Document:

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                                                                   EXHIBIT 10.37

                                 LEASE AGREEMENT

        THIS LEASE, made this 23rd day of July, 2001, is by and between BIV
Group, a California general partnership, hereinafter called "Landlord," and
Cholestech Corporation, a California corporation, hereinafter called "Tenant."

                                   WITNESSETH:

        Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises (the "Premises") in bold outline on Exhibit "A"
attached hereto and incorporated herein by this reference and more particularly
described as that certain improved real property in Alameda County, California
commonly known as 3233 Investment Blvd., Hayward CA 94545-3808, an industrial
building containing approximately 68,816 sq. ft. (the "Building"); provided,
however, during the period from April 1, 2002 to and including June 30, 2002
(i.e., the first three months of the Term of this Lease), the Premises shall
include only that portion of the Building at 3233 Investment Blvd. which is
outlined in bold black on Exhibit "A" attached hereto, said portion containing
approximately 40,317 sq. ft. and identified thereon as "LEASED 40,317 S.F.
CHOLESTECH CORP." (the "Currently Occupied Premises"). The remaining portion of
the Premises, being that portion outlined in bold black on Exhibit "A" attached
hereto and identified thereon as "LEASED OZ TECHNOLOGIES" and "LEASED WAINGARTH
CORP" shall be referred to as the "Additional Premises" herein. As used herein
the "Complex" shall mean and include all of the land outlined in Exhibit "A"
attached hereto, and all of the buildings, improvements, fixtures and equipment
now or hereafter situated on said land as well as the land identified as
Assessor's Parcel Number 461-0001-037-02.

        Landlord and Tenant agree and acknowledge that for the purposes of this
Lease the square footage of the Currently Occupied Premises is 40,317 square
feet and that the square footage of the Premises is 68,816 square feet
regardless of the actual square footage.

        Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth and Tenant covenants as a material part of the
consideration for this Lease to perform and observe each and all of said terms,
covenants and conditions. This Lease is made upon the conditions of such
performance and observance.

1. USE Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances for general office,
manufacturing and laboratory purposes, and for other reasonably comparable uses,
but for no other purpose. Tenant shall not do or permit to be done in or about
the Premises or the Complex nor bring or keep or permit to be brought or kept in
or about the Premises or the Complex anything which is prohibited by or will in
any way increase the existing rate of (or otherwise affect) fire or any
insurance covering the Complex or any part thereof, or any of its contents, or
will cause a cancellation of any insurance covering the Complex or any part
thereof, or any of its contents. Tenant shall not do or permit to be done
anything in, on or about the Premises or the Complex which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Complex or injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit

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any nuisance in, on or about the Premises or the Complex. No sale by auction
shall be permitted on the Premises. Tenant shall not place any loads upon the
floors, walls, or ceiling, which endanger the structure, or place any harmful
fluids or other materials in the drainage system of the Building, or overload
existing electrical or other mechanical systems. No waste materials or refuse
shall be dumped upon or permitted to remain upon any part of the Premises or
outside of the Building in which the Premises are a part, except in trash
containers placed inside exterior enclosures designated by Landlord for that
purpose or inside of the Building proper where designated by Landlord. No
materials, supplies, equipment, finished products or semi-finished products, raw
materials or articles of any nature shall be stored upon or permitted to remain
outside the Premises or on any portion of common area of the Complex without
prior written permission from Landlord. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises. Tenant shall indemnify, defend and
hold Landlord harmless against any loss, expense, damage, attorneys' fees, or
liability arising out of failure of Tenant to comply with any applicable law.
Tenant shall comply with any covenant, condition, or restriction ("CC&R's")
affecting the Premises. The provisions of this paragraph are for the benefit of
Landlord only and shall not be construed to be for the benefit of any tenant or
occupant of the Complex.

2. TERM The term of this Lease (the "Term") shall be for a period of 60 months,
or five (5) years (unless sooner terminated as hereinafter provided) and,
subject to Paragraph 3 of this Lease, shall commence on the 1st day of April,
2002, and end on the 31st day of March, 2007. Landlord hereby grants Tenant one
(1) Option to extend the Term of this Lease. The Option will be for a term of
thirty six (36) months or three (3) years. Tenant may exercise such Option by
giving Landlord written notice of its exercise of such Option not less than one
hundred eighty (180) days prior to the expiration of the original Term of this
Lease nor more than two hundred seventy (270) days prior to the expiration of
the original Term of this Lease.

3. POSSESSION On the commencement date of this Lease Tenant shall be leasing and
occupying the Currently Occupied Premises. The parties anticipate that on July
1, 2002, Tenant shall be leasing and occupying the Currently Occupied Premises
and the Additional Premises. If Landlord for any reason whatsoever cannot
deliver possession of the Additional Premises to Tenant by July 1, 2002, this
Lease shall not be void or voidable, no obligation of Tenant shall be affected
thereby; and neither Landlord nor Landlord's agents shall be liable to Tenant
for any loss or damage resulting therefrom; but in that event Tenant's
obligations hereunder regarding the Additional Premises and all dates affected
thereby shall be made to conform to the date Landlord actually delivers
possession of the Additional Premises to Tenant except that the termination date
of the Lease shall remain the 31st day of March, 2007. Landlord shall make all
reasonable efforts to deliver possession of the Additional Premises to Tenant on
or before July 1, 2002.

        If Landlord has not delivered possession of the Additional Premises to
Tenant by August 1, 2002, Landlord shall pay Tenant $250 per day beginning on
August 1, 2002 and continuing until the earlier of the following two dates: (a)
the day Landlord actually delivers possession of the Additional Premises to
Tenant or (b) January 31, 2003. Any such payments shall be made at the end of
any applicable month.

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4. RENT

        A. Basic Rent. Tenant agrees to pay to Landlord at such place as
Landlord may designate without deduction, offset, prior notice, or demand, and
Landlord agrees to accept as Basic Rent for the leased Premises, the total sum
of Five Million, Sixty-two Thousand, Eight Hundred Seventy-eight Dollars and
Forty-five cents ($5,062,878.45) in lawful money of the United States of
America, payable as follows:

<TABLE>
<CAPTION>
                                                              Monthly              Annual
                                                                Rent                Rent
                                                             ----------         -------------
<S>                                                          <C>                <C>
Year 1, from April 1, 2002 to June 30, 2002 40,317           $46,364.55         $  139,093.65
    sq. ft. @ $1.15 per sq. ft.
Year 1, from July 1, 2002 to March 31, 2003 68,816           $79,138.40         $  712,245.60
    sq. ft. @ $1.15
Year 2, from April 1, 2003 to March 31, 2004 68,816          $82,579.20         $  990,950.40
    sq. ft. @ $1.200 per sq. ft.
Year 3, from April 1, 2004 to March 31, 2005 68,816          $86,820.00         $1,032,240.00
    sq. ft. @ $1.250 per sq. ft.
Year 4, from April 1 2005, to March 31, 2006 68,816          $89,460.80         $1,073,529.60
    sq. ft. @ $1.300 per sq. ft.
Year 5, from April 1, 2006, to March 31, 2007                $92,901.60         $1,114,819.20
    68,816 sq. ft. @ $1.350 per sq. ft.
</TABLE>

It is agreed that upon exercising the Option (see Paragraph 2 of this Lease),
the Basic Rent provided for herein is adjusted for the term of the Option
according to Paragraph 38 of this Lease, the total Basic Rent and schedule of
payments described above shall be adjusted accordingly.

        B. Time for Payments. Rent shall be paid monthly in advance on the first
day of the month commencing April 1, 2002. In the event that the Term of this
Lease commences on a date other than the first day of a calendar month, on the
date of commencement of the Term hereof Tenant shall pay to Landlord as rent for
the period from such date of commencement to the first day of the next
succeeding calendar month that proportion of the monthly rent hereunder which
the number of days between such date of commencement and the first day of the
next succeeding calendar month bears to thirty (30). In the event that the Term
of this Lease for any reason ends on a date other than the last day of a
calendar month, on the first day of the last calendar month of the Term hereof
Tenant shall pay to Landlord as rent for the period from said first day of said
last calendar month to and including the last day of the Term hereof that
proportion of the monthly rent hereunder which the number of days between said
first day of said last calendar month and the last day of the Term hereof bears
to thirty (30).

        C. Late Charge. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of rent as set forth in this Paragraph 4 of
this Lease when due, or any part thereof, Tenant agrees to pay Landlord, in
addition to the delinquent rental due, a late charge for

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each rental payment in default fifteen (15) days. Said late charge shall equal
three (3%) percent of each rental payment so in default.

        D. Additional Rent (also known as Triple NNN). "Tenant's Proportional
Share" is defined as follows:

                (i) At such time that the Premises include only the Currently
Occupied Premises, the "Tenant's Proportional Share" shall equal 58.597%
(40,317/68,816); and,

                (ii) At such time that the Premises include all of the Building
at 3233 Investment Blvd. that consists of the Currently Occupied Premises and
the Additional Premises, the "Tenant's Proportional Share" shall equal 100.00%

        Beginning with the commencement date of the Term of this Lease and the
term of the Option, Tenant shall pay the following to Landlord as "Additional
Rent" (i.e., in addition to the Basic Rent described in Paragraph 4 A of this
Lease); provided, however, that notwithstanding any other provision of this
Lease, Tenant's liability for Additional Rent shall commence on April 1, 2002
and not exceed $0.20 per rented square foot per month for the duration of the
Lease:

        (1)     Tenant's Proportionate Share of all utilities relating to the
                Complex as set forth in Paragraph 11 of this Lease, and

        (2)     Tenant's Proportionate Share of all Taxes relating to the
                Complex as set forth in Paragraph 12 of this Lease, and

        (3)     Tenant's Proportionate Share of all insurance premiums relating
                to the Complex, as set forth in Paragraph 15 of this Lease, and

        (4)     Tenant's Proportionate Share of expenses for the operation,
                management, maintenance and repair of the Building (including
                common areas of the Building) and Common Areas of the Complex in
                which the Premises are located as set forth in Paragraph 7 of
                this Lease, and

        In the event of nonpayment by Tenant of Additional Rent, Landlord shall
have all the rights and remedies with respect thereto as Landlord has for
nonpayment of rent.

        Tenant shall pay to Landlord monthly, in advance, Tenant's prorata share
of an amount estimated by Landlord to be Landlord's approximate average monthly
expenditure for such Additional Rent items, which estimated amount shall be
reconciled at the end of each calendar year as compared to Landlord's actual
expenditure for said Additional Rent items, with Tenant paying to Landlord, upon
demand, any amount of actual expenses expended by Landlord in excess of said
estimated amount, or Landlord refunding to Tenant (providing Tenant is not in
default in the performance of any of the terms, covenants and conditions of this
Lease) any amount of estimated payments made by Tenant in excess of Landlord's
actual expenditures for said Additional Rent items. Landlord shall provide
Tenant with a schedule every year showing Landlord's estimated and actual
Additional Rent items.

