting such consent and direction; provided, however,
that the Collateral Agent shall not execute or deliver any release of any Liens
on the ITB New York unless and until the Administrative Agent has delivered to
the Collateral Agent a written directive to do so and certifies that the requisite
number of “Secured Parties” under the First Lien Credit Agreement have
consented to such disposition or that such disposition is otherwise
specifically permitted under the First Lien Credit Agreement.

7

          (c)
The Senior Secured Lenders hereby release any and all liens and encumbrances
created pursuant to the Loan Documents or any other document, agreement or
instrument related to the Loan Documents over the ITB New York or the proceeds
from the disposition of the ITB New York and agree to execute such other
documents and instruments as may be prepared by the U.S. Shipping Entities and
take such other actions that are reasonably required to effect the foregoing
release. 

          (d)
Prior to the Termination Date and notwithstanding anything in the Loan
Documents, to the contrary, no Secured
Party will object to, or otherwise commence
any proceeding to oppose, the motions, applications and other documents
filed with the Bankruptcy Court in connection with the disposition of the ITB
New York and retention of the proceeds thereof by the U.S. Shipping Entities; provided,
for the avoidance of doubt, Section 13 herein shall apply with respect to such
motions, applications and other documents.

          15.
No Waiver of
Participation and Reservation of Rights. Except as expressly provided in this Agreement, nothing herein is
intended to, or does, in any manner waive, limit, impair, or restrict any right
of any Secured Party or the ability of any Secured Party to protect and
preserve its rights, remedies and interests, including without limitation, its
claims against the U.S. Shipping Entities. If the transactions contemplated by
this Agreement are not consummated, or if this Agreement is terminated in
accordance with Sections 5 or 6 herein, the U.S. Shipping Entities fully
reserve any and all of their rights. 

          16.
Specific Performance. Each Party recognizes and acknowledges that there
would be no adequate monetary or other remedy at law for any damages that
accrue to any other Party by reason of its breach of any covenants or
agreements contained in this Agreement, and therefore each Party agrees that
(i) in the event of any such breach by any Secured Party, the U.S. Shipping
Entities shall be entitled to the remedy of specific performance of such
covenants and agreements and injunctive and other equitable relief, and (ii) in
the event of any such breach by the U.S. Shipping Entities, the Secured Parties
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief if such relief is sought
by either the Senior Secured Lenders or the Second Lien Noteholders. Any Party
against whom an action or proceeding for specific performance is brought hereby
waives the claim or defense therein that such Party bringing such action or
proceeding has an adequate remedy at law, and such person shall not urge in any
such action or proceeding the claim or defense that such remedy at law exists.
Any Party entitled to the remedy of specific performance and injunctive and
other equitable relief pursuant to this Section 16 shall be entitled to obtain
such specific performance, injunctive or equitable relief without the necessity
of securing or posting a bond or other security in connection with such remedy,
in addition to any other remedy to which such Party may be entitled, at law or
in equity.

8

          17.
Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any right, power
or remedy thereof by any Party shall not preclude the simultaneous or later
exercise of any other such right, power or remedy by such Party.

          18.
Effectiveness; Amendments. 

          (a)
This Agreement shall become effective and binding on each Party upon the
execution, and receipt by USSP, of signature pages signed by the U.S. Shipping
Entities, the Requisite Lenders and the Requisite Noteholders by facsimile
transmission or e-mail (the date of such exchange of signature pages, the “Exchange
Date”) 

          (b)
This Agreement and the Plan may not be modified, amended or supplemented except
in a writing signed by USSP and the Steering Committee in consultation with the Secured Parties; provided,
however, that (i) no modification, amendment or supplement that is
materially adverse to the economic interests of the Senior Secured Lenders as a
whole or Second Lien Noteholders as a whole shall be binding unless agreed to in
a writing signed by a majority in amount of the Senior Secured Lenders or a
majority in amount of the Second Lien Noteholders, as the case may be, (ii) any
amendment, modification or supplement that is materially adverse to the
economic interests of an individual Senior Secured Lender, without similarly
affecting the rights hereunder of all Senior Secured Lenders, shall not be
effective as to such Senior Secured Lender without its prior written consent,
and (iii) any amendment, modification or supplement that is materially adverse
to the economic interests of an individual Second Lien Noteholder, without
similarly affecting the rights hereunder of all Second Lien Noteholders, shall
not be effective as to such Senior Secured Lender without its prior written
consent.

          19.
Waivers. The failure of any Party to exercise any right, power or remedy
provided under this Agreement or otherwise available in respect hereof at law
or in equity, or to insist upon compliance by any other Party with its
obligations hereunder, and any custom or practice of the Parties at variance
with the terms hereof, shall not constitute a waiver by such Party of its right
to exercise any such or other right, power or remedy or to demand such
compliance. No charge of
waiver, modification, consent or acquiescence with respect to any provision of
this Agreement may be made against (i) any of the U.S. Shipping Entities,
except on the basis of a written instrument executed by or on behalf of USSP,
or (ii) the Secured Parties, except on the basis of a written instrument
executed by or on behalf of the Steering Committee in consultation with the
Secured Parties. 

          20.
Governing Law; Jurisdiction. This Agreement shall be governed by,
and construed in accordance with, the internal laws of the State of New York,
without regard to any conflicts of law provision that would require the
application of the law of any other jurisdiction. By its execution and delivery
of this Agreement, subject to the U.S. Shipping Entities’ filing of the Chapter
11 Petitions in accordance with Section 2 hereto, each of the Parties hereby
irrevocably and unconditionally submits to the non-exclusive jurisdiction of
the Bankruptcy Court for purposes of any action, suit or proceeding arising out
of or relating to this Agreement or any of the transactions contemplated
hereby. Each Party irrevocably waives, to the fullest extent permitted by
applicable laws, jury trial and any objection it may have now or hereafter to
the venue of any action, suit or proceeding brought in such court or to the
convenience of the forum.

9

          21.
Notices. All demands, notices, requests, consents and
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) personally delivered by courier service or messenger, (ii)
sent by facsimile and acknowledged by the recipient, (iii) if duly deposited in
the mails, by certified or registered mail, postage prepaid-return receipt
requested, or (iv) sent by e-mail and acknowledged by the recipient, to the
following addresses, or such other addresses as may be furnished hereafter by
notice in writing, to the following Parties: 

	
 

	
 

	
 

	
If to the
  U.S. Shipping Entities to: 

	
 

	
 

	
 

	
399 Thornall
  St

	
 

	
8th Floor

	
 

	
Edison, NJ
  08837

	
 

	
Facsimile
  No.: (732) 635 1918

	
 

	
Attn: Ronald
  L. O’Kelley

	
 

	
rokelley@usslp.com
  

	
 

	
 

	
 

	
with a copy
  to:

	
 

	
 

	
 

	
Weil,
  Gotshal & Manges LLP

	
 

	
700
  Louisiana Street, Suite 1600

	
 

	
Houston,
  Texas 77002 

	
 

	
Facsimile
  No.: (713) 224 9511

	
 

	
Attn:
  Alfredo Perez and Robert Jordan

	
 

	
alfredo.perez@weil.com
  

	
 

	
robert.jordan@weil.com

	
 

	
 

	
 

	
and

	
 

	
 

	
 

	
Fulbright
  & Jaworski L.L.P.

	
 

	
666 Fifth
  Avenue

	
 

	
New York, NY
  10103

	
 

	
Facsimile
  No.: (212) 318 3400

	
 

	
Attn: Roy L.
  Goldman

	
 

	
rgoldman@fulbright.com
  

	
 

	
 

	
 

	
If to a
  Senior Secured Lender, to:

	
 

	
 

	
 

	
such Secured
  Lender at the address shown for such Secured Lender on the applicable signature
  page hereto, to the attention of the person who has signed this Agreement on
  behalf of such Secured Lender

10

	
 

	
 

	
 

	
with a copy
  to:

	
 

	
 

	
 

	
Pillsbury
  Winthrop Shaw Pittman LLP

	
 

	
1540
  Broadway

	
 

	
New York, NY
  10036

	
 

	
Facsimile
  No.: (212) 858 1500

	
 

	
Attn: Leo
  Crowley

	
 

	
leo.crowley@pillsburylaw.com
  

	
 

	
 

	
 

	
If to a
  Second Lien Noteholder, to:

	
 

	
 

	
 

	
such Secured
  Party at the address shown for such Secured Party on the applicable signature
  page hereto, to the attention of the person who has signed this Agreement on
  behalf of such Secured Party 

	
 

	
 

	
 

	
with a copy
  to:

	
 

	
 

	
 

	
Bracewell
  & Giuliani LLP

	
 

	
225 Asylum
  Street 

	
 

	
Suite 2600 

	
 

	
Hartford,
  Connecticut, 06103-1516

	
 

	
Facsimile
  No.: (860) 760 6310

	
 

	
Attn: Evan
  Flaschen

	
 

	
evan.flaschen@bgllp.com
  

	
 

	
 

	
 

	
If to the Senior
  Representatives, to each Senior Representative at the address notified by
  such Senior Representative to the other Parties hereto, to the attention of
  the person nominated by such Senior Representative

	
 

	
 

	
 

	
with a copy
  to:

	
 

	
 

	
 

	
Pillsbury
  Winthrop Shaw Pittman LLP

	
 

	
1540
  Broadway

	
 

	
New York, NY
  10036

	
 

	
Facsimile
  No.: (212) 858 1500

	
 

	
Attn: Leo
  Crowley

	
 

	
leo.crowley@pillsburylaw.com

	
 

	
 

	
 

	
If to the
  Second Lien Representative, at the address notified by such Second Lien
  Representative to the other Parties hereto, to the attention of the person
  nominated by such Second Lien Representative

11

	
 

	
 

	
 

	
with a copy
  to:

	
 

	
 

	
 

	
Bracewell
  & Giuliani LLP

	
 

	
225 Asylum
  Street 

	
 

	
Suite 2600 

	
 

	
Hartford,
  Connecticut, 06103-1516

	
 

	
Facsimile
  No.: (860) 760-6310

	
 

	
Attn: Evan Flaschen

	
 

	
evan.flaschen@bgllp.com
  

	
 

	
 

	
 

	
If to the
  Collateral Agent, to the address shown for the Collateral Agent on the
  applicable page of the First Lien Credit Agreement 

	
 

	
 

	
 

	
With a copy
  to:

	
 

	
 

	
 

	
Mayer Brown
  LLP

	
 

	
700
  Louisiana Street

	
 

	
Suite 3400

	
 

	
Houston,
  Texas 77002

	
 

	
Facsimile
  No.: (713) 238-4613

	
 

	
Attn:
  Margaret Davis

	
 

	
mndavis@mayerbrown.com

          22. Representation
by Counsel. Each Party acknowledges that it has had the opportunity to be
represented by counsel in connection with this Agreement and the transactions
contemplated by this Agreement. Accordingly, any rule of law or any legal
decision that would provide any Party with a defense to the enforcement of the
terms of this Agreement against such Party based upon lack of legal counsel, shall
have no application and is expressly waived.

          23. Consideration.
It is hereby acknowledged by the Parties
that, other than the agreements, covenants, representations and warranties of
the Parties, as more particularly set forth herein, no consideration shall be
due or paid to any of the U.S. Shipping Entities for its agreement to file and
use its commercially reasonable efforts to obtain approval for the Plan and
Disclosure Statement in accordance with the terms and conditions of this Agreement.

          24. Headings.
The headings of the paragraphs and subparagraphs of this Agreement are inserted
for convenience only and shall not affect the interpretation hereof. 

          25. Successors
and Assigns. This Agreement is intended to bind and inure to the benefit of
the Parties and their respective permitted successors, assigns, heirs,
executors, administrators and representatives. 

12

          26.
Limitations. 

	
 

	
 

	
 

	
          (a)
  Notwithstanding anything herein to the contrary, this Agreement is intended
  only to bind Senior Secured Lenders and Second Lien Noteholders to the extent
  of the Secured Claims within their actual control or authority. By way of
  example, this Agreement is not intended to bind other groups, divisions,
  affiliates or funds related to a Senior Secured Lender or Second Lien
  Noteholder as to which such Senior Secured Lender or Second Lien Noteholder
  does not have the control or authority to provide votes or consents on behalf
  of such other group, division, affiliate or fund.

	
 

	
 

	
 

	
          (b) The
  Senior Representatives are acting in their own interests and Pillsbury is
  solely representing the Steering Committee Chair. Each Senior Secured Lender
  acknowledges that (i) the Senior Representatives are not their agents, (ii)
  Pillsbury is not its counsel, (iii) the interests of the Steering Committee
  Chair and Pillsbury as its counsel may not coincide with, and may conflict
  with, such Senior Secured Lender’s own interests, and (iv) nothing in this
  Agreement or the Plan, or in any action taken or not taken by the Steering
  Committee Chair, the other Senior Representatives or Pillsbury, shall create,
  provide for, give rise to or imply any fiduciary or other duty by the
  Steering Committee Chair, the other Senior Representatives or Pillsbury to
  such Senior Secured Lender (or to any other Party) or to any claim or cause
  of action by such Senior Secured Lender (or by any other Party) against the
  Steering Committee Chair, the other Senior Representatives or Pillsbury.

	
 

	
 

	
 

	
          (c)
  The Second Lien Representative is acting
  in its own interests and Bracewell is solely representing the Senior
  Representative and serving as special counsel to the Indenture Trustee. Each
  Second Lien Noteholder acknowledges that (i) the Second Lien Representative is
  not its agent, (ii) Bracewell is not its counsel, (iii) the interests of the
  Second Lien Representative and Bracewell as its counsel may not coincide
  with, and may conflict with, such Second Lien Noteholder’s own interests, and
  (iv) nothing in this Agreement or the Plan, or in any action taken or not
  taken by the Second Lien Representative or Bracewell, shall create, provide
  for, give rise to or imply any fiduciary or other duty by the Second Lien
  Representative or Bracewell to such Second Lien Noteholder (or to any other
  Party) or to any claim or cause of action by such Second Lien Noteholder (or
  by any other Party) against the Second Lien Representative or Bracewell.

          27.
Several, Not Joint, Obligations. The agreements, representations and obligations
of the Parties under this Agreement are, in all respects, several and not
joint.

          28.
Further Assurances. Subject to the other terms of this Agreement, the
Parties agree to execute and deliver such other instruments and perform such
acts, in addition to the matters herein specified, as may be reasonably
appropriate or necessary, from time to time, to effectuate the Acceptable Plan
and consummate the Transactions.

          29.
Complete Agreement. This Agreement is the entire agreement between the
Parties with respect to the subject matter hereof and supersedes all prior
agreements, oral or written, between the Parties with respect thereto, but shall not supersede the Plan. 

          30. Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original and all of which shall constitute one and the same
Agreement. Delivery of an executed signature page of this Agreement by facsimile or by email shall be as effective as delivery of
a manually executed signature page of this Agreement.

13

          31. No
Third-Party Beneficiaries. Unless expressly stated herein, this Agreement
shall be solely for the benefit of the Parties, and no other person or entity
shall be a third party beneficiary hereof.

          32. Severability.
Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.

          33.
Additional Parties. Without in any way limiting the provisions hereof,
additional lenders under the Senior Credit Facilities and additional holders of
Second Lien Notes may elect to become Parties by executing and delivering to the U.S. Shipping
Entities a Joinder. Such additional lender or holder of Second Lien Notes shall
become a Party to this Agreement as a Senior Secured Lender or Second Lien
Noteholder, respectively, in accordance with the terms of this Agreement.

          34. Acknowledgement
by Secured Parties. Each Secured Party acknowledges
and agrees that (i) it has conducted its own independent review and analysis of
this Agreement, (ii) it is not relying on any statement, presentation or
information made by or on behalf of the Senior Representatives, the Second Lien
Representative, Pillsbury, Bracewell, the Collateral Agent, Mayer Brown LLP, or
the Indenture Trustee in determining whether to execute this Agreement, and
(iii) none of the Senior Representatives, the Second Lien Representative,
Pillsbury, the Collateral Agent, Mayer Brown LLP, Bracewell, or the Indenture
Trustee will have or be subject to any liability to such Secured Party
resulting from the distribution to such Secured Party, or their use of, any
statement, presentation or information regarding this Agreement, the
transactions or the U.S. Shipping Entities by the Senior Representatives, the
Second Lien Representative, Pillsbury, the Collateral Agent, Mayer Brown LLP,
Bracewell, or the Indenture Trustee.

          35.
Cash Collateral Stipulation. Each Senior Secured Lender acknowledges and
agrees that the Debtors may use their cash, which cash is pledged as collateral
to the Senior Secured Lenders pursuant to the terms of certain of the Loan
Documents, to satisfy the Debtors’ working capital requirements during the
Chapter 11 Cases on the terms and conditions set forth in the Term Sheet,
including, without limitation, such terms and conditions with respect to
adequate protection. Such terms and conditions set forth in the Term Sheet
shall be memorialized in an order and stipulation (the “Cash Collateral
Stipulation”) submitted for approval by the Bankruptcy Court. The delivery
of a Senior Secured Lender’s signature page to this Agreement shall constitute
the consent of, and direction by, such Senior Secured Lender to the execution
of the Cash Collateral Stipulation by the Collateral Agent on behalf of the
Senior Secured Lenders containing customary terms consistent with the Term
Sheet as approved by the Senior Representatives; provided, however,
that the Collateral Agent shall not execute or deliver the Cash Collateral
Stipulation unless and until the Administrative Agent has delivered to the
Collateral Agent a written directive to do so and certifies that the requisite
number of “Secured Parties” under the First Lien Credit Agreement have
consented to such execution and delivery. Each Senior Secured Lender
acknowledges and agrees that (a) all rights and benefits of the Collateral
Agent under Article IX of the First Lien Credit Agreement and similar
provisions relating to the liabilities, damages, losses, acts and omissions of
the Collateral Agent set forth in 

14

the other Loan
Documents (which such rights and benefits shall survive any termination of this
Agreement) shall extend to any and all liabilities, obligations. losses,
damages, claims, costs or expenses imposed on, incurred by, or asserted against
the Collateral Agent in any way relating to or arising out of, and any and all
acts, activities and omissions of the Collateral Agent taken in connection
with, this Agreement, including any execution of the Cash Collateral
Stipulation and any releases of Liens or other documents and instruments
executed and delivered in connection with any disposition of the ITB New York
as described in Section 14, and (b) neither this Agreement, the effectuation of
the Acceptable Plan nor the consummation of the Transaction shall impose any
obligation on KeyBank National Association and its affiliates to serve as
Collateral Agent beyond May 20, 2009.