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<PAGE>

        Tenant's Additional Rent payment at the commencement of the Term of this
Lease shall initiate at a rate of Six Thousand, Five Hundred Dollars ($
6,500.00) per month (the approximate average monthly expenditure) and be
increased per the rate calculation described in Paragraph 4 D of this Lease, not
to exceed a maximum of Thirteen Thousand, Seven Hundred and Sixty Three Dollars,
and Twenty Cents ($13,763.20) per month (i.e. 68,816 sq. ft. @ $0.20 =
$13,763.20) over the Term of the Lease. Tenant's Additional Rent payments in
subsequent years shall not exceed $0.20 per rentable square foot per month, for
Landlord's costs and expenses of operating, managing, and maintaining the common
areas as described in Paragraph 7 of this Lease, and shall reflect any changes
in the size of the Premises leased and occupied by Tenant.

        The respective obligations of Landlord and Tenant under this paragraph
shall survive the expiration or other termination of the Term of this Lease, and
if the Term hereof shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the Term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.

        E. Place of payment of Rent and Additional Rent. All Basic Rent
hereunder and all payments hereunder for Additional Rent shall be paid to
Landlord at the office of Landlord at BIV Group, P.O. Box 1567, Danville, CA,
94526-6567, or to such other person or to such other place as Landlord may from
time to time designate in writing.

        F. Security Deposit. Tenant shall deposit with Landlord upon execution
hereof Seventy Five Thousand Dollars ($ 75,000) as security for Tenants faithful
performance of Tenant's obligation hereunder. If Tenant fails to pay rent or
other charges due hereunder, or otherwise defaults with respect to any provision
of this Lease, the Landlord may use, apply, or retain all or any portion of said
deposit for the payment of any rent or other charge in default, or for the
payment of any other sum to which the Tenant may become obligated by reasons of
Tenant default, or to compensate Landlord for any loss or damage which Landlord
may suffer thereby. If Landlord so uses or applies all or a portion of said
deposit, Tenant shall within thirty (30) days after written demand, heretofore,
deposit cash with Landlord in an amount sufficient to restore said deposit to
the full amount then required of Tenant. Landlord shall not be required to keep
said security deposit separate from its general accounts. If Tenant performs all
of Landlords obligation hereunder, said deposit, or so much thereof as has not
theretofore been applied to by Landlord, shall be returned without payment of
interest or other increment of it's use, to Tenant (or at Landlord's option, to
the last assignee, if any, of Tenants interest hereunder) at the expiration of
the Term hereof, and after Tenant has vacated the Premises. No "Trust"
relationship is created herein between Landlord and Tenant with respect to said
Security Deposit.

5. RULES AND REGULATIONS AND COMMON AREA Subject to the terms and conditions of
this Lease and such Rules and Regulations as Landlord may from time to time
prescribe, Tenant and Tenant's employees, invitees and customers shall, in
common with other occupants of the Complex in which the Premises are located,
and their respective employees, invitees and customers, and others entitled to
the use thereof, have the non-exclusive right to use the access roads, parking
areas, and facilities provided and designated by Landlord for the general use

                                      -5-
<PAGE>

and convenience of the occupants of the Complex in which the Premises are
located, which areas and facilities are referred to herein as "Common Area".
This right shall terminate upon the termination of this Lease. Landlord reserves
the right from time to time to make changes in the shape, size, location, amount
and extent of Common Area. Landlord farther reserves the right to promulgate
such reasonable rules and regulations relating to the use of the Common Area,
and any part or parts thereof, as Landlord may deem appropriate for the best
interests of the occupants of the Complex. The Rules and Regulations shall be
binding upon Tenant upon delivery of a copy of them to Tenant, and Tenant shall
abide by them and cooperate in their observance. Such Rules and Regulations may
be amended by Landlord from time to time, with or without advance notice, and
all amendments shall be effective upon delivery of a copy to Tenant. Landlord
shall not be responsible to Tenant for the non-performance by any other tenant
or occupant of the Complex of any of said Rules and Regulations.

        Landlord shall operate, manage and maintain the Common Area. The manner
in which the Common Area shall be maintained and the expenditures for such
maintenance shall be at the discretion of the Landlord.

6. PARKING During any period while this Lease is in effect and while Tenant
occupies less than 100% of the Building, Tenant shall be entitled to use the
percentage of all parking spaces that is equal to the percentage of the Building
occupied by Tenant which percentage is 58.57%. During such period Landlord shall
have the right to enforce all parking disputes in accordance with Building
occupancy percentages. For the remaining period of the Lease during which Tenant
occupies the entire Building, Tenant will control the designated parking areas
with accommodation made for Landlord service and maintenance activity for the
Premises.

7. EXPENSES OF OPERATION, MANAGEMENT AND MAINTENANCE OF THE COMMON AREAS OF THE
COMPLEX, PREMISES AND BUILDING IN WHICH THE PREMISES ARE LOCATED As Additional
Rent and in accordance with Paragraph 4 D of this Lease, Tenant shall pay to
Landlord Tenant's Proportionate Share (as defined in Paragraph 4 D of this
Lease) of all expenses of operation, management, maintenance and repair of the
Common Areas of the Complex including, but not limited to, license, permit and
inspection fees; security; utility charges associated with exterior landscaping
and lighting (including water and sewer charges); all charges incurred in the
maintenance of landscaped areas, lakes, parking lots, sidewalks, driveways;
maintenance, repair and replacement of all fixtures and electrical, mechanical
and plumbing systems; supplies and materials. All capital repairs and
improvements costs will be paid by the Landlord, but the cost thereof (together
with interest at the rate of eight (8%) percent per annum) may be amortized as
an operating expense. All operating expenses shall be determined in accordance
with generally accepted accounting practices consistently applied.

        As Additional Rent and in accordance with Paragraph 4 D of this Lease,
Tenant shall pay Tenant's Proportionate Share (as defined in Paragraph 4 D of
this Lease) of the cost of operation (including common utilities), management,
maintenance and repair of the Premises and the Building (including common areas
such as lobbies, restrooms, janitor's closets, hallways, elevators, mechanical
and telephone rooms, stairwells, entrances, spaces above the ceilings) in which
the Premises are located. The non-Capital maintenance items herein referred to
include, but are not limited to, janitorization, electrical systems (such as
outlets, lighting fixtures, lamps, bulbs, tubes,

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<PAGE>

ballasts), heating and air conditioning controls (such as mixing boxes,
thermostats, time clocks, supply and return grills), all interior improvements
within the Premises including but not limited to: wall coverings, window
coverings, acoustical ceilings, vinyl tile, carpeting, partitioning, doors (both
interior and exterior, including closing mechanisms, latches, locks), and all
other interior improvements of any nature whatsoever, all windows, window
frames, plate glass, glazing, truck doors, main plumbing systems of the Building
(such as water and drain lines, sinks, toilets, faucets, drains, showers and
water fountains), main electrical systems (such as panels and conduits), heating
and air conditioning systems (with the exception of main control consoles,
compressors, fans, air handlers, ducts, boilers, heaters), store fronts, roofs,
downspouts, building common area interiors (such as wall coverings, window
coverings, floor coverings and partitioning), ceilings, building exterior doors,
skylights (if any), automatic fire extinguishing systems and elevators; license,
permit, and inspection fees; security; salaries and employee benefits of
personnel and payroll taxes applicable thereto; supplies, materials, equipment
and tools. Tenant hereby waives all rights under, and benefits of, subsection I
of Section 1932 and Sections 1941 and 1942 of the California Civil Code and
under any similar law, statute or ordinance now or hereafter in effect. Tenant
agrees to provide carpet shields under all rolling chairs or to otherwise be
responsible for wear and tear of the carpet caused by such rolling chairs if
such wear and tear exceeds that caused by normal foot traffic in surrounding
areas. Areas of excessive wear shall be replaced at Tenant's sole expense upon
Lease termination.

        Additional Rent as used herein shall not include Landlord's debt
repayments; interest on charges; expenses directly or indirectly incurred by
Landlord for the benefit of any other tenant; cost for the installation of
partitioning or any other tenant improvements; cost of attracting tenants;
depreciation; interest, or executive salaries.

        Tenant agrees to provide for appropriate janitorial service for the
leased Premises and to maintain the Complex in good condition.

8. ACCEPTANCE AND SURRENDER OF PREMISES Tenant is currently in possession of the
Currently Occupied Premises and Tenant accepts the Currently Occupied Premises
"AS IS". By entry into the Additional Premises, Tenant accepts the Additional
Premises as being in good and sanitary order, condition and repair, Tenant
accepts the Additional Premises in their present condition and without
representation or warranty by Landlord as to the condition of the Additional
Premises or as to the use or occupancy which may be made thereof, and Tenant
accepts "AS IS" the Additional Premises. However, prior to entry into the
Additional Premises, Landlord and Tenant shall perform a walk-through inspection
and make a list of all items not in good and sanitary order, condition and
repair. Tenant shall not be required to accept the Additional Premises if the
Additional Premises are not in good and sanitary order, condition and repair. If
the Additional Premises are not in good and sanitary order, condition and
repair, Landlord agrees that Landlord (or the prior tenant of Additional
Premises) shall immediately cause the Additional Premises to be in good and
sanitary order, condition and repair except as follows: if it is determined
during the walk-through that the Additional Premises may be affected by a
"Hazardous Material" as defined in Section 43 of this Lease, then Tenant shall
have 30 days to make a final determination that Hazardous Material(s) exists
within the Additional Premises. If it is determined with reasonable certainty
that a Hazardous Material(s) exists within the Additional Premises, then
Landlord shall be obligated to eliminate the Hazardous Material only if the
Hazardous Material can reasonably be