          36.
Third Party Beneficiary. The Parties acknowledge and agree that the
Collateral Agent is a third-party beneficiary of certain provisions under this
Agreement and shall be entitled as such to enforce, exercise or protect such
rights, interests and benefits provided hereunder, in all cases, to the fullest
extent permitted by applicable law. No waiver, modification, amendment or supplement
to this Agreement which may have a material
adverse effect with respect to the rights, interest or benefits granted to
the Collateral Agent hereunder shall be effective unless agreed to in a writing
signed by the Collateral Agent.

15

          IN WITNESS
WHEREOF, each of the Parties has caused this Agreement to be executed and
delivered by its duly authorized officer.

	
 

	
 

	
 

	
 

	
U.S.
  SHIPPING PARTNERS L.P.

	
 

	
By:

	
US Shipping
  General Partner LLC, its general partner

	
 

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
U.S.
  SHIPPING FINANCE CORP.

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
U.S.
  SHIPPING OPERATING LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USS
  CHARTERING LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USS ATB 1
  LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USS ATB 2
  LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USS ATB 3
  LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USS ATB 4
  LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USS M/V
  HOUSTON LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
ITB MOBILE
  LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USCS
  CHEMICAL PIONEER INC.

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
ITB GROTON
  LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
ITB NEW YORK
  LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
ITB
  JACKSONVILLE LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
ITB
  BALTIMORE LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USCS ATB LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USCS SEA
  VENTURE LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
ITB
  PHILADELPHIA LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USCS
  CHEMICAL CHARTERING LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USCS
  CHARLESTON CHARTERING LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USCS
  CHARLESTON LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USS JV
  MANAGER INC.

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USS PRODUCT
  MANAGER LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USS PC
  HOLDING CORP.

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
US SHIPPING
  GENERAL PARTNER LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USS PRODUCT
  CARRIERS LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
USS VESSEL
  MANAGEMENT LLC

	
 

	
 

	
 

	
By:

	
/s/ Ronald L. O’Kelley

	
 

	
 

	 

	
 

	
 

	
Name: Ronald L. O’Kelley

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

	
 

	
 

	
 

	
SENIOR SECURED LENDERS

	
 

	
[*]

	
 

	
 

	
By:

	
 

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
 

	
Title:

	
 

	
Principal amount of Senior Secured Claims held: 

	
 

	
$___________________

	
 

	
Date: _______________

	
 

	
[Address]

	
 

	
Attention: 

	
 

	
Fax: [*]

	
 

	
Email:

	
 

	
 

	
 

	
[*]

	
 

	
 

	
By:

	
 

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
 

	
Title:

	
 

	
Principal amount of Senior Secured Claims held: 

	
 

	
$___________________

	
 

	
Date: _______________

	
 

	
[Address]

	
 

	
Attention: 

	
 

	
Fax: [*]

	
 

	
Email:

	
 

	
 

	
 

	
 

	
[*]

	
 

	
 

	
By:

	
 

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
 

	
Title:

	
 

	
Principal amount of Senior Secured Claims held: 

	
 

	
$___________________

	
 

	
Date: _______________

	
 

	
[Address]

	
 

	
Attention: 

	
 

	
Fax: [*]

	
 

	
Email:

	
 

	
 

	
 

	
 

	
SECOND LIEN NOTEHOLDERS

	
 

	
[*]

	
 

	
 

	
By:

	
 

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
 

	
Title:

	
 

	
Principal amount of Second Lien Secured Claims held: 

	
 

	
$___________________

	
 

	
Date: _______________

	
 

	
[Address]

	
 

	
Attention: 

	
 

	
Fax: [*]

	
 

	
Email:

	
 

	
 

	
 

	
[*]

	
 

	
 

	
By:

	
 

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
 

	
Title:

	
 

	
Principal amount of Second Lien Secured Claims held: 

	
 

	
$___________________

	
 

	
Date: _______________

	
 

	
[Address]

	
 

	
Attention: 

	
 

	
Fax: [*]

	
 

	
Email:

	
 

	
 

	
 

	
 

	
[*]

	
 

	
 

	
By:

	
 

	
 

	
 

	 

	
 

	
 

	
Name: 

	
 

	
 

	
Title:

	
 

	
Principal amount of Second Lien Secured Claims held: 

	
 

	
$___________________

	
 

	
Date: _______________

	
 

	
[Address]

	
 

	
Attention: 

	
 

	
Fax: [*]

	
 

	
Email:

Exhibit
A

Term
Sheet

	
 

	 

	

U.S. Shipping Partners L.P.

	
 

	
REVISED PLAN TERM SHEET

	
 

	
As of April 22, 2009

	 

The following is a summary
(the “Plan Term Sheet”)
of certain material terms of a proposed plan of reorganization (the “Plan”) of the Company (as defined below),
USS Product Carriers LLC (“USSPC”)
and US Shipping General Partner, the general partner of USSP (“USSGP”), under
chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”).
This Plan Term Sheet does not contain all the terms, conditions, and other provisions
of the Plan and the transactions contemplated by this Plan Term Sheet are
subject to conditions to be set forth in definitive documents. This Plan Term
Sheet is proffered in the nature of a settlement proposal in furtherance of
settlement discussions and is entitled to protection from any use or disclosure
to any party or person pursuant to Federal Rule of Evidence 408 and any other
rule of similar import. This Plan Term Sheet and the information contained
herein are strictly confidential and contain material non-public information.
It is being provided to the (i) Senior Secured Lenders (as defined below) in
accordance with the confidentiality provisions of the First Lien Credit
Agreement (as defined below) and (ii) those Second Lien Noteholders (as defined
below) who have agreed to maintain the confidentiality hereof. This Plan Term
Sheet does not constitute an offer of securities, nor is it an offer or
solicitation for any chapter 11 plan, and is being presented for discussion and
settlement purposes only. 

It is anticipated that prior
to filing chapter 11 petitions, the Company will enter into a plan support
agreement (“Plan Support
Agreement”) with (i) Senior Secured Lenders comprising more than
one half in number of all Senior Secured Lenders and holding at least sixty
percent (60%) of the aggregate amount of the Senior Secured Claims (as defined
below) (the “Requisite
Senior Lenders”) and (ii) Second Lien Noteholders holding at
least sixty percent (60%) of the aggregate amount of the Second Lien Secured
Claims (as defined below) (the “Requisite Second Lien Noteholders”), pursuant to which
the signatories thereto will agree to support the Plan based on this Plan Term
Sheet, which shall be Exhibit “A” to such Plan Support Agreement. It is further
anticipated that the Plan Support Agreement will contain Milestones (as defined
below) for the Debtors’ chapter 11 cases filed in the Bankruptcy Court for the
Southern District of New York (the “Bankruptcy Court”).

	
 

	
 

	
I.

	
Parties

	
 

	
 

	
 

	
Debtors

	
 

	
U.S. Shipping Partners
L.P. (“USSP”),
and certain of its subsidiaries (collectively, the “Company”or the “Debtors”),
including, without
limitation, all Borrowers under the First Lien Credit Agreement and all
Issuers and Guarantors under the Second Lien Notes (as each term is defined
below), USSPC and USSGP.2 

	
 

	
 

	
 

	
 

	
 

	
 

	
The First
  Lien Credit Agreement

	
 

	
Third Amended and Restated
  Credit Agreement, dated as of August 7, 2006 (as amended, the “First Lien Credit Agreement”),
  among U.S. Shipping Partners L.P., U.S. Shipping Operating LLC, ITB Baltimore
  LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC,
  ITB Philadelphia LLC, USS Chartering LLC, USCS Chemical Chartering LLC, USCS
  Chemical Pioneer Inc., USCS Charleston Chartering LLC, USCS Charleston LLC, USCS
  ATB LLC, USS ATB 1 LLC, USS ATB 2 LLC, USCS Sea Venture LLC, USS M/V Houston
  LLC, U.S. Shipping Finance Corp., USS Product Manager LLC, USS JV Manager
  Inc., and USS PC Holding Corp., as borrowers (collectively, the “Borrowers”), USS
  ATB 3 LLC and USS ATB 4 LLC as guarantors, Canadian Imperial Bank of
  Commerce, as Administrative Agent (the “Administrative Agent”) and Letter of Credit
  Issuer, the collateral agent under the First Lien Credit Agreement (the “Collateral Agent”)
  and the lender parties thereto (collectively, the “Senior Secured Lenders”)
  and any and all of the documents, notes, instruments and other agreements
  (including, without limitation, each of the Loan Documents (as defined in the
  First Lien Credit Agreement) and the ISDA Master Agreements), executed,
  delivered or filed pursuant to or in connection with the aforementioned Third
  Amended and Restated Credit Agreement, as such Third Amended and Restated
  Credit Agreement, documents, notes and other agreements and instruments
  (including the Loan Documents and the ISDA Master Agreement) may have been
  amended, supplemented, modified or allonged.