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removed from the Additional Premises with 60 days thereafter. If Landlord is not
required to remove the Hazardous Material(s) due to the 60-day limitation, then
Tenant shall have no obligation to accept the Additional Premises. Also, if
Landlord (or the prior tenant) is required to perform work to cause the
Additional Premises to be in good and sanitary order, condition and repair, then
Tenant is not required to accept the Additional Premises until the work has been
completed. Tenant agrees that Landlord is not otherwise responsible for any
tenant improvements. Any exceptions to the foregoing must be by written
agreement executed by Landlord and Tenant. Tenant agrees on the last day of the
Lease Term, or on the sooner termination of this Lease, to surrender the
Premises promptly and peaceably to Landlord in good condition and repair (damage
by Acts of God, fire or normal wear and tear excepted), with all interior walls
cleaned and repaired, if damaged; all floors cleaned and waxed; all carpets
cleaned and shampooed; the air conditioning and heating equipment serviced by a
reputable and licensed service firm and in good operating condition (provided
the maintenance of such equipment has been Tenant's responsibility during the
Term of this Lease) together with all alterations, additions and improvements
which may have been made in, to, or on the Premises (except movable trade
fixtures installed at the expense of Tenant) except that Tenant shall ascertain
from Landlord within ninety (90) days before the end of the Term of this Lease
whether Landlord desires to have the Premises or any part or parts thereof
restored to their condition and configuration as when the Premises were
delivered to Tenant and if Landlord shall so desire, then Tenant shall restore
said Premises or such part or parts thereof before the end of this Lease at
Tenant's sole cost and expense. Tenant, on or before the end of the Term or
sooner termination of this Lease, shall remove all of Tenant's personal property
and trade fixtures from the Premises and repair any and all damage to the
Building that results from such removal. Tenant's personal property and trade
fixtures shall include, without limitation, the property described on Exhibit
"B" attached hereto and by this reference incorporated herein. All of Tenant's
property not so removed from the Premises on or before the end of the Term or
sooner termination of this Lease shall be deemed abandoned by Tenant and title
to same shall thereupon pass to Landlord without compensation to Tenant.
Landlord may, upon termination of this Lease, remove all moveable furniture and
equipment so abandoned by Tenant, at Tenant's sole cost, and repair any damage
caused by such removal at Tenant's sole cost. If the Premises be not surrendered
at the end of the Term or sooner termination of this Lease, Tenant shall
indemnify Landlord against loss or liability resulting from the delay by Tenant
in so surrendering the Premises including, without limitation, any claims made
by any succeeding tenant founded on such delay. Nothing contained herein shall
be construed as an extension of the Term hereof or as a consent of Landlord to
any holding over by Tenant. The voluntary or other surrender of this Lease or
the Premises by Tenant or a mutual cancellation of this Lease shall not work as
a merger and, at the option of Landlord, shall either terminate all or any
existing subleases or subtenancies or operate as an assignment to Landlord of
all or any such subleases or subtenancies.

9. ALTERATIONS AND ADDITIONS Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written
consent of Landlord first had and obtained by Tenant, but at the cost of Tenant,
and any addition to, or alteration of, the Premises, except moveable furniture
and trade fixtures shall at once become a part of the Premises and belong to
Landlord. If Landlord consents to the making of any alteration, addition, or
improvement to or of the Premises by Tenant, the same shall be made by Landlord
at Tenant's sole cost and expense. Any modifications to the Building or building
systems required by governmental code or otherwise as a result of Tenant's
alterations, additions or improvements shall be made at

                                      -8-
<PAGE>

Tenant's sole cost and expense. Tenant shall retain title to all moveable
furniture and trade fixtures placed in the Premises. All heating, lighting,
electrical, air conditioning, partitioning, drapery, carpeting and floor
installations made by Tenant, together with all property that has become an
integral part of the Premises, shall not be deemed trade fixtures unless
otherwise noted in a written document signed by Landlord and Tenant. Tenant
agrees that it will not proceed to make any alterations or additions, without
having obtained consent from Landlord to do so, and until five (5) days from the
receipt of such consent, in order that Landlord may post appropriate notices to
avoid any liability to contractors or material suppliers for payment for
Tenant's improvements. Tenant will at all times permit such notices to be posted
and to remain posted until the completion of work. Tenant shall, if required by
Landlord, secure at Tenant's own cost and expense, a completion and lien
indemnity bond, satisfactory to Landlord, for such work. Tenant further
covenants and agrees that any "mechanic's lien", filed against the Premises or
against the Complex for work claimed to have been done for, or materials claimed
to have been furnished to Tenant, will be discharged by Tenant, by bond or
otherwise, within thirty (30) days after the filing thereof, at the cost and
expense of Tenant. Any exceptions to the foregoing must be made in writing and
executed by both Landlord and Tenant. Tenant shall obtain all required
governmental permits and provide a copy to Landlord within five days of
obtaining such permits.

10. BUILDING PLANNING [Omitted.]

11. UTILITIES OF THE BUILDING IN WHICH THE PREMISES ARE LOCATED As Additional
Rent and in accordance with Paragraph 4 D of this Lease, Tenant shall pay
Tenant's Proportionate Share (as defined in Paragraph 4 D of this Lease) of the
cost of all utility charges such as water, gas, electricity, telephone, telex
and other electronic communications service, sewer service, waste pick-up and
any other utilities, materials or services furnished directly to the Building in
which the Premises are located, including, without limitation, any temporary or
permanent utility surcharge or other exactions whether or not hereinafter
imposed.

        Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services to the Premises when such interruption or failure is caused by
accident, breakage, repair, "rolling blackouts", strikes, lockouts, or other
labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.

        Provided that Tenant is not in default in the performance or observance
of any of the terms, covenants or conditions of this Lease to be performed or
observed by it, Landlord shall furnish to the Premises reasonable quantities of
water, gas and electricity suitable for the intended use of the Premises and
heat and air conditioning required in Landlord's judgment for the comfortable
use and occupation of the Premises for such purposes. Tenant agrees that at all
times it will cooperate fully with Landlord and abide by all regulations and
requirements that Landlord may prescribe for the proper functioning and
protection of the building heating, ventilating and air conditioning systems.
Whenever heat generating machines, equipment, or any other devices (including
exhaust fans) are used in the Premises by Tenant which affect the temperature or
otherwise maintained by the air conditioning system, Landlord shall have the
right to install supplementary air conditioning units on the Premises and the
costs thereof, including the cost of installation and the cost of operation and
maintenance thereof, shall be paid by Tenant to Landlord upon demand by
Landlord. If Tenant shall

                                      -9-
<PAGE>

require water, gas or electric current in excess of that usually furnished or
supplied to the Premises being used as general office space, Tenant shall first
obtain the written consent of Landlord, which consent shall not be unreasonably
withheld and Landlord may cause an electric current, gas, or water meter to be
installed in the Premises in order to measure the amount of electric current,
gas or water consumed for any such excess use. The cost of any such meter and of
the installation, maintenance and repair thereof, all charges for such excess
water, gas and electric current consumed (as shown by such meters and at the
rates then charged by the furnishing public utility); and any additional expense
incurred by Landlord in keeping account of electric current, gas, or water so
consumed shall be paid by Tenant and Tenant agrees to pay Landlord therefore
promptly upon demand by Landlord. However, any charges that are the result of
such uses contained in the last three sentences above shall not be applied
towards the calculation of the cap on Additional Rent.

        Landlord and Tenant agree that utility charges such as water, gas,
electricity, telephone, telex and other electronic communication services that
are used solely by Tenant within the Premises are the responsibility of Tenant,
that such charges are not Additional Rent and Tenant agrees to pay such charges.

12. TAXES

        A. As Additional Rent and in accordance with Paragraph 4 D of this
Lease, Tenant shall pay to Landlord Tenant's Proportionate Share (as defined in
Paragraph 4 D of this Lease) of all Real Property Taxes. The term "Real Property
Taxes," as used herein, shall mean (i) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all installments of principal and interest required to pay
any general or special assessments for public improvements and any increases
resulting from reassessments caused by any change in ownership of the Complex)
now or hereafter imposed by any governmental or quasi-governmental authority or
special district having the direct or indirect power to tax or levy assessments,
which are levied or assessed against, or with respect to the value, occupancy or
use of, all or any portion of the Complex (as now constructed or as may at any
time hereafter be constructed, altered, or otherwise changed) or Landlord's
interest therein: any improvements located within the Complex (regardless of
ownership); the fixtures, equipment and other property of Landlord, real or
personal, that are an integral part of and located in the Complex; or parking
areas, public utilities, or energy within the Complex; (ii) all charges, levies
or fees imposed by reason of environmental regulation or other governmental
control of the Complex; and (iii) all costs and fees (including attorneys' fees)
incurred by Landlord in contesting any Real Property Tax and in negotiating with
public authorities as to any Real Property Tax. If at any time during the Term
of this Lease the taxation or assessment of the Complex prevailing as of the
commencement date of this Lease shall be altered so that in lieu of or in
addition to any Real Property Tax described above there shall be levied,
assessed or imposed (whether by reason of a change in the method of taxation or
assessment, creation of a new tax or charge, or any other cause) an alternate or
additional tax or charge (i) on the value, use or occupancy of the Complex or
Landlord's interest therein or (ii) on or measured by the gross receipts, income
or rentals from the Complex, on Landlord's business of leasing the Complex, or
computed in any manner with respect to the operation of the Complex, then any
such tax or charge, however designated, shall be included within the meaning of
the term "Real Property Taxes" for purposes of this Lease. If any Real Property
Tax is based upon property or rents unrelated to the Complex, then only that
part of such Real Property Tax that is fairly allocable to the

                                      -10-
<PAGE>

Complex shall be included within the meaning of the term "Real Property Taxes".
Notwithstanding the foregoing, the term "Real Property Taxes" shall not include
estate, inheritance, gift or franchise taxes of Landlord or the federal or state
net income tax imposed on Landlord's income from all sources.

        B. Taxes on Tenant's Property

                (1) Tenant shall be liable for and shall pay before delinquency,
taxes levied against any personal property or trade fixtures placed by Tenant in
or about the Premises. If any such taxes on Tenant's personal property or trade
fixtures are levied against Landlord or Landlord's property or if the assessed
value of the Premises is increased by the inclusion therein of a value placed
upon such personal property or trade fixtures of Tenant and if Landlord, after
written notice to Tenant, pays the taxes based on such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof,
but only under proper protest if requested by Tenant, Tenant shall upon demand,
as the case may be, repay to Landlord the taxes so levied against Landlord, or
the proportion of such taxes resulting from such increase in the assessment;
provided that in any such event Tenant shall have the right, in the name of
Landlord and with Landlord's full cooperation, to bring suit in any court of
competent jurisdiction to recover the amount of any such taxes so paid under
protest, and any amount so recovered shall belong to Tenant.

                (2) If the Tenant improvements in the Premises, whether
installed, and/or paid for by Landlord or Tenant and whether or not affixed to
the real property so as to become a part thereof, are assessed for Real Property
Tax purposes at a valuation higher than the valuation at which standard office
improvements in other space in the Complex are assessed, then the Real Property
Taxes and assessments levied against Landlord or the Complex by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by the provisions of 12A(i), above. If
the records of the County Assessor are available and sufficiently detailed to
serve as a basis for determining whether said Tenant improvements are assessed
at a higher valuation than standard office improvements in other space in the
Complex, such records shall be binding on both the Landlord and the Tenant. If
the records of the County Assessor are not available or sufficiently detailed to
serve as a basis for making said determination, the actual cost of construction
shall be used.

13. LIABILITY INSURANCE Tenant, at Tenant's expense, agrees to keep in force
during the Term of this Lease a policy of comprehensive public liability
insurance with limits in the amount of $1,000,000/$3,000,000 for injuries to or
death of persons occurring in, on or about the Premises, and property damage
insurance with limits of $1,000,000. The policy or policies affecting such
insurance, certificates of which shall be furnished to Landlord, shall name
Landlord as an additional insured, and shall provide that the insurance effected
thereby shall not be canceled, except upon thirty (30) days' prior written
notice to Landlord. If, during the Term of this Lease, in the considered opinion
of Landlord's Lender, insurance advisor or counsel, the amount of insurance
described in this Paragraph 13 of this Lease is not adequate, Tenant agrees to
increase said coverage to such reasonable amount as Landlord's Lender, insurance
advisor or counsel shall deem adequate.

                                      -11-
<PAGE>

14. TENANT'S PERSONAL PROPERTY INSURANCE AND WORKER'S COMPENSATION INSURANCE
Tenant shall maintain a policy or policies of fire and property damage insurance
in "all risk" form with a sprinkler leakage endorsement ensuring the personal
property, inventory, trade fixtures and leasehold improvements within the leased
Premises for the full replacement value thereof. The proceeds from any of such
policies shall be used for the repair or replacement of such items so insured.

        Tenant shall also maintain a policy or policies of worker's compensation
insurance and any other employee benefit insurance sufficient to comply with all
laws.

15. PROPERTY INSURANCE Landlord shall purchase and keep in force, and as
Additional Rent and in accordance with Paragraph 4 D of this Lease, Tenant shall
pay to Landlord Tenant's Proportionate Share (as defined in Paragraph 4 D of
this Lease) of the cost of, a policy or policies of insurance covering loss or
damage to the Premises in the amount of the full replacement value thereof,
providing protection against those perils included within the classification of
"all risks" insurance and, at the option of Landlord, flood insurance and
business interruption insurance. If such insurance cost is increased due to
Tenant's use of the Premises or the Complex, Tenant agrees to pay to Landlord
the full cost of such increased and such increase shall not be applied towards
the cap on Additional Rent. Tenant shall have no interest in nor any right to
the proceeds of any insurance procured by Landlord for the Complex.

        Landlord and Tenant do each hereby respectively release the other, to
the extent of insurance coverage of the releasing party, from any liability for
loss or damage caused by fire or any of the extended coverage casualties
included in the releasing party's insurance policies, irrespective of the cause
of such fire or casualty; provided, however, that if the insurance policy of
either releasing party prohibits such waiver, then this waiver shall not take
effect until consent to such waiver is obtained. If such waiver is so
prohibited, the insured party affected shall promptly notify the other party
thereof.

16. INDEMNIFICATION Landlord shall not be liable to Tenant and Tenant hereby
waives all claims against Landlord for any injury to or death of any person or
damage to or destruction of property in or about the Premises or the Complex by
or from any cause whatsoever, including, without limitation, gas, fire, oil,
electricity or leakage of any character from the roof, walls, basement or other
portion of the Premises or the Complex but excluding, however, the negligence of
Landlord, its agents, servants, employees, invitees, or contractors of which
negligence Landlord has knowledge and reasonable time to correct. Except as to
injury to persons or damage to property the principal cause of which is the
willful act(s) or gross negligence of Landlord, Tenant shall hold Landlord
harmless from and defend Landlord against any and all expenses, including
reasonable attorneys' fees, in connection therewith, arising out of any injury
to or death of any person or damage to or destruction of property occurring, in,
on or about the Premises, or any part thereof, from any cause whatsoever.

17. COMPLIANCE Tenant, at its sole cost and expense, shall promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board of
fire underwriters or other similar body now or hereafter constituted; and with
any direction or occupancy certificate issued pursuant to law by any public

                                      -12-
<PAGE>

officer; provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or
rectify said failure. The judgment of any court of competent jurisdiction or the
admission of Tenant in any action against Tenant, whether Landlord be a party
thereto or not, that Tenant has violated any such law, statute, ordinance or
governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. This paragraph shall not
be interpreted as requiring Tenant to make structural changes or improvements,
except to the extent such changes or improvements are required as a result of
Tenant's use of the Premises. Tenant shall, at its sole cost and expense, comply
with any and all requirements pertaining to said Premises, of any insurance
organization or company, necessary for the maintenance of reasonable fire and
public liability insurance covering the Premises.

18. LIENS Tenant shall keep the Premises and the Complex free from any liens
arising out of any work performed, materials furnished or obligation incurred by
Tenant. In the event that Tenant shall not, within thirty (30) days following
the imposition of such lien, cause the same to be released of record, Landlord
shall have, in addition to all other remedies provided herein and by law, the
right, but no obligation, to cause the same to be released by such means as it
shall deem proper, including payment of the claim giving rise to such lien. All
substantiated and agreed upon sums, paid by Landlord for such purpose, and all
expenses incurred by it in connection therewith, shall be payable to Landlord by
Tenant upon request within thirty (30) days, with interest from the date of the
lien's expiration date, at the prime rate of interest as quoted by a Federally
regulated and insured Banking institution.

19. ASSIGNMENT AND SUBLETTING Tenant shall not assign, transfer or hypothecate
the leasehold estate under this Lease, or any interest therein, and shall not
sublet the Premises, or any part thereof, or any right or privilege appurtenant
thereto, or suffer any other person or entity to occupy or use the Premises, or
any portion thereof, without, in each case, the prior written consent of
Landlord which consent will not be unreasonably withheld. Tenant agrees to pay
to Landlord, as Additional Rent, fifty percent (50%) of all additional rents or
additional consideration received by Tenant from its assignees, transferees, or
subtenants, in excess over the Tenant's current Basic Rent and Additional Rent
(such additional rents or additional consideration to be referred to as "Bonus
Rent"), based upon square footage subletted, of the rent payable by Tenant to
Landlord hereunder. Tenant shall, by one hundred twenty (120) days' written
notice, advise Landlord of its intent to assign or transfer Tenant's interest in
the Lease or sublet the Premises or any portion thereof for any part of the Term
hereof. In the event Tenant is allowed to assign, transfer or sublet the whole
or any part of the Premises, with the prior written consent of Landlord, no
assignee, transferee or subtenant shall assign or transfer this Lease, either in
whole or in part, or sublet the whole or any part of the Premises, without also
having obtained the prior written consent of primary Tenant and Landlord. A
consent of Landlord to one assignment, transfer, hypothecation, subletting,
occupation or use by any other person shall not release Tenant from any of
Tenant's obligations hereunder or be deemed to be a consent to any subsequent
similar or dissimilar assignment, transfer, hypothecation, subletting,
occupation or use by any other person. Any such assignment, transfer,
hypothecation, subletting, occupation or use without such consent shall be void
and shall constitute a breach of this Lease by Tenant and shall, at the option
of Landlord exercised by written notice to Tenant, terminate this Lease. The
leasehold estate under this Lease shall not, nor shall any interest therein, be
assignable for any purpose by operation of law without the written consent of
Landlord. As a condition to its

                                      -13-
<PAGE>

consent, Landlord may require Tenant to pay all expenses in connection with the
assignment and Landlord may require Tenant's assignee or transferee (or other
assignees or transferees) to assume in writing all of the obligations under this
Lease and for Tenant to remain liable to Landlord under the Lease.

        Without in any way limiting Landlord's right to refuse to give such
consent for any other reason or reasons, Landlord reserves the right to refuse
to give such consent, and Tenant agrees that it would not be commercially
unreasonable to withhold consent, if in Landlord's reasonable business judgment
(a) the transferee is not of a character or is not engaged in a business which
is in keeping with the standards of Landlord for the Premises, (b) the purpose
for which the transferee intends to use the Premises is in violation of the
Lease, or (c) the sublease or assignment does not provide for Landlord's right,
at its discretion, to require any such transferee to perform its obligations
under the sublease or assignment agreement directly to Landlord upon the
termination of the Lease due to an Event of Default by Tenant.

        Tenant agrees to pay Landlord's reasonable attorneys' fees and costs
incurred in connection with the assignment or subletting of the Premises by
Tenant, but not more than $1000 for each assignment or subletting. Tenant shall
have no responsibility for Landlord's legal expenses if Landlord withholds its
consent to an assignment or subletting.

20. SUBORDINATION AND MORTGAGES In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust, upon the interest of
Landlord in the land and Building in which the demised Premises are located, to
secure a loan from a lender (hereinafter referred to as "Lender") to Landlord,
Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender's deed of trust
shall be or remain subject and subordinate to the rights of Tenant under this
Lease. Tenant hereby irrevocably appoints Landlord the attorney in fact of
Tenant to execute, deliver and record any such instrument or instruments for and
in the name and on behalf of Tenant. Notwithstanding any such subordination,
Tenant's possession under this Lease shall not be disturbed if Tenant is not in
default and so long as Tenant shall pay all rent and observe and perform all of
the provisions set forth in this Lease. Tenant agrees to send to any mortgagees
and/or deed of trust holders, a copy of any notice of default served by Tenant
upon the Landlord, provided that prior to such notice, Tenant has been notified,
in writing (by way of notice of assignment of rents or otherwise) of the
addresses of such mortgagees and/or deed of trust holders. Tenant further agrees
that if Landlord shall have failed to cure such default within the time provided
for in this Lease, any such mortgagees and/or deed of trust holders shall have
an additional thirty (30) days within which to cure such default, or if such
default is not reasonably susceptible of cure within that time, then such
additional time as may be reasonably necessary if within such (30) days, any
mortgagee and/or deed of trust holder has commenced and is diligently pursuing
the remedies necessary to cure such default, (including but not limited to
commencement of foreclosure proceedings), in which event this Lease shall not be
terminated when such remedies are being diligently pursued.

                                      -14-
<PAGE>

21. ENTRY BY LANDLORD Landlord reserves, and shall at all reasonable times have,
the right to enter the Premises to inspect them; to perform any services to be
provided by Landlord hereunder; to submit the Premises to prospective
purchasers, mortgagers or tenants; to post notice of nonresponsibility; and to
alter, improve or repair the Premises and any portion of the Complex, all
without abatement of rent; and may erect scaffolding and other necessary
structures in or through the Premises where reasonably required by the character
of the work to be performed; provided, however, that the business of Tenant
shall be interfered with to the least extent that is reasonably practical. For
nonemergency matters, Landlord will give Tenant twenty-four (24) hours advance
notice of entry onto the Premises. For each of the foregoing purposes, Landlord
shall at all times have and retain a key with which to unlock all of the doors
in an emergency in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord by any of said means, or otherwise, shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into or a detainer of the Premises or an eviction, actual or constructive,
of Tenant from the Premises or any portion thereof. Landlord shall also have the
right at any time to change the arrangement or location of entrances or
passageways, doors and doorways, and corridors, elevators, stairs, toilets or
other public parts of the Complex and to change the name, number or designation
by which the Complex is commonly known and none of the foregoing shall be deemed
an actual or constructive eviction of Tenant, or shall entitle Tenant to any
reduction of rent hereunder.

22. BANKRUPTCY AND DEFAULT The commencement of a bankruptcy action or
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar action
undertaken by Tenant, or the insolvency of Tenant, shall, at Landlord's option,
constitute a breach of this Lease by Tenant.