	
 

	
 

	
 

	
Second
  Lien 13% Senior Secured Notes due 2014

	
 

	
Second Lien 13% Senior
  Secured Notes due 2014 (the “Second Lien Notes”) issued pursuant to that certain Indenture,
  dated as of August 7, 2006 (the “Second Lien Indenture”) among USSP and U.S.
  Shipping Finance Corp., as issuers (the “Issuers”), U.S. Shipping Operating LLC, USS
  ATB 1 LLC, USS ATB 2 LLC, USS Chartering LLC, USS M/V Houston LLC, USS
  Product Manager LLC, USS JV Manager Inc., ITB Baltimore LLC, ITB Groton LLC,
  ITB Jacksonville LLC, ITB Mobile LLC, ITB New York LLC, ITB Philadelphia LLC,
  USCS Chemical Pioneer Inc., USCS Chemical Chartering LLC, USCS Charleston
  Chartering LLC, USCS Charleston LLC, and USCS Sea Venture LLC, as guarantors
  (the “Guarantors”),
  and Wells Fargo Bank, N.A., as indenture trustee (the “Indenture Trustee”).

	
 

	
 

	 

	
 

	
2
In the event persons to whom USS Vessel Management LLC, a wholly-owned
subsidiary of USSGP that is funded directly by USSGP and indirectly by the
Company, has obligations based on prepetition agreements do not agree to
accept a settlement of such obligations less than or equivalent to what
unsecured creditors of the U.S. Shipping Entities are expected to receive pursuant
to the Plan, USS Vessel Management LLC shall be added as a debtor to the
Debtors’ chapter 11 cases filed in the Bankruptcy Court. 

	
 

	
 

	
II.

	
Proposed Restructuring

The Company will restructure
its debt and equity interests pursuant to the Plan as described below. Unless
otherwise indicated, all transactions will take place on the date the Plan
becomes effective (the “Effective
Date”). 

	
 

	
 

	
 

	
 

	
Corporate
and Capital Structure
of Reorganized Debtors3 

	
 

	
The proposed Plan
  contemplates a reorganization of the Company (the “Restructuring”) as
  a corporation under Delaware law that is compliant with sections 12103 and 50501 of title 46 of the United States Code and Part
4.80 of
  title 19 of the Code of Federal Regulations (collectively, the “U.S.
  Coastwise Trade Laws”).
  

Through the
  Plan, all existing partnership and other equity interests in USSP (the “USSP Prepetition Equity Interests”)
  shall be deemed cancelled and extinguished. New common stock, par value $.001
  per share (“New Common
  Stock”), and warrants to purchase New Common Stock (“Warrants”) shall be
  issued to the Senior Secured Lenders and holders of the Second Lien Notes
  (the “Second Lien
  Noteholders,”) in reorganized USSP (“Reorganized USSP”).
  

The debt incurred in connection with the
  First Lien Credit Agreement will be converted into a senior secured credit
  facility with a principal amount equal to the current outstanding principal
  amount of approximately $332.6 million (but for the avoidance of doubt,
  exclusive of any PIK interest) plus an amount equal to the termination
  obligation of the interest rate swaps (the “New Term Loan”), the terms of which
  are set forth below.

The Second Lien Notes will be converted
  into New Common Stock and Warrants as set forth below.

Through the Plan, USSGP will be merged with
  and into Reorganized USSP on the Effective Date, with Reorganized USSP being
  the surviving corporation.

	
 

	
 

	
 

	
 

	
Equity
  Ownership in Reorganized Debtors

	
 

	
The equity ownership of
  Reorganized USSP shall be held as follows:

	
 

	
 

	 

	
 

	
3
Reorganized Debtorsmeans
Reorganized USSP (as defined below), USS Chartering LLC, USCS Chemical
Pioneer Inc., USCS Charleston Chartering LLC, USCS Charleston LLC, USS
Product Manager LLC, USS JV Manager Inc., USS ATB 1 LLC, USS ATB 2 LLC, USS
ATB 3 LLC, USS M/V Houston LLC, ITB New York LLC, ITB Baltimore LLC, ITB
Mobile LLC, USCS ATB LLC, USCS Sea Venture LLC, ITB Philadelphia LLC, USCS
Chemical Chartering LLC and USS Product Carriers LLC on and after the
Effective Date (as defined below). 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
50% of the
  New Common Stock of Reorganized USSP (after giving effect to the exercise of
  all Warrants issued pursuant to this clause (a) and clause (b) below but
  before giving effect to the Management Equity Plan (as defined below)) shall
  be issued to the Senior Secured Lenders (the “Senior Secured Lenders’ Equity Share”).
  The Senior Secured Lenders’ Equity Share shall consist of shares of New
  Common Stock and Warrants and be issued on the Effective Date, subject to the
  following:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Each Senior
Secured Lender that is a U.S. Citizen (“Domestic Holder”) shall be issued shares of
New Common Stock in an amount equal to its pro rata share4of the Senior
Secured Lenders’ Equity Share; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Each Senior
Secured Lender who is not a U.S. Citizen for U.S. Coastwise Trade Laws
purposes5
(“Foreign Holder”)
shall be issued shares of New Common Stock and Warrants in an amount equal to
its pro rata share of the Senior Secured Lenders’ Equity Share, with each
Foreign Holder being allocated shares of New Common Stock and Warrants as
follows: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A)

	
a number of shares of New
  Common Stock equal to the product determined by multiplying (I) 11.5% of the
  total number of shares of New Common Stock to be outstanding on the Effective
  Date by (II) a fraction, (x) the numerator of which is the amount of such
  Foreign Holder’s Senior Secured Claim and (y) the denominator of which is the
  total amount of Senior Secured Claims held by all Foreign Holders; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B)

	
Warrants representing the
  number of shares of New Common Stock equal to such Foreign Holder’s pro rata
  share of the Senior Secured Lenders’ Equity Share less the number of shares
  of New Common Stock issued to such Foreign Holder pursuant to subclause (A)
  above.

	
 

	
 

	 

	
 

4 For purposes hereof, a Senior Secured Lender’s pro
rata share shall equal the percentage determined by dividing the amount of such
Senior Secured Lender’s Senior Secured Claim by the total of all Senior Secured
Claims. 

5 The term “U.S. Citizen” will hereinafter be used to
refer to U.S. Citizens for U.S. Coastwise Trade Laws purposes. 

6 For purposes hereof, a Second
Lien Noteholder’s pro rata share shall equal the percentage determined by
dividing the amount of such Second Lien Noteholder’s Second Lien Secured Claim
by the total of all Second Lien Secured Claims. 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
50% of the
  New Common Stock of Reorganized USSP (after giving effect to the exercise of
  all Warrants issued pursuant to clause (a) above and this clause (b) but
  before giving effect to the Management Equity Plan) shall be issued to the
  Second Lien Noteholders (the “Second Lien Noteholders’ Equity Share”).
  The Second Lien Noteholders’ Equity Share shall consist of shares of New
  Common Stock and Warrants and be issued on the Effective Date, subject to the
  following:

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Each Second
Lien Noteholder that is a Domestic Holder shall be issued shares of New
Common Stock in an amount equal to its pro rata share6 of the Second
Lien Noteholders’ Equity Share; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Each Second
  Lien Noteholder who is a Foreign Holder shall be issued shares of New Common
  Stock and Warrants in an amount equal to its pro rata share of the Second
  Lien Noteholders’ Equity Share, with each Foreign Holder being allocated
  shares of New Common Stock and Warrants as follows:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A)

	
a number of shares of New Common
  Stock equal to the product determined by multiplying (I) 11.5% of the total
  number of shares of New Common Stock to be outstanding on the Effective Date
  by (II) a fraction, (x) the numerator of which is the amount of such Foreign
  Holder’s Second Lien Secured Claim and (y) the denominator of which is the
  total amount of Second Lien Secured Claims held by all Foreign Holders; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B)

	
Warrants representing the
  number of shares of New Common Stock equal to such Foreign Holder’s pro rata
  share of the Second Lien Noteholders’ Equity Share less the number of shares
  of New Common Stock issued to such Foreign Holder pursuant to subclause (A)
  above.

	
 

	
In no event shall the
  Foreign Holders own more than 23% of the New Common Stock outstanding on the
  Effective Date.

	
 

	
 

	
 

	
 

	
 

	
 

	
The allocations noted in
  clauses (a) and (b) above shall be subject to dilution on account of the
  issuance of New Common Stock to the post-reorganization management pursuant
  to the Management Equity Plan, described in further detail below.

	
 

	
 

	
 

	
New Common Stock may be
  sold only to a U.S. Citizen.

	
 

	
 

	
 

	
New Common Stock and
  Warrants will be exempt from the registration requirements of the Securities
  Act upon issuance pursuant to section 1145 of the Bankruptcy Code and
  Reorganized USSP will not be subject to the reporting requirements of the
  Securities Exchange Act of 1934. Transfer of New Common Stock and Warrants
  shall not be registered and shall be subject to applicable securities laws
  regarding transfer.