        If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, U.S.C. Section 101 et al (the "Bankruptcy
Code"), any and all monies or other consideration payable or otherwise to be
delivered in connection with such assignment shall be paid or delivered to
Landlord, shall be the exclusive property of Landlord and shall not constitute
property of Tenant or of the estate of Tenant within the meaning of the
Bankruptcy Code. Any and all monies or other consideration constituting
Landlord's property under the preceding sentence not paid or delivered to
Landlord shall be held in trust for the benefit of Landlord and be promptly paid
or delivered to Landlord.

        Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or deed to
have assumed all of the obligations arising under this Lease on and after the
date of such assignment. Any such assignee shall upon demand execute and deliver
to Landlord an instrument confirming such assumption.

        This is a lease of real property within the meaning of Subsection 365(b)
(3) of the Bankruptcy Code.

        The occurrence of any of the following shall constitute a breach and
material default of this Lease by Tenant if such occurrence shall remain uncured
beyond the applicable cure period specified herein (an "Event of Default"):

                                      -15-
<PAGE>

        (a) The failure of Tenant to pay or cause to be paid when due any rent,
        monies, or charges required by this Lease to be paid by Tenant when such
        failure continues for a period of five (5) days after written notice
        thereof from Landlord to Tenant; or

        (b) The vacation or abandonment of the Premises by Tenant in violation
        of Paragraph 23 of this Lease; or

        (c) The violation of Paragraph 1 of this Lease; or

        (d) The failure of Tenant to comply with Paragraphs 20, 27, 29 and 42 of
        this Lease when such failure continues for a period of five (5) business
        days after the second written notice thereof from Landlord to Tenant; or

        (e) The failure of Tenant to do or cause to be done any material act,
        other than payment of rent, monies or charges, required by this Lease
        when such failure continues for a period of thirty (30) days after
        written notice thereof from Landlord to Tenant; provided that, in the
        event that if such cure cannot reasonably be cured within such thirty
        (30) day period, the failure of Tenant to within such thirty (30) day
        period commence with due diligence and dispatch the curing of such
        default, or, having so commenced, the failure thereafter to prosecute or
        complete with due diligence and dispatch the curing of such default; or

        (f) Tenant causing, permitting, or suffering, without the prior written
        consent of Landlord, any material act when this Lease requires
        Landlord's prior written consent or prohibits such act; or

        (g) The occurrence of any event of insolvency or bankruptcy with respect
        to Tenant, including any of the following by way of illustration:

                (1) Any general assignment or general arrangement for the
                benefit of creditors;

                (2) The filing of any petition by or against Tenant to have
                Tenant adjudged a bankrupt or a petition for reorganization or
                arrangement under any law relating to bankruptcy, unless such
                petition is filed against Tenant and the same is dismissed
                within sixty (60) days;

                (3) The appointment of a trustee or receiver to take possession
                of substantially all of Tenant's assets located in the Premises
                or of Tenant's interest in this Lease; or

                (4) The attachment, execution or other judicial seizure of
                substantially all of Tenant's assets located at the Premises or
                of Tenant's interest in this Lease.

        (h) The falsification of any material written report or statement
        required to be given by Tenant to Landlord under this Lease.

        In the Event of Default by Tenant, in addition to other rights or
remedies of Landlord at law or in equity, Landlord shall have the right to
exercise any one or more of the following remedies:

                                      -16-
<PAGE>

        (a) Collect Rent Without Terminating Lease. Landlord may recover from
        Tenant the rent as it becomes due and any other amount reasonably
        necessary to compensate Landlord for all detriment proximately caused by
        Tenant's failure to perform its obligations under this Lease. Landlord
        may sue monthly, annually or after such equal or unequal periods as
        Landlord desires for amounts due under this subparagraph (a). The right
        to collect rent as it becomes due shall terminate upon the termination
        by Landlord of Tenant's right to possession of the Premises. Tenant's
        right to possession shall not be terminated unless and until Landlord
        delivers to Tenant written notice thereof or the Lease Term expires.

        (b) Terminate Lease. Landlord, either as an alternative or subsequent to
        exercising the remedies set forth in subparagraph (a), may terminate
        Tenant's right to possession of the Premises by and upon delivery to
        Tenant of written notice of termination. Landlord may then immediately
        reenter the Premises and take possession thereof pursuant to legal
        proceedings and remove all persons and property from the Premises. Such
        property may be removed and stored in a public warehouse or elsewhere at
        the cost of and for the account of Tenant. No notice of termination
        shall be necessary in the event that Tenant has abandoned the Premises
        in violation of Paragraph 23 of this Lease. In the event that Landlord
        elects to terminate Tenant's night of possession, Landlord may recover
        all of the following:

                (1) The worth at the time of award of the unpaid rent which had
                been earned at the time of termination. "Worth at the time of
                award" shall be computed by allowing interest at the Interest
                Rate from the first day the breach occurs;

                (2) The worth at the time of award of the amount by which the
                unpaid rent which would have been earned after termination until
                the time of award exceeds the amount of such rental loss that
                the Tenant proves could have been reasonably avoided. "Worth at
                the time of award" shall be determined by allowing interest at
                the Interest Rate from the first day a breach occurs;

                (3) The worth at the time of award by which the unpaid rent for
                the balance of the Term after the time of award exceeds the
                amount of such rental loss that the Tenant proves could be
                reasonably avoided. "Worth at the time of award" shall be
                computed by discounting such amount at time Interest Rate;

                (4) Any other amount necessary to compensate Landlord for the
                detriment proximately caused by Tenant's failure to perform its
                obligations under the Lease or which in the ordinary course of
                events would be likely to result therefrom including, but not
                limited to, reasonable expenses of reletting, attorneys' fees,
                costs of alterations and repairs, recording fees, filing fees
                and any other expenses customarily resulting from obtaining
                possession of leased Premises and releasing.

23. ABANDONMENT Actual abandonment of the Premises by Tenant is prohibited.
Tenant shall not vacate the Premises at any time during the Term of this Lease
for more than twenty-five (25) days without prior written notice to Landlord and
Landlord's written approval thereof, which approval shall not be unreasonably
withheld. In the event that Landlord approves the vacation of the Premises by
Tenant, Tenant shall continue to pay rent as due, maintain the Premises as
provided

                                      -17-
<PAGE>

hereunder, and provide adequate onsite security for the Premises. If Tenant
shall abandon, vacate or surrender the Premises in violation hereof, or be
dispossessed by process of law, or otherwise, any personal property or trade
fixtures belonging to Tenant and left on the Premises shall, at the option of
Landlord, be deemed abandoned. In such case, Landlord may dispose of said
personal property in any manner and is hereby relieved of all liability for
doing so. These provisions shall not apply if the Premises should be closed and
business temporarily discontinued therein on account of strikes, lockouts, or
similar causes (other than those of a financial nature) beyond the reasonable
control of Tenant.

24. DESTRUCTION In the event the Premises are destroyed in whole or in part from
any cause, Landlord may, at its option:

        (a) Rebuild or restore the Premises to their condition prior to the
damage or destruction, or

        (b) Terminate this Lease.

        If Landlord does not give Tenant notice in writing within thirty (30)
days from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restore them, in which event Landlord agrees, at its
expense, promptly to rebuild or restore the Premises to their condition prior to
the damage or destruction. Tenant shall be entitled to a reduction in rent while
such repair is being made in the proportion that the area of the Premises
rendered untenantable by such damage bears to the total area of the Premises. If
Landlord does not complete the rebuilding or restoration within one hundred
eighty (180) days following the date of destruction (such period of time to be
extended for delays caused by the fault or neglect of Tenant or because of Acts
of God, acts of public agencies, labor disputes, strikes, fires, freight
embargoes, rainy or stormy weather, inability to obtain materials, supplies or
fuels, acts of contractors or subcontractors, or delay of the contractors or
subcontractors due to such causes or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving
fifteen (15) days prior written notice to Landlord. Notwithstanding anything
herein to the contrary, Landlord's obligation to rebuild or restore shall be
limited to the Building and interior improvements constructed by Landlord as
they existed as of the commencement date of the Lease and shall not include
restoration of Tenant's trade fixtures, equipment, merchandise or any
improvements, alterations or additions made by Tenant to the Premises, which
Tenant shall forthwith replace or fully repair at Tenant's sole cost and expense
provided this Lease is not cancelled according to the provisions above.

        Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Tenant hereby expressly waives
the provisions of Section 1932, Subdivision 2, and Section 1933, Subdivision 4
of the California Civil Code.

        In the event that the Building in which the Premises are situated is
damaged or destroyed to the extent of not less than 33 1/3 % of the replacement
cost thereof, Landlord may elect to terminate this Lease, whether the Premises
be injured or not. In the event the destruction of the Premises is caused by
Tenant, Tenant shall pay the deductible portion of Landlord's insurance
proceeds.

                                      -18-
<PAGE>

25. EMINENT DOMAIN If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or conveyance
in lieu thereof, this Lease shall terminate as to any portion of the Premises so
taken or conveyed on the date when title vests in the condemnor, and Landlord
shall be entitled to any and all payment, income, rent, award or any interest
therein whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the
value of any unexpired Term of this Lease. Notwithstanding the foregoing
paragraph, any compensation specifically awarded Tenant for loss of business,
Tenant's personal property, moving cost or loss of goodwill, shall be and remain
the property of Tenant.

        If (i) any action or proceeding is commenced for such taking of the
Premises or any part thereof, or if Landlord is advised in writing by any entity
or body having the right or power of condemnation of its intention to condemn
the Premises or any portion thereof, or (ii) any of the foregoing events occur
with respect to the taking of any space in the Complex not leased hereby, or if
any such spaces so taken or conveyed in lieu of such taking and Landlord shall
decide to discontinue the use and operation of the Complex, or decide to
demolish, alter or rebuild the Complex, then, in any of such events Landlord
shall have the right to terminate this Lease by giving Tenant written notice
thereof within sixty (60) days of the date of receipt of said written advice, or
commencement of said action or proceeding, or taking conveyance, which
termination shall take place as of the first to occur of the last day of the
calendar month next following the month in which such notice is given or the
date on which title to the Premises shall vest in the condemnor.

        In the event of such a partial taking or conveyance of the Premises, if
the portion of the Premises taken or conveyed is so substantial that the Tenant
can no longer reasonably conduct its business. Tenant shall have the privilege
of terminating this Lease within sixty (60) days from the date of such taking or
conveyance, upon written notice to Landlord of its intention so to do, and upon
giving of such notice this Lease shall terminate on the last day of the calendar
month next following the month in which such notice is given, upon payment by
Tenant of the rent from the date of such taking or conveyance to the date of
termination.

        If a portion of the Premises be taken by condemnation or conveyance in
lieu thereof and neither Landlord nor Tenant shall terminate this Lease as
provided herein, this Lease shall continue in full force and effect as to the
part of the Premises not so taken or conveyed, and the rent herein shall be
apportioned as of the date of such taking or conveyance so that thereafter the
rent to be paid by Tenant shall be in the ratio that the area of the portion of
the Premises not so taken or conveyed bears to the total area of the Premises
prior to such taking.

26. SALE OR CONVEYANCE BY LANDLORD In the event of a sale or conveyance of the
Complex or any interest therein, by any owner of the reversion then constituting
Landlord, the transferor shall thereby be released from any further liability
upon any of the terms, covenants or conditions (express or implied) herein
contained in favor of Tenant, and in such event, insofar as such transfer is
concerned, Tenant agrees to look solely to the responsibility of the successor
in interest of such transferor in and to the Complex and this Lease. This Lease
shall not be affected by any such sale or conveyance, and Tenant agrees to
attorn to the successor in interest of such transferor.

                                      -19-
<PAGE>

27. ATTORNMENT TO LENDER OR THIRD PARTY In the event the interest of Landlord in
the land and Building in which the leased Premises are located (whether such
interest of Landlord is a fee title interest or a leasehold interest) is
encumbered by deed of trust, and such interest is acquired by the lender or any
third party through judicial foreclosure or by exercise of a power of sale at
private trustee's foreclosure sale, Tenant hereby agrees to attorn to the
purchaser at any such foreclosure sale and to recognize such purchaser as the
Landlord under this Lease. In the event the lien of the deed of trust securing
the loan from a Lender to Landlord is prior and paramount to the lease, this
Lease shall nonetheless continue in full force and effect for the remainder of
the unexpired Term hereof, at the same rental herein reserved and upon all the
other terms, conditions and covenants herein contained.

28. HOLDING OVER Any holding over by Tenant after expiration or other
termination of the Term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease or
give Tenant any rights in or to the leased Premises except as expressly provided
in this Lease Any holding over after the expiration or other termination of the
Term of this Lease, with the consent of Landlord, shall be construed to be a
tenancy from month to month, on the same terms and conditions herein specified
insofar as applicable. The Basic Rent payable during any such period of holding
over shall be equal to the Basic Rent payable during the period immediately
preceding Tenant's holding over increased by one hundred twenty-five percent
(125%) of the Monthly Basic Rent. Tenant shall pay all Additional Rent payments
as specified within this Lease. Notwithstanding the foregoing, Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises upon the expiration of the Term hereof or upon the earlier termination
hereof and the right to assert any remedy at law or in equity to evict Tenant
and/or collect damages in connection with any such holding over. Tenant shall
indemnify, defend and hold Landlord harmless from and against any and all
claims, demands, actions, losses, damages, obligations, costs and expenses,
including, without limitation, attorneys' fees incurred or suffered by Landlord
by reason of Tenant's failure to surrender the Premises on the expiration or
earlier termination of this Lease in accordance with the provisions of this
Lease.

29. CERTIFICATE OF ESTOPPEL Tenant shall at any time upon not less than ten (10)
days' prior written notice from Landlord execute, acknowledge and deliver to
Landlord a statement in writing (i) certifying that this Lease is unmodified and
in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any, are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon Tenant that this Lease is in full force and effect, without modification
except as may be represented by Landlord; that there are no uncured defaults in
Landlord's performance, and that not more than one month's rent has been paid in
advance.

30. CONSTRUCTION CHANGES [Omitted.]

31. RIGHT OF LANDLORD TO PERFORM All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed by
Tenant at Tenant's

                                      -20-
<PAGE>

sole cost and expense and without any reduction of rent. If Tenant shall fail to
pay any sum of money, or other rent, required to be paid by it hereunder or
shall fail to perform any other term or covenant hereunder on its part to be
performed, and such failure shall continue for seven (7) calendar days after
written notice thereof by Landlord, Landlord, without waiving or releasing
Tenant from any obligation of Tenant hereunder, may, but shall not be obligated
to, make any such payment or perform any such other term or covenant on Tenant's
part to be performed. All sums so paid by Landlord and all necessary costs of
such performance by Landlord together with interest thereon at the rate of the
prime rate of interest per annum as quoted by the Bank of America from the date
of such payment of performance by Landlord, shall be paid (and Tenant covenants
to make such payment) to Landlord on demand by Landlord, and Landlord shall have
(in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of nonpayment by Tenant as in the case of failure by
Tenant in the payment of rent hereunder.

32. ATTORNEYS' FEES

        (A) In the event that Landlord should bring suit for the possession of
the Premises, for the recovery of any sum due under this Lease, or because of
the breach of any provision of this Lease, or for any other relief against
Tenant hereunder, then all costs and expenses, including reasonable attorneys'
fees, incurred by the prevailing party therein shall be paid by the other party,
which obligation on the part of the other party shall be deemed to have accrued
on the date of the commencement of such action and shall be enforceable whether
or not the action is prosecuted to judgment.

        (B) Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder, Tenant
shall pay to Landlord its costs and expenses incurred in such suit, including a
reasonable attorney's fee.

33. WAIVER The waiver by either party of the other party's failure to perform or
observe any term, covenant or condition herein contained to be performed or
observed by such waiving party shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent failure of the party failing to
perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the Term hereof shall be deemed a waiver of, or in any way
affect, the right of either party to insist upon performance and observance by
the other party in strict accordance with the terms hereof.

34. NOTICES All notices, demands, requests, advices or designations which may be
or are required to be given by either party to the other hereunder shall be in
writing. All notices, demands, requests, advices or designations by Landlord to
Tenant shall be sufficiently given, made or delivered if personally served on
Tenant by leaving the same at the Premises or if sent by United States certified
or registered mail, postage prepaid, addressed to Tenant at the Premises. All
notices, demands, requests, advices or designations by Tenant to Landlord shall
be sent by United States certified or registered mail, postage prepaid,
addressed to Landlord at its offices at BIV Group, P.O. Box 1567, Danville, CA,
94526-6567. Each notice, request, demand, advice or designation referred to in
this paragraph shall be deemed received on the date of the personal service or
mailing thereof in the manner herein provided, as the case may be.

                                      -21-
<PAGE>

35. EXAMINATION OF LEASE Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a lease,
and this instrument is not effective as a lease or otherwise until its execution
and delivery by both Landlord and Tenant. Landlord and Tenant mutually intend
that neither shall have any binding contractual obligations to the other with
respect to the matters referred to herein unless and until this instrument has
been fully executed by both parties.

36. DEFAULT BY LANDLORD Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a reasonable time, but in no
event earlier than thirty (30) days after written notice by Tenant to Landlord
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have heretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord's obligations is such that
more than thirty (30) days are required for performance, then Landlord shall not
be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.

37. CORPORATE AUTHORITY If Tenant is a corporation (or a partnership) each
individual executing this Lease on behalf of said corporation (or partnership)
represents and warrants that he is duly authorized to execute and deliver this
Lease on behalf of said corporation (or partnership) in accordance with the
by-laws of said corporation (or partnership in accordance with the partnership
agreement) and that this Lease is binding upon said corporation (or partnership)
in accordance with its terms. If Tenant is a corporation, Tenant shall, within
thirty (30) days after execution of this Lease, deliver to Landlord a certified
copy of the resolution of the Board of Directors of said corporation authorizing
or ratifying the execution of this Lease.

38. BASIC RENT ADJUSTMENT It is understood and agreed that upon the exercise of
the Option (see Paragraph 2 of this Lease) the Basic Rent and Additional Rent
for the Premises as of the relevant Option period commencement date, the Basic
Rent provided for in Paragraph 4 A of the Lease shall be analyzed to establish
current fair market rate and new Basic Rent. The new Basic Rent will be at 100%
of the fair market value. If it becomes necessary to determine fair market value
for the Premises by appraisal, real estate appraiser(s) all of who shall be
members of the American Institute of Real Estate Appraisers, and who have at
least 5 years experience appraising "R&D - Flexible type" space in the vicinity
of the Premises shall be appointed and shall act in accordance with the
following procedure:

        (i)     If the parties are unable to agree on the Fair Market Rent
                within the allowed time, either party may demand an appraisal by
                giving written notice to the other party, which to be effective
                must state the name, address, and qualifications of an appraiser
                selected by the notifying party demanding an appraisal (the
                "Notifying Party"). Within ten (10) days following the Notifying
                Party's Appraisal demand, the other party (the "Non-Notifying
                Party") shall either approve the appraiser selected by the
                notifying party, or select a second properly qualified appraiser
                by giving written notice of the name, address, and qualification
                of said appraiser to the Notifying Party. If the Non-Notifying
                party fails to select and appraiser within the ten (10) day
                period, the appraiser selected by the Notifying Party shall be
                deemed selected by both parties and no other appraiser shall be
                selected. If two appraisers are selected, they shall

                                      -22-
<PAGE>

                select a third appropriately qualified appraiser. If the two
                appraisers fail to select a third qualified appraiser, the third
                appraiser shall be appointed by the then presiding judge of the
                county where the Premises are located upon application by either
                party.

        (ii)    If only one appraiser is selected, that appraiser shall notify
                the parties in simple letter form of its determination of the
                Fair Market Rent for the Premises within fifteen (15) days
                following his selection, which appraisal shall be conclusively
                determination and binding on the parties as the appraised Fair
                Market Rent.

        (iii)   If multiple appraisers are selected, the appraisers shall meet
                not later than ten (10) days following the selection of the last
                appraiser. At such meeting the appraisers shall attempt to
                determine the Fair Market Rent for the Premises as of the
                commencement date of the Option period by the agreement of at
                least two (2) of the appraisers.

        (iv)    If two (2) or more of the appraisers agree on the Fair Market
                Rent for the Premises at the initial meeting, such agreement
                shall be determinative and binding upon the parties hereto and
                the agreeing appraisers shall, in simple letter form executed by
                the agreeing appraisers, forthwith notifying both Landlord and
                Tenant of the amount set by such agreement. If multiple
                appraisers are selected and two (2) appraisers are unable to
                agree on the Fair Market Rent for the Premises, all appraisers
                shall submit to Landlord and Tenant an independent appraisal of
                the Fair Market Rent for the Premises in simple letter from
                within twenty (20) days following appointment of the final
                appraiser. The parties shall then determine the Fair Market Rent
                for the Premises by averaging the appraisals; provided that any
                high or low appraisal, differing from the middle appraisal by
                more than ten percent (10%) of the middle appraisal, shall be
                deemed to be exactly 10% higher (if the high appraisal differs
                by more than 10% from the middle appraisal) or 10% lower than
                the middle appraisal (if the low appraisal differs by more than
                10% from the middle appraisal) in calculating the average.

        (v)     The appraisers' determination of Fair Market Rent shall be based
                on rental of space of the same age, construction, size and
                location as the Premises with the improvements installed therein
                at Landlord's expense and shall take into account Tenant's
                obligations to pay Additional Rent under this Lease. In
                determining Fair Market Rent, the appraisers shall not consider
                any alterations installed in the Premises at Tenant's expense.