	
 

	
 

	
 

	
Operation of
Post-Reorganization Business and Certain Limitations on Distributions With
Respect to New Common Stock 

	
 

	
Following confirmation and
  consummation of the Plan, the Reorganized Debtors shall continue to exist as
  separate corporate or limited liability company entities in accordance with
  the laws of their respective states of incorporation or formation and
  pursuant to their respective organizational documents in effect prior to the
  Effective Date, except to the extent such organizational documents are
  amended pursuant to the Plan. Such amendments to the organizational documents
  for each Debtor shall include, among other things, provisions, to the extent
  necessary or appropriate, effectuating the provisions of the Plan to assure
  that Reorganized USSP continues to be a U.S. Citizen, and such other
  provisions as may be agreed by the Debtors and a steering committee
  consisting of (i) up to three persons appointed by a majority-in-interest of
  the Requisite Senior Lenders (the “Senior Representatives”), and (ii) one
  person appointed by a majority-in-interest of the Requisite Second Lien
  Noteholders (the “Second
  Lien Representative” and, together with the Senior
  Representatives, the “Steering
  Committee”). The Steering Committee shall act by majority vote
  of the persons present at any meeting of the Steering Committee; provided
  that at least three members of the Steering Committee must be present at any
  meeting in order for valid action to be taken by the Steering Committee; and
  provided further that in the event of a tie vote, the chairman shall have the
  tie breaking vote. If a member of the Steering Committee sells a majority in
  amount of its position it shall resign as a member of the Steering Committee.
  If there be a resignation the slot shall be filled by a majority-in-interest
  of the Requisite Senior Lenders (in the case of a Senior Representative) and
  by majority-in-interest of the Requisite Second Lien Noteholders (in the case
  of the Second Lien Representative).

	
 

	
 

	
 

	
 

	
 

	
The charter
  and/or bylaws of Reorganized USSP or a stockholder agreement to be entered
  into by all material holders of New Common Stock shall (a) set forth certain
  restrictions relating to the transfer of shares of Reorganized USSP for Jones
  Act and securities law purposes, (b) regulate the membership of the new Board
  of Directors of Reorganized USSP (the “New Board”) and officers to such extent as
  will assure the preservation of Reorganized USSP’s status as a United States
  Citizen within the provisions of U.S. Coastwise Trade Laws, (c) limit the
  acquisition by any one person or group of persons acting in concert of
  beneficial ownership of more than thirty percent (30%) of the New Common
  Stock (subject to a pre-emergence grandfather clause) unless such person or
  group simultaneously offers to acquire all the outstanding New Common Stock
  and Warrants and (d) prohibit the distribution of dividends by Reorganized
  USSP (and certain other restricted payments) prior to the payment in full of
  the New Term Loan.

All New Board decisions on
  significant corporate events, including sale, acquisition or disposition of
  non-immaterial assets and initiating any initial public offering of
  Reorganized USSP will comply with Delaware law and require the approval of at
  least a majority of the non-management directors who are U.S. Citizens (a “Super Majority”). 

All organizational
  documents and stockholder agreements shall be in form and substance
  acceptable to the Steering Committee, whose consent shall not be unreasonably
  withheld.

The structure of the
  Reorganized Debtors shall be such that, at all times, the president, chief
  executive officer or chairman will be able to state in an Affidavit of U.S.
  Citizenship that by no means whatsoever is control of more than twenty-five
  percent (25%) of any equity interest in the Reorganized USSP given or
  permitted to be exercised by a person who is not a U.S. Citizen.

	
 

	
 

	
 

	
Equity
  Issuance 

	
 

	
Reorganized USSP may not
  issue and sell more than ten percent (10%) of the outstanding shares of New
  Common Stock of Reorganized USSP, including pursuant to a registration
  statement declared effective by the Securities and Exchange Commission
  without the consent of a majority-in-interest of the New Common Stock
  holders, which majority shall include a majority-in-interest of the Foreign
  Holders, whose consent shall not be unreasonably withheld; provided that such
  consent shall not be required for equity issued to cure a financial covenant
  default. Existing shareholders shall have pre-emptive rights with respect to
  issuances of New Common Stock, other than issuances (i) pursuant to a
  registration statement declared effective by the Securities and Exchange
  Commission and (ii) to effect an acquisition.

	
 

	
 

	
 

	
Warrants

	
The Warrants
  to be issued to Foreign Holders shall have the following terms:

	
 

	
 

	
 

	
(a)

	
the exercise
  price for the Warrants shall be equal to the par value of the shares of the
  common stock underlying the Warrant and may be paid in cash or pursuant to a
  cashless exercise procedure;

	
 

	
 

	
 

	
 

	
(b)

	
the Warrants
  shall expire on December 31, 2029;

	
 

	
 

	
 

	
 

	
(c)

	
the Warrants
  may be exercised only by an entity that is a U.S. Citizen;

	
 

	
 

	
 

	
 

	
(d)

	
the Warrants
  shall be freely transferable to any person, party or entity subject to
  applicable securities laws; and

	
 

	
 

	
 

	
 

	
(e)

	
the Warrants
  shall include antidilution protection in the event of stock dividend,
  recapitalization, stock split or reclassification of the common stock.

	
 

	
 

	
III.

	
Summary of Proposed Terms of New Term Loan

	
 

	
 

	
 

	
New Term
  Loan:

	
 

	
Term loan in an aggregate principal amount equal to the current outstanding principal amount of
approximately $332.6 million (but for the avoidance of doubt, exclusive of
any PIK interest) plus an amount equal to the termination obligation of the
interest rate swaps.7 

	
 

	
 

	
 

	
Borrower:

	
 

	
USSP (on or after the
  Effective Date), USS Chartering LLC, USCS Chemical Pioneer Inc., USCS
  Charleston Chartering LLC, USCS Charleston LLC, USS Product Manager LLC, USS
  JV Manager Inc., USS ATB 1 LLC, USS ATB 2 LLC, USS ATB 3 LLC, USS M/V Houston
  LLC, ITB New York LLC, ITB Baltimore LLC, ITB Mobile LLC, USCS ATB LLC, USCS
  Sea Venture LLC, ITB Philadelphia LLC, USCS Chemical Chartering LLC, USS
  Product Carriers LLC (collectively, the “Reorganized Debtors”).

	
 

	
 

	
 

	
Ratings:

	
 

	
The Company shall apply
  for and use its reasonable best efforts to obtain private letter ratings from
  Standard & Poors and Moody’s within two months following the Effective
  Date and use its reasonable best efforts to maintain them thereafter.

	
 

	
 

	 

	
 

	
 

	
7 The U.S.
Shipping Entities and the Senior Representatives, after consultation with the
First Lien Lenders, may elect to issue the New Term Loan in two or more
ranked tranches as long as (i) the annual amount of interest paid on all the
tranches is in aggregate at least equal to the annual amount of interest to
be paid if there is only one tranche with the interest rate set out above and
(ii) the other terms of the tranches are in all material respects identical. 

	
 

	
 

	
 

	
Lenders:

	
 

	
New Term
  Lenders.

	
 

	
 

	
 

	
Maturity:

	
 

	
The New Term
  Loan will mature on August 7, 2013 (the “Maturity Date”).

	
 

	
 

	
 

	
Interest Rate and Payment Dates:

	
 

	
Interest
  rate under the New Term Loan will be paid quarterly at a rate of, at the
  Reorganized Debtors’ option, (i) LIBOR plus five percent (5%), subject to a
  two percent (2%) LIBOR floor or (ii) ABR plus four percent (4%); provided
  that upon the occurrence and during the continuance of any event of default,
  interest shall only be at the ABR plus four percent (4%).

	
 

	
 

	
 

	
 

	
 

	
The US
  Shipping entities are considering purchasing one or more LIBOR caps on a
  portion of the New Term Loan and will do so if requested by the Requisite
  Senior Lenders and each such cap can be obtained on commercially reasonable
  terms.

	
 

	
 

	
 

	
Default Rate:

	
 

	
Upon the
  occurrence and during the continuance of any event of default (including,
  without limitation, in respect of letters of credit), interest shall be
  payable on demand at a default rate in an amount equal to two percent (2%)
  over the then applicable interest rate.

	
 

	
 

	
 

	
Amortization:

	
 

	
No
  amortization prior to the completion of the first full year following the
  Effective Date other than pursuant to the Excess Cash Sweep. Amortization of
  one quarter of one percent (0.25%) per quarter beginning on the last day of
  the first full fiscal quarter following completion of the first full fiscal
  year following the Effective Date. The balance of the New Term Loan shall be
  payable on the Maturity Date.

	
 

	
 

	
 

	
Excess Cash Sweep:

	
 

	
Cash flow
  sweep of one hundred percent (100%) of the Excess Cash Flow (as defined
  below), over and above (i) a $30 million cash balance for the first twelve
  (12) months after the Effective Date and (ii) a $20 million cash balance
  after the first twelve (12) months after the Effective Date (provided that
  such $20 million cash balance shall be reduced or increased (though never to
  exceed $20 million) by $2 million for each vessel (including joint venture
  vessels) that are removed or added to service following the Effective Date),
  to prepay the outstanding principal amount of the New Term Loan. “Excess Cash Flow”
  shall mean EBITDA in the previous quarter plus net proceeds (after deducting
  reasonable and customary costs of sale) from any vessel sales minus (i)
  interest and fee payments on the New Term Loan and letter of credit fees,
  (ii) any and all cash drydocking costs in previous quarter, budgeted cash
  drydocking costs for the next three quarters and all cash capital costs
  associated with the 4th ATB not funded from cash escrow, (iii)
  necessary and appropriate repair and maintenance costs to the extent such
  amounts are not already included in the determination of EBITDA, (iv) any
  cash taxes paid in such quarter, (v) scheduled amortization payments on the
  New Term Loan and (vi) any amounts used to repurchase New Term Loan Notes (as
  defined below) as provided in “Repurchase of New Term Loan Notes” below.