        (vi)    If only one appraiser is selected, then each party shall pay
                one-half of the fees and expenses of that appraiser. If three
                appraisers are selected, each party shall bear the fees and
                expenses of the appraiser it selects and one-half of the fees
                and expenses of the third appraiser.

Notwithstanding anything to the contrary contained in this Paragraph 38 of this
Lease, the Basic Rent for the Option Term may be no less than the Basic Rent
during the third year of the Term of this Lease unless Landlord agrees in
writing. If the establishment of a new Basic Rent for the

                                      -23-
<PAGE>

Option Term is determined by appraisal as set forth above, and if Tenant does
not, in its sole discretion, approve the Basic Rent established by such
appraisal, then Tenant may by written notice to Landlord no later than September
30, 2006, rescind the exercise of its Option to extend the Term of this Lease
for three (3) years. If Tenant properly rescinds the exercise of its Option to
extend the Term of this Lease for three (3) years, then Landlord agrees that
Tenant has the right to extend the term of this Lease for one additional period
of up to six (6) months upon the same terms and provisions of this Lease at the
same Basic Rent as the last month of the Term of this Lease. Tenant shall notify
Landlord of the exact number of full months (not to exceed six (6) months) that
Tenant elects to extend the Term of this Lease by written notice to Landlord no
later than September 30, 2006.

39. LIMITATION OF LIABILITY In consideration of the benefits accruing hereunder,
Tenant and all successors and assigns covenant and agree that, in the event of
any actual or alleged failure, breach or default hereunder by Landlord:

        (i)     the sole and exclusive remedy shall be against Landlord and
                Landlord's assets;

        (ii)    no partner of Landlord shall be sued or named as a party in any
                suit or action (except as may be necessary to secure
                jurisdiction of the partnership);

        (iii)   no service of process shall be made against any partner of
                Landlord (except as may be necessary to secure jurisdiction of
                the partnership);

        (iv)    no partner of Landlord shall be required to answer or otherwise
                plead to any service of process;

        (v)     no judgment shall be taken against any partner of Landlord;

        (vi)    any judgment taken against any partner of Landlord may be
                vacated and set aside at any time without hearing;

        (vii)   no writ of execution will ever be levied against the assets of
                any partner of Landlord;

        (viii)  these covenants and agreements are enforceable both by Landlord
                and also by any partner of Landlord.

        (ix)    The term "Landlord," as used in this section, shall mean only
                the owner or owners from time to time of the fee title of the
                land described in Exhibit "B," and in the event of any transfer
                of such title or interest, Landlord herein named (and in case of
                any subsequent transfers the then grantor) shall be relieved
                from and after the date of such transfer of all liability as
                respects Landlord's obligations thereafter to be performed,
                provided that any funds in the hands of Landlord or the then
                grantor at the time of such transfer in which Tenant has an
                interest shall be delivered to the grantee. Similarly, the
                obligations contained in this Lease to be performed by Landlord
                shall be binding on Landlord's successors and assigns only
                during their respective periods of ownership. Tenant agrees that
                each of the foregoing covenants and agreements

                                      -24-
<PAGE>

                shall be applicable to any covenant or agreement either
                expressly contained in this Lease or imposed by statute or at
                common law.

        (x)     Landlord has no obligation to provide any security measures for
                the benefit of the Premises or the Common Areas or the Complex
                except that Landlord shall maintain in good working order the
                existing exterior lighting system.

40. BROKERS Tenant warrants that it knows of no real estate broker or agent who
is entitled to a commission in connection with this Lease.

41. SIGNS No new sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed, printed or affixed on or to any part of the outside of the
Premises or any exterior windows of the Premises without the written consent of
Landlord first had and obtained, and Landlord shall have the right to remove any
such sign, placard, picture, advertisement, name or notice with seventy-two (72)
hour notice and at the expense of Tenant. If Tenant is allowed to print or affix
or in any way place a sign in, on, or about the Premises, then upon expiration
or other sooner termination of this Lease, Tenant at Tenant's sole cost and
expense shall both remove such sign and repair all damage in such a manner as to
restore all aspects of the appearance of the Premises to the condition prior to
the placement of said sign.

        All approved signs or lettering on outside doors shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person approved of
by Landlord.

        Tenant shall not place anything or allow anything to be placed near the
glass of any window, door partition or wall which may appear unsightly from
outside the Premises.

42. FINANCIAL STATEMENTS In the event Tenant tenders to Landlord any information
on the financial stability, creditworthiness or ability of the Tenant to pay the
rent due and owing under the Lease, then Landlord shall be entitled to rely upon
the information provided in determining whether or not to enter into this Lease
Agreement with Tenant and Tenant hereby represents and warrants to Landlord the
following: (i) That all documents provided by Tenant to Landlord are true and
correct copies of the original; and (ii) Tenant has not withheld any information
from Landlord which is material to Tenant's creditworthiness, financial
condition or ability to pay the rent; and (iii) all information supplied by
Tenant to Landlord is true, correct and accurate; and (iv) no part of the
information supplied by Tenant to Landlord contains misleading or fraudulent
statements.

        A default under this paragraph shall be a non-curable default on behalf
of Tenant and Landlord shall be entitled to pursue any right or remedy available
to Landlord under the terms of this Lease or available to Landlord under the
laws of the State of California.

43. HAZARDOUS MATERIALS

        A. As used herein, the term "Hazardous Material" shall mean any
substance or material which has been determined by any state, federal or local
governmental authority to be capable of posing a risk of injury to health,
safety or property including all of those materials and substances designated or
defined as "hazardous" or toxic by (i) the Environmental Protection Agency, the
California Water Quality Control Board, the Department of Labor, the California
Department of

                                      -25-
<PAGE>

Industrial Relations, the Department of Transportation, the Department of
Agriculture, the Consumer Product Safety Commission, the Department of Health
and Human Services, the Food and Drug Agency or any other governmental agency
now or hereafter authorized to regulate materials and substances in the
environment, or by (ii) the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. 9601 et seq., as amended; the Hazardous
Materials Transportation Act, 49 U.S.C. 1801, et seq., as amended; the Resource
Conservation and Recovery Act, 42 U.S.C. 6901, et seq., as amended; the
Hazardous Waste Control Law, California Health & Safety Code 25100 et seq., as
amended; Sections 66680 through 66685 of Title 22 of the California
Administration Code, Division 4, Chapter 30, as amended; and in the regulations
adopted and publications promulgated pursuant to said laws.

        B. Tenant shall not cause or permit any Hazardous Material to be
improperly or illegally used, stored, discharged, released or disposed of in,
from, under or about the Premises or the Complex, or any other land or
improvements in the vicinity of the Premises or the Complex. Without limiting
the generality of the foregoing, Tenant, at its sole cost, shall comply with all
laws relating to Hazardous Materials. If the presence of Hazardous Materials on
the Premises or the Complex caused or permitted by Tenant results in
contamination of the Premises or the Complex or any soil in or about the
Premises or the Complex, Tenant, at its expense shall promptly take all actions
necessary to return the Premises or the Complex to the condition existing prior
to the appearance of such Hazardous Material. The termination of this Lease
shall not terminate or reduce the liability or obligations of Tenant under this
Section, or as may be required by law, to clean up, monitor or remove any
Hazardous Materials from the Premises or the Complex.

        Tenant shall defend, hold harmless and indemnify Landlord and its agents
and employees with respect to all claims, damages and liabilities arising out of
or in connection with any Hazardous Material used, stored, discharged, released
or disposed of in, from, under or about the Premises or the Complex, where said
Hazardous Material is or was attributable to the activities of Tenant, its
agents or contractors during the Lease Term and whether or not Tenant had
knowledge of such Hazardous Material, including, without limitation, any cost of
monitoring or removal, any reduction in the fair market value or fair rental
value of the Premises or the Complex and any loss, claim or demand by any third
person or entity relating to bodily injury or damage to real or personal
property.

        Tenant shall not suffer any lien to be recorded against the Premises or
the Complex as a consequence of a Hazardous Material, including any so called
state, federal or local "super fund" lien related to the "clean up" of a
Hazardous Material in or about the Premises, where said Hazardous Material is or
was attributable to the activities of Tenant.

        C. In the event Hazardous Materials are discovered in or about the
Premises or the Complex, and Landlord has substantial reason to believe that
Tenant was responsible for the presence of the Hazardous Material, then Landlord
shall have the right to appoint a consultant, at Tenant's expense, to conduct an
investigation to determine whether Hazardous Materials are located in or about
the Premises or the Complex and to determine the corrective measures, if any,
required to remove such Hazardous Materials. Tenant, at its expense, shall
comply with all recommendations of the consultant, as required by law. To the
extent it is determined that Tenant was not responsible for the presence of the
Hazardous Materials, then Landlord shall reimburse Tenant for any costs incurred
by Landlord and paid by Tenant under the terms of this Paragraph 45 C of this
Lease.

                                      -26-
<PAGE>

        Tenant shall immediately notify Landlord of any inquiry, test,
investigation or enforcement proceeding by or against Tenant or the Premises or
the Complex concerning a Hazardous Material. Tenant acknowledges that Landlord,
as the owner of the Property, at its election, shall have the sole right, at
Tenant's expense, to negotiate, defend, approve and appeal any action taken or
order issued with regard to a Hazardous Material by an applicable governmental
authority. Provided Tenant is not in default under the terms of this Lease,
Tenant shall likewise have the right to participate in any negotiations,
approvals or appeals of any actions taken or orders issued with regard to the
Hazardous Material and Landlord shall not have the right to bind Tenant in said
actions or orders.

        D. It shall not be unreasonable for Landlord to withhold its consent to
any proposed assignment or subletting if (i) the proposed assignee's or
subtenant's anticipated use of the Premises involves the storage, use or
disposal of Hazardous Material; (ii) if the proposed assignee or subtenant has
been required by any prior landlord, lender or governmental authority to "clean
up" Hazardous Material; (iii) if the proposed assignee or subtenant is subject
to investigation or enforcement order or proceeding by any governmental
authority in connection with the use, disposal or storage of a Hazardous
Material.

        E. Tenant shall surrender the Premises to Landlord, upon the expiration
or earlier termination of the Lease, free of Hazardous Materials which are or
were attributable to Tenant. If Tenant fails to so surrender the Premises,
Tenant shall indemnify and hold Landlord harmless from all damages resulting
from Tenant's failure to surrender the Premises as required by this paragraph,
including, without limitation, any claims or damages in connection with the
condition of the Premises including, without limitation, damages occasioned by
the inability to relet the Premises or a reduction in the fair market and/or
rental value of the Premises or the Complex by reason of the existence of any
Hazardous Materials, which are or were attributable to the activities of Tenant,
in or around the Premises or the Complex.