	
 

	
 

	
 

	
Repurchase of New Term Loan Notes:

	
 

	
The
  Reorganized Debtors shall be allowed to use up to 35% of Excess Cash Flow (as
  defined above but excluding clause (vi)) to repurchase New Term Loan Notes in
  the open market as long as (i) the purchase price is no more than 85% of the
  face amount of the New Term Loan Notes repurchased and (ii) such repurchase
  will not result in the rating agencies putting the Reorganized Debtors on
  “selective default”. Such repurchased notes are to be treated as permanently
  retired for all purposes including, but not limited to, interest payments,
  principal payments, and voting. Furthermore, any gain recorded on such
  repurchase is not to be included in any covenant calculation

	
 

	
 

	
 

	
Collateral:

	
 

	
The New Term
  Loan will be secured by all or substantially all of the Reorganized Debtors’
  assets (other than as to de minimis
  assets where it would not be cost-effective to do so).

	
 

	
 

	
 

	
Representations, Covenants, Events of Default, etc.:

	
 

	
All
  representations, covenants, events of default, voting requirements,
  indemnifications, assignment provisions and other terms and provisions of the
  loan agreement under which the New Term Loan is to be issued shall be
  consistent with the similar provisions in the First Lien Credit Agreement and
  otherwise in form and substance reasonably acceptable to the Senior
  Representatives, except that (i) there shall be no other indebtedness for
  borrowed money, whether or not secured, provided that indebtedness
  constituting a capital lease arising from a sale/leaseback transaction
  approved by the agent for the New Term Loan (such approval not to be
  unreasonably withheld) where the net proceeds of such transaction are used to
  prepay the New Term Loan shall not be considered indebtedness for borrowed
  money, and (ii) the only financial covenants shall be a four quarter rolling
  (A) interest coverage test (EBITDA/net interest) with a minimum ratio of one
  and a half times (1.5x) and (B) a debt to EBITDA coverage ratio to be
  determined (but consistent with the interest coverage test and the
  projections provided by USSP to the Senior Secured Lenders), which covenants
  shall only be measured beginning with the fourth full fiscal quarter
  following the Effective Date; provided that if the Reorganized Debtors are in
  default of either or both of these covenants, they shall be permitted to cure
  such default by issuing equity securities representing not more than 25% of
  the outstanding New Common Stock on a fully-diluted basis (calculated as if
  all outstanding Warrants had been exercised) after giving effect to such
  issuance and using the proceeds thereof to repay the New Term Loan in an
  amount such that after giving effect to such repayment as if it had occurred
  on the measurement date the Reorganized Debtors were in compliance with such
  financial covenant(s); and provided further that if the Reorganized Debtors
  rights to manage one or more of the vessels owned by the joint venture is
  terminated, the financial covenants shall be appropriately modified to
  reflect the loss of the EBITDA from such management fee.

	
 

	
 

	
 

	
 

	
 

	
Reorganized
  USSP shall be prohibited, without the prior consent of the Agent for the New
  Term Loan lenders, from making capital expenditures other than capital
  expenditures (i) for dry docks and UWILD inspections, (ii) as necessary to
  maintain all existing assets in a proper condition as required by law or
  customers or (iii) as set forth in a capital expenditures budget approved by
  the New Board and consented to by the Agent for the New Term Loan lenders,
  such consent not to be unreasonably withheld.

	
 

	
 

	
IV.

	
Treatment of Claims and Interests

	
 

	
 

	
 

	
 

	
•

	
Administrative Expense Claims

	
 

	
Except to
  the extent that a holder entitled to payment agrees to a less favorable
  treatment, or has been paid prior to the Effective Date, in whole or in part,
  on the latest of (i) the Effective Date, (ii) the date on which its claim
  becomes an allowed, or (iii) the date on which its claim becomes payable
  under any agreement relating thereto, or as soon as practicable thereafter,
  each holder of an allowed administrative expense claim shall receive, in full
  satisfaction, settlement, and release of and in exchange for such claim, cash
  equal to the unpaid portion of its claim without interest. Notwithstanding
  the forgoing, (a) any allowed administrative expense claim based on a
  liability incurred by the Debtors in the ordinary course of business by the
  Debtors shall be paid in full and performed by the Debtors or Reorganized
  Debtors, as the case may be, in the ordinary course of business in accordance
  with the terms and conditions of any agreements governing, instruments
  evidencing or other documents relating to such transactions, and (b) any
  allowed administrative expense claim may be paid on such other terms as may
  be agreed on between the holder of such Claim and the Debtors; provided, further, that if any such
  ordinary course expense is not billed or a request for payment is not made
  within ninety (90) days after the Effective Date, such ordinary course
  expense shall be barred.

	
 

	
 

	
 

	
 

	
•

	
Secured Tax and Priority Tax Claims

	
 

	
Except to
  the extent that a holder agrees to a different treatment or has been paid
  prior to the Effective Date, each holder of an allowed secured tax claim or
  priority tax claim shall, in full satisfaction, release, and discharge of
  such claim, receive at the Debtors’ option: (a) cash, paid in full,
  representing the full amount (without interest) of such holder’s unpaid claim
  on or as soon as reasonably practicable following the later to occur of (x)
  the Effective Date, and (y) the date on which such claim becomes allowed; or
  (b) receive such other terms determined by the Bankruptcy Court to provide
  the holder deferred cash payments having value, as of the Effective Date,
  equal to such claim. Upon payment and satisfaction in full of all allowed
  secured tax claims and priority tax claims, all liens and security interests
  granted to secure such obligations, whether in these chapter 11 cases or
  otherwise, shall be terminated and of no further force or effect.

	
 

	
 

	
 

	
 

	
•

	
Professional
Compensation and Reimbursement Claims 

	
 

	
All entities
  seeking awards by the Bankruptcy Court of compensation for services rendered
  or reimbursement of expenses incurred through and including the date on which
  the Plan is confirmed under sections 330, 331, 503(b)(2), 503(b)(3),
  503(b)(4) or 503(b)(5) of the Bankruptcy Code shall (a) file, on or before
  the date that is sixty (60) days after the Effective Date their respective
  applications for final allowances of compensation for professional services
  rendered and reimbursement of expenses incurred and (b) be paid in full
  without interest, in cash, in such amounts as are allowed by the Bankruptcy Court
  in accordance with the order relating to or allowing any such claim or upon
  such other terms as may be mutually agreed upon between the holder of such
  claim and the Debtors. The Reorganized Debtors are authorized to pay
  compensation for services rendered or reimbursement of expenses incurred
  after the date of confirmation of the Plan (the “Confirmation Date”) in the ordinary course of business and
  without the need for Bankruptcy Court approval.

	
 

	
 

	
 

	
 

	
 

	
•

	
Priority Non-Tax Claims

	
 

	
Except to
  the extent that a holder (i) has been paid by the Debtors, in whole or in
  part, prior to the Effective Date, or (ii) agrees to a less favorable
  treatment, each holder of an allowed priority non-tax claim shall receive, in
  full satisfaction of such claim, cash in the full amount of the claim
  (without interest), on or as soon as reasonably practicable after the later
  of (a) the Effective Date, or as soon thereafter as reasonably practicable,
  and (b) the date such claim becomes allowed.

	
 

	
 

	
 

	
 

	
Secured Claims

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
Allowed First Lien Secured Claims

	
 

	
Under the Plan, claims arising
  under the First Lien Credit Agreement (the “Senior Secured Claims”) shall be
  allowed, not subject to offset, defense, counterclaim, reduction or
  credit of any kind whatsoever, in an amount equal to the sum of (i) the
  aggregate principal amount outstanding under the First Lien Credit Agreement
  (approximately $332.6 million) as of the Commencement Date (as defined
  below), plus (ii) principal amounts drawn on the Letters of Credit from the
  Commencement Date through the Effective Date, plus (iii) an amount equal to
  the termination obligation in respect of ISDA Master Agreements governing
  certain interest rate swaps, plus (iv) accrued and unpaid letter of credit
  fees and administrative fees through the Commencement Date, plus (v) other
  unpaid amounts due under the First Lien Credit Agreement, including, without
  limitation, unpaid cash and PIK interest through and including the record
  date for voting on the Plan.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Senior Secured Lenders
  will receive in full, complete and final satisfaction of the Senior Secured
  Claims the following:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(f)

	
Secured term
  loan notes in connection with the New Term Loan (the “New Term Loan Notes”)
  in a principal amount equal to such holder’s pro rata share of the New Term
  Loan (the Senior Secured Lenders, in their capacity as the holders of the New
  Term Loan Notes, being referred to as the “New Term Lenders”);

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(g)

	
The Senior
  Secured Lenders will receive shares of New Common Stock and Warrants as set
  forth under “II. Proposed Restructuring—Equity Ownership” above; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(h)

	
The
  pre-petition letters of credit under the First Lien Credit Agreement that are
  outstanding as of the Effective Date shall be replaced and returned to the
  Administrative Agent as issuing bank, marked “canceled” or, to the extent
  Reorganized Debtors are unable to replace any of such letters of credit, such
  letter of credit shall be (a) secured by a back-to-back letter of credit
  issued by an institution acceptable to the Administrative Agent equal to 105%
  of the face amount of such letters of credit or (b) cash collateralized
  in an amount equal to 105% of the face amount of such letters of credit by
  the deposit of cash in such percentage amount in an account designated by the
  Administrative Agent, as issuing bank, which cash will be remitted to the
  Reorganized Debtors upon the expiration, cancellation or other termination or
  satisfaction of the reimbursement obligations in respect of such letters of
  credit.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Debtors
  shall pay in cash, without interest, the fees and the reasonable
  out-of-pocket expenses (including, without limitation, reasonable fees and
  expenses of attorneys and advisors) incurred by, and administration fees
  payable to, the Administrative Agent in their capacity as administrative
  agent under the First Lien Credit Agreement, in each case to the extent not
  reimbursed on or prior to the Effective Date, without the necessity of filing
  a fee application or any other application of any kind or nature with the
  Bankruptcy Court.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Debtors
  shall pay in cash, without interest, the fees and the reasonable
  out-of-pocket expenses (including, without limitation, reasonable fees and
  expenses of attorneys and advisors) incurred by, and administration fees
  payable to, the Collateral Agent, in each case to the extent not reimbursed
  on or prior to the Effective Date, without the necessity of filing a fee
  application or any other application of any kind or nature with the
  Bankruptcy Court.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The
  prepetition and postpetition fees and expenses of Pillsbury Winthrop Shaw
  Pittman LLP, counsel to the chairman of the Steering Committee, up to a
  maximum of $300,000, shall be paid in cash on the Effective Date by the
  Reorganized Debtors, without the need for application to, or approval of, the
  Bankruptcy Court.  Reorganized USSP
  shall pay the reasonable post-Effective Date fees and expenses of Pillsbury
  (if any) reasonably needed to effectuate the Plan.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The fees and
  expenses of counsel to the Senior Secured Lenders in connection with the
  documentation of the New Term Loan, which counsel shall be chosen by the
  Senior Representatives and reasonably acceptable to USSP, and shall be paid
  in cash on the Effective Date by the Reorganized Debtors, without the need
  for application to, or approval of, the Bankruptcy Court.

	
 

	
 

	
 

	
 

	
•

	
Allowed Second Lien Noteholder Claims

	
 

	
Under the Plan, claims arising
  under the Second Lien Indenture (the “Second Lien Secured Claims”) shall be
  allowed, not subject to offset, defense, counterclaim, reduction or
  credit of any kind whatsoever, in the amount of $100,000,000 (representing the amount of
  principal outstanding under the Second Lien Indenture), plus prepetition
  accrued and unpaid interest.  Each
  Second Lien Noteholder shall receive, in full, complete and final
  satisfaction of its Second Lien Secured Claim, shares of New Common
  Stock and Warrants as set forth under “II. Proposed Restructuring—Equity
  Ownership” above.  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The
  prepetition and postpetition fees and expenses of the Indenture Trustee,
  including administrative and professional fees and expenses (including the
  fees and expenses of Seward &Kissel LLP as primary Indenture Trustee’s
  counsel), shall be paid in cash on the Effective Date by the Reorganized
  Debtors, without the need for application to, or approval of, the Bankruptcy
  Court.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The
  prepetition and postpetition fees and expenses of Bracewell & Giuliani
  LLP, counsel to the Second Lien Representative and special co-counsel to the
  Indenture Trustee, up to a maximum of $250,000 (including within such
  $250,000 reimbursement of the fees and expenses of Blank Rome LLP as special
  maritime counsel to Second Lien Representative, up to a maximum amount of
  $15,000), shall be paid in cash on the Effective Date by the Reorganized
  Debtors, without the need for application to, or approval of, the Bankruptcy
  Court.  Reorganized USSP shall pay the
  reasonable post-Effective Date fees and expenses of Bracewell (if any)
  reasonably needed to effectuate the Plan.

	
 

	
 

	
 

	
 

	
•

	
Other Secured Claims

	
 

	
Except to
  the extent that a holder agrees to a less favorable treatment, on the
  Effective Date, at the sole option of the Debtors, (i) each Allowed Other
  Secured Claim shall be reinstated and rendered unimpaired in accordance with
  section 1124(2) of the Bankruptcy Code, or (ii) each holder of an Allowed
  Other Secured Claim shall receive, in full satisfaction of such Claim, either
  (a) a note with periodic Cash payments having a present value equal to the
  amount of such holder’s Allowed Other Secured Claim, (b) the proceeds of the
  sale or disposition of its Collateral securing such Claim to the extent of
  the value of the holder’s secured interest in such Collateral, (c) the Collateral
  securing such Claim and any interest on such Claim required to be paid
  pursuant to section 506(b) of the Bankruptcy Code, or (d) such other
  distribution as necessary to satisfy the requirements of the Bankruptcy Code.

	
 

	
 

	
 

	
 

	
 

	
Unsecured Claims

	
 

	
 

	
 

	
 

	
 

	
•

	
General Unsecured

	
 

	
To be agreed
  between the Reorganized Debtors and the Steering Committee, but not to exceed
  $100,000.

	
 

	
 

	
 

	
 

	
•

	
Insured Claims

	
 

	
A holder of
  an allowed claim that is an insured claim shall be paid in the ordinary
  course of the business of the Reorganized Debtors from the proceeds of any
  insurance policy covering such claims maintained by or for the benefit of the
  Debtors or the Reorganized Debtors.

	
 

	
 

	
 

	
 

	
Equity Interests

	
 

	
 

	
 

	
 

	
 

	
•

	
USSP Prepetition Equity Interests

	
 

	
On the
  Effective Date, all USSP Prepetition Equity Interests shall be deemed
  cancelled and extinguished and the holders of USSP Prepetition Equity
  Interests shall not be entitled to, and shall not receive or retain, any
  property or interest in property on account of such Prepetition Equity
  Interests under the Plan.  Holders of
  USSP Prepetition Equity Interests shall not be required to surrender their
  certificates or other interests evidencing ownership of such Prepetition
  Equity Interests.

	
 

	
 

	
 

	
 

	
•

	
GP Prepetition Equity Interests

	
 

	
On the
  Effective Date, all prepetition equity interests in USSGP (“GP Prepetition Equity Interests”) shall
  be deemed cancelled and extinguished and the holders of GP Prepetition Equity
  Interests shall not be entitled to, and shall not receive or retain, any property
  or interest in property on account of such Prepetition Equity Interests under
  the Plan.  Holders of GP Prepetition
  Equity Interests shall not be required to surrender their certificates or
  other interests evidencing ownership of such Prepetition Equity Interests.

	
 

	
 

	
 

	
 

	
 

	
V.

	
Cash Collateral

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Cash Collateral

	
 

	
The Debtors
  will enter into a stipulation (the “Cash Collateral Stipulation”) with the
  Collateral Agent regarding the use of cash collateral to satisfy the ongoing
  working capital requirements of the Company during these chapter 11 cases on
  terms and conditions acceptable to the Senior Representatives, whose consent
  shall not be unreasonably withheld.

	
 

	
 

	
 

	
 

	
 

	
 

	
Adequate
Protection 

	
 

	
Pursuant to
  sections 361, 362, 363(c) and 507 of the Bankruptcy Code, the Collateral
  Agent, in each case for the benefit of
  itself and the Senior Secured Lenders, shall be granted the
  following adequate protection (the “Adequate Protection”) of the prepetition
  security interests of the Senior Secured Lenders, for, and equal in amount
  to, the diminution in the value (the “Diminution in Value”) of the pre-petition
  security interests of the Senior Secured Lenders, calculated in accordance
  with section 506(a) of the Bankruptcy Code, whether or not such Diminution in
  Value results from the sale, lease or use by the Debtors of the collateral
  securing the First Lien Credit Agreement (including, without limitation, cash
  collateral (as defined in Section 363(a) of the Bankruptcy Code)), or the
  stay of enforcement of any prepetition security interest arising from section
  362 of the Bankruptcy Code, or otherwise.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Adequate
  Protection Lien.
  As security for and solely to the extent of the Diminution in Value of
  the prepetition security interests of Collateral Agent, the Collateral Agent
  shall be granted, effective and perfected as of the date the stipulation
  ordering the use of Cash Collateral has been entered with the Bankruptcy
  Court (the “Cash
  Collateral Stipulation”), and without the necessity of the
  execution of mortgages, security agreements, pledge agreements, financing
  statements or other agreements, a security interest in and lien on the
  Collateral (as defined in the First Lien Credit Agreement) (the “Adequate Protection Liens”),
  which Adequate Protection Liens shall rank in the same relative priority and
  right as do the security interests and liens of the Collateral Agent.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(j)

	
Super-Priority
  Claim.  To
  the extent of any Diminution in Value of the prepetition security interests
  of the Collateral Agent, the Collateral Agent shall be granted a
  superpriority administrative expense claim as provided for in section 507(b)
  of the Bankruptcy Code.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(k)

	
Interest.  As additional adequate protection, the
  Senior Secured Lenders shall receive cash payments of interest accruing on
  the principal amount of the loans outstanding under the First Lien Credit
  Agreement at the Commencement Date at LIBOR plus fifty basis points.  Interest shall be paid quarterly in
  arrears on the last day of each calendar quarter prior to the Effective Date
  and on the Effective Date.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The
  Indenture Trustee, for the benefit of itself and each of the Second Lien
  Noteholders, shall also be granted each of the foregoing forms of adequate
  protection other than interest payments provided in clause (c), in all cases
  subject to the limitations, subordination provisions and other terms and
  conditions of the Intercreditor Agreement dated as of August 7, 2006,
  between, among others, the Administrative Agent, the Collateral Agent and the
  Indenture Trustee.

	
 

	
 

	
 

	
 

	
 

	
Termination Date

	
 

	
The earlier
  of (x) the Effective Date, (y) the date on which Cash Collateral is used in a
  manner contrary to the Cash Collateral Stipulation and (z) October 1, 2009.

	
 

	
 

	
 

	
 

	
 

	
VI.

	
Other Plan
Provisions 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Releases and Exculpation

	
 

	
The Debtors
  will release their respective current and former officers and directors, the
  Senior Secured Lenders, the Second Lien Noteholders, the Administrative
  Agent, the Collateral Agent, the Indenture Trustee, the Senior Representatives,
  the Second Lien Representative, and the respective officers, directors,
  employees, agents, advisors, and professionals of each of the foregoing,
  including the Debtors (all of the foregoing the “Releasees”), from
  all claims arising before the Effective Date other than claims (i) based upon
  willful misconduct, intentional fraud, or criminal conduct as determined by a
  final order entered by a court of competent jurisdiction and (ii) claims
  against any Senior Secured Lender and Second Lien Noteholder relating to the
  purported termination of certain of Debtors’ rights and agreements with
  respect to USS Products Investor LLC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Plan
  will include standard exculpation for the Releasees for participating in the
  Debtors’ chapter 11 cases, including any parties’ respective present or
  former officers, directors, employees, agents, and advisors of each of the
  forgoing.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Senior
  Secured Lenders and the Second Lien Noteholders will release the Debtors and
  their respective current and former officers, directors, employees, agents,
  advisors, and professionals from all claims arising on or before the
  Effective Date, other than claims (i) based upon willful misconduct,
  intentional fraud, or criminal conduct as determined by a final order entered
  by a court of competent jurisdiction and (ii) claims relating to the
  purported termination of certain of Debtors’ rights and agreements with
  respect to USS Products Investor LLC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
To the
  extent permitted by applicable law, the Administrative Agent, the Collateral
  Agent, the Indenture Trustee, the Senior Representatives, the Second Lien
  Representative and their respective officers, directors, agents, advisors,
  and professionals shall be released by all creditors and interest holders
  from any and all claims arising at any time.

	
 

	
 

	
 

	
 

	
 

	
Governance

	
 

	
The New
  Board shall (a) have up to seven (7) members, two (2) of whom shall be
  members of management, at least one (1) of whom shall be independent and
  shall serve as the Chairman of the New Board, and the remainder shall not be
  members of management.  The initial
  New Board shall be appointed by the Requisite Senior Lenders (in consultation
  with (but not subject to the consent of) the Second Lien Representative, provided
  that the New Board shall include at least one person proposed by the Second
  Lien Representative and reasonably acceptable to the Senior Representatives,
  prior to the hearing to consider Confirmation of the Plan; and provided
  further that the Requisite Senior Lenders shall use commercially reasonable
  efforts to appoint as directors two individuals (one of whom shall be the
  chairman) who are not affiliated with the Debtors, the Senior Secured Lenders
  or the Second Lien Noteholders and who have relevant industry experience.  The members of the New Board shall have
  staggered terms and the New Board shall meet the standards of the U.S.
  Coastwise Trade Laws. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
All existing
  corporate governance documents of the Debtors shall be restated as of the
  Effective Date in order to (i) be in compliance with the Bankruptcy Code and
  (ii) to effectuate the provisions of the Plan.  For the avoidance of doubt, the senior management and the
  composition of the board of directors of Reorganized Debtor (and the term of
  each director) at the Effective Date shall be acceptable to the Steering
  Committee.

	
 

	
 

	
 

	
 

	
Management Equity Plan

	
 

	
The Plan
  shall provide for a Management Equity Plan of ten percent (10%) of New Common
  Stock (the “Management
  Equity Plan”).  The
  terms of the Management Equity Plan, including an initial grant of five
  percent (5%) of New Common Stock (twenty five percent (25%) of which will
  vest on the Effective Date and the balance of which will vest in equal
  amounts on each of the first, second and third anniversary of the Effective
  Date (subject to immediate vesting in full upon a sale of the Reorganized
  Debtors)), and the reservation of an additional five percent (5%) of New
  Common Stock for issuance from time to time following the Effective Date to
  persons and upon terms established by the New Board, are to be approved as
  part of the Plan.  Management
  incentive compensation shall also be developed and in all events shall be
  subject to objective criteria or certified by independent financial or
  compensation advisors to be consistent with industry comparables.  

	
 

	
 

	
 

	
 

	
 

	
Milestones8

	
 

	
“Milestones” shall
  mean the following milestones related to the Debtors’ Cases:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
The Debtors
  shall have filed the Plan and disclosure statement (the “Disclosure Statement”)
  in support of the Plan, in form and in substance reasonably acceptable to the
  Steering Committee, on the date of filing of these chapter 11 cases (the “Commencement Date”)
  or as soon as reasonably practicable thereafter.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
The
  Bankruptcy Court shall have held a hearing to consider approval of such
  disclosure statement and confirmation of such plan of reorganization within
  seventy-five (75) days after the Commencement Date.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
The
  Bankruptcy Court shall have entered an order in form and substance reasonably
  satisfactory to the Steering Committee approving such disclosure statement
  and confirming the Plan within one hundred and twenty (120) days after the
  Commencement Date.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
the
  substantial consummation (as defined in Section 1101 of the Bankruptcy
  Code) of the Plan occurring and all conditions to the effectiveness of the
  Plan having been satisfied or waived by the Steering Committee on or prior to
  October 1, 2009.

	
 

	
 

	
 

	
 

	
 

	
Other Terms and Conditions

	
 

	
The Plan and
  the documentation implementing the Plan will contain customary release,
  injunction, discharge, integration, retention of jurisdiction and governing
  law provisions, as well as customary conditions to confirmation and
  effectiveness of the Plan and such other conditions to confirmation and
  effectiveness of the Plan as may be reasonably required by the Steering
  Committee.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Plan and
  all related documentation shall reflect the terms and conditions of this Plan
  Term Sheet to the parties’ mutual satisfaction and shall contain such other
  terms and conditions as the parties mutually agree.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
This Plan
  Term Sheet will become part of the Plan Support Agreement containing
  customary terms and conditions to be executed by the Company and the
  Requisite Senior Lenders and the Requisite Second Lien Noteholders in support
  of the Plan.

	
 

	
 

	 

	
 

	
8
  Any of the milestones are subject to the Bankruptcy Court calendar
  availability, the milestones set forth in the second, third and fourth
  bullets may be automatically extended by either USSP or the Steering
  Committee for 30 days and may be further modified or extended by agreement of
  USSP and the Steering Committee.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The
  distributions on and treatment of claims contemplated herein shall become
  effective and binding only upon the confirmation and effective date of a plan
  under chapter 11 of the Bankruptcy Code which has been voted upon and
  approved in accordance with section 1126(c) of the Bankruptcy Code, and
  confirmed by the Bankruptcy Court.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The
  Reorganized Debtors shall use their reasonable best efforts to offset any
  cancellation-of-indebtedness income arising from the Plan against all
  available losses.  To the extent there
  is any COD income remaining, the Reorganized Debtors shall use their
  reasonable best efforts to obtain the benefits of the new tax legislation
  permitting a deferral of such income.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Each member
  of the Steering Committee shall be acting only in its own interests and shall
  not be liable in any way to any other Senior Secured Lender or Second Lien
  Noteholder other than with respect to willful misconduct, intentional fraud,
  or criminal conduct as determined by a final order entered by a court of
  competent jurisdiction, and shall cease to act as representatives of the
  Senior Secured Lenders and the Second Lien Noteholders, as the case may be,
  on the Effective Date.

Exhibit B

Form of Joinder

          The
undersigned (“Transferee”)
hereby acknowledges that it has read and understands the Plan Support
Agreement, dated April 23, 2009 (the “Agreement”), by and among U.S.
Shipping Partners L.P., U.S. Shipping Finance Corp., U.S. Shipping Operating
LLC, USS Chartering LLC, USS ATB 1 LLC, USS ATB 2 LLC, USS ATB 3 LLC, USS ATB 4
LLC, USS M/V Houston LLC, ITB Mobile LLC, USCS Chemical Pioneer Inc., ITB
Groton LLC, ITB New York LLC, ITB Jacksonville LLC, ITB Baltimore LLC, USCS ATB
LLC, USCS Sea Venture LLC, ITB Philadelphia LLC, USCS Chemical Chartering LLC,
USCS Charleston Chartering LLC, USCS Charleston LLC, USS JV Manager Inc., USS
Product Manager LLC, USS PC Holding Corp., US Shipping General Partner LLC, USS
Product Carriers LLC and USS Vessel Management LLC and [Transferor’s Name],
certain lenders party to the First Lien Credit Agreement (as defined in the
Agreement) and certain holders of Second Lien Notes (as such term is defined in
the Agreement), and agrees to be bound by the terms and conditions thereof to
the extent Transferor was thereby bound, and shall be deemed a [“Senior
Secured Lender”/”Second Lien Noteholder”] under the terms of the Agreement.

Date
Executed:  ______, 2009

	
 

	
 

	
 

	
 

	
[Transferee’s name]

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
Name: 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
Principal amount of Secured Claims held:  

  $___________________

	
 

	
Date:  _______________

	
 

	
 

	
 

	
 

	
[Address]

	
 

	
Attention:  

	
 

	
Fax: [*]

	
 

	
Email:

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