        Notwithstanding any provision to the contrary in this Lease, if any
action is required to be taken by a governmental authority to clean-up, monitor
or remove any Hazardous Materials, which are or were attributable to the
activities of Tenant, from the Premises or the Complex and such action is not
completed prior to the expiration or earlier termination of the Lease, then at
Landlord's election (i) this Lease shall be deemed renewed for a term commencing
on the expiration date of this Lease and ending on the date the clean-up,
monitoring or removal procedure is completed (provided, however, that the total
Term of this Lease shall not be longer than 34 years and 11 months); or (ii)
Tenant shall be deemed to have impermissibly held over and Landlord shall be
entitled to all damages directly or indirectly incurred in connection with such
holding over, including without limitation damages occasioned by the inability
to relet the Premises or a reduction in the fair market and/or fair rental value
of the Premises or the Complex by reason of the existence of the Hazardous
Material.

        F. Upon the Lease Commencement Date, Tenant shall provide to Landlord a
complete list of all chemicals, toxic waste or Hazardous Materials employed by
Tenant within the Premises. Throughout the Term of the Lease, Tenant shall
continue to update this list of chemicals, contaminants and Hazardous Materials.

                                      -27-
<PAGE>

44. MISCELLANEOUS AND GENERAL PROVISIONS

        a. Tenant shall not, without the written consent of Landlord, use the
name of the Building for any purpose other than as the address of the business
conducted by Tenant in the Premises.

        b. This Lease shall in all respects be governed by and construed in
accordance with the laws of the State of California. If any provision of this
Lease shall be invalid, unenforceable or ineffective for any reason whatsoever,
all other provisions hereof shall be and remain in full force and effect.

        c. The term "Premises" includes the space leased hereby and any
improvements now or hereafter installed therein or attached thereto. The term
"Landlord" or any pronoun used in place thereof includes the plural as well as
the singular and the successors and assigns of Landlord. The term "Tenant" or
any pronoun used in place thereof includes the plural as well as the singular
and individuals, firms, associations, partnerships and corporations, and their
and each of their respective heirs, executors, administrators, successors and
permitted assigns, according to the context hereof, and the provisions of this
Lease shall inure to the benefit of and bind such heirs, executors,
administrators, successors and permitted assigns. The term "person" includes the
plural as well as the singular and individuals, firms, associations,
partnerships and corporations. Words used in any gender include other genders.
If there be more than one Tenant the obligations of Tenant hereunder are joint
and several. The paragraph headings of this Lease are for convenience of
reference only and shall have no effect upon the construction or interpretation
of any provision hereof.

        d. Time is of the essence of this Lease and of each and all of its
provisions.

        e. At the expiration or earlier termination of this Lease, Tenant shall
execute, acknowledge and deliver to Landlord, within ten (10) days after written
demand from Landlord to Tenant, any quitclaim deed or other document required by
any reputable title company, licensed to operate in the State of California, to
remove the cloud or encumbrance created by this Lease from the real property of
which Tenant's Premises are a part.

        f. This instrument along with any exhibits and attachments hereto
constitutes the entire agreement between Landlord and Tenant relative to the
Premises and this agreement and the exhibits and attachments may be altered,
amended or revoked only by an instrument in writing signed by both Landlord and
Tenant. Landlord and Tenant hereby agree that all prior or contemporaneous oral
agreements between and among themselves and their agents or representatives
relative to the leasing of the Premises are merged in or revoked by this
agreement.

        g. Neither Landlord nor Tenant shall record this Lease or a short form
memorandum hereof without the consent of the other.

        h. Tenant further agrees to execute any amendments required by a lender
to enable Landlord to obtain financing, so long as Tenant's rights hereunder are
not substantially affected.

        i. Clauses, plats and riders, if any, signed by Landlord and Tenant and
endorsed on or affixed to this Lease are a part hereof.

                                      -28-
<PAGE>

        j. Tenant covenants and agrees that no diminution or shutting off of
light, air or view by any structure which may be hereafter erected (whether or
not by Landlord) shall in any way affect this Lease, entitle Tenant to any
reduction of rent hereunder or result in any liability of Landlord to Tenant.

                                      -29-
<PAGE>
                                                                   EXHIBIT 10.37

IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this Lease
as of the day and year first above written.

LANDLORD:                              TENANT:
BIV Group                              Cholestech Corporation

By: (Signature Illegible)              By: /s/ Robert J. Dominici
   -------------------------------        --------------------------------------

Title: Managing Partner                Title: Executive Vice President - COO
      ----------------------------           -----------------------------------

Date: July 23, 2001                    Date: July 23, 2001
     -----------------------------          ------------------------------------

<PAGE>
                                                                   EXHIBIT 10.37

                                   EXHIBIT "A"

                            [floor plan of premises]

<PAGE>

                                   EXHIBIT "B"

                           TENANT'S REMOVABLE PROPERTY

        Upon termination of the Lease the following items shall not be
considered a part of the Premises and, in addition to Tenant's moveable
furniture and trade fixtures, may be removed by Tenant upon vacating the
Premises.

1.      Air and nitrogen compressor equipment, hardware, systems, venting,
        support structures, and piping used for factory compressed air and
        nitrogen.

2.      De-ionized water system and piping used in production and laboratory
        processing.

3.      Humidity Controlled Environment system including desiccators, HVAC, and
        support equipment integral to the function of the humidity controlled
        room. Include specially sealed light fixtures (upon vacating: they will
        be replaced with conventional functioning non-sealed light fixtures)

4.      Production line equipment and electrical supply hardware.

5.      Refrigerated storage rooms and equipment.

6.      Fencing, gating, and partitioning fixtures used throughout facility.

7.      Racking, shelving, and conveyors used in and around warehousing
        operation.

8.      Electric "rafter hung" heating panels used for zone heating in
        non-conditioned environment.

9.      Office hardware, marker boards, overhead screens and other office
        fixtures.

10.     Communication hardware, racking, and cabling.

11.     Laboratory furniture, vent hood systems, shelving, hardware, and
        plumbing.

12.     Electricity Generating equipment including 600 kilowatt diesel powered
        generator system, interior and exterior switches, power transmission
        wire, and conduit.

13.     Trade fixtures not listed above.<PAGE>
                                                                     Exhibit 4.2
================================================================================

                             AMERIGAS PARTNERS, L.P.

                             AP EAGLE FINANCE CORP.

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

                                  $200,000,000

                              SERIES A AND SERIES B

                          8-7/8% SENIOR NOTES DUE 2011

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

                                    INDENTURE

                              Dated August 21, 2001

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

                            FIRST UNION NATIONAL BANK

                                     TRUSTEE

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

                                       i
<PAGE>
                              CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
 Trust Indenture Act Section                                   Indenture Section
 ---------------------------                                   -----------------
<S>                                                            <C>
 310(a)(1)................................................          7.10
 (a)(2)...................................................          7.10
 (a)(3)...................................................          N.A.
 (a)(4)...................................................          N.A.
 (a)(5)...................................................          7.10
 (b)......................................................          7.8; 7.10
 (c)......................................................          N.A.
 311(a)...................................................          7.11
 (b)......................................................          7.11
 (c)......................................................          N.A.
 312(a)...................................................          2.5
 (b)......................................................          10.3
 (c)......................................................          10.3
 313(a)...................................................          7.6
 (b)(1)...................................................          N.A.
 (b)(2)...................................................          7.6
 (c)......................................................          7.6
 (d)......................................................          7.6
 314(a)...................................................          4.3; 4.4
 (b)......................................................          N.A.
 (c)(1)...................................................          10.4
 (c)(2)...................................................          10.4
 (c)(3)...................................................          N.A.
 (d)......................................................          10.4
 (e)......................................................          10.5
 (f)......................................................          N.A.
 315(a)...................................................          7.1(2)
 (b)......................................................          7.5
 (c)......................................................          7.1(1)
 (d)......................................................          7.1(3)
 (e)......................................................          6.11
 316(a)(last sentence)....................................          2.9
 (a)(1)(A)................................................          6.5
 (a)(1)(B)................................................          6.4
 (a)(2)...................................................          N.A.
 (b)......................................................          6.7
 (c)......................................................          9.4
 317(a)(1)................................................          6.8
 (a)(2)...................................................          6.9
 (b)......................................................          2.4
 318(a)...................................................          10.1
 (b)......................................................          N.A.
 (c)......................................................          10.1
</TABLE>
-------------------------
N.A. means not applicable

This cross-reference table is not part of the Indenture.

                                       ii
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                     <C>
ARTICLE 1: DEFINITIONS AND INCORPORATION BY REFERENCE                                                   1
         1.1 Definitions............................................................................    1
         1.2 Other Definitions......................................................................   22
         1.3 Incorporation by Reference of Trust Indenture Act......................................   23
         1.4 Rules of Construction..................................................................   23

ARTICLE 2: THE NOTES                                                                                   24
         2.1 Form and Dating........................................................................   24
         2.2 Execution and Authentication...........................................................   24
         2.3 Registrar and Paying Agent.............................................................   25
         2.4 Paying Agent to Hold Money in Trust....................................................   25
         2.5 Holder Lists...........................................................................   26
         2.6 Transfer and Exchange..................................................................   26
         2.7 Replacement Notes......................................................................   33
         2.8 Outstanding Notes......................................................................   33
         2.9 Treasury Notes.........................................................................   34
         2.10 Temporary Notes.......................................................................   34
         2.11 Cancellation..........................................................................   35
         2.12 Defaulted Interest....................................................................   35

ARTICLE 3: REDEMPTION AND OFFERS TO PURCHASE                                                           35
         3.1 Notice to Trustee......................................................................   35
         3.2 Selection of Notes to Be Redeemed......................................................   36
         3.3 Notice of Redemption to Holders........................................................   36
         3.4 Effect of Notice of Redemption.........................................................   38
         3.5 Deposit of Redemption Price............................................................   38
         3.6 Notes Redeemed in Part.................................................................   38
         3.7 Optional Redemption....................................................................   38
         3.8 Mandatory Redemption...................................................................   39
         3.9 Special Mandatory Redemption...........................................................   39
         3.10 Offer to Purchase by Application of Excess Proceeds...................................   39

ARTICLE 4: COVENANTS                                                                                   41
         4.1 Payment of Notes.......................................................................   41
         4.2 Maintenance of Office or Agency........................................................   41
         4.3 Reports................................................................................   42
         4.4 Compliance Certificate.................................................................   42
         4.5 Taxes..................................................................................   43
         4.6 Stay, Extension and Usury Laws.........................................................   43
         4.7 Partnership and Corporate Existence....................................................   43
         4.8 Limitation on Additional Indebtedness..................................................   44
</TABLE>

                                      iii
<PAGE>
<TABLE>
<S>                                                                                                   <C>
         4.9 Limitation on Restricted Payments......................................................   44
         4.10 Limitation on Liens...................................................................   46
         4.11 Limitation on Transactions with Affiliates............................................   46
         4.12 Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries.........   46
         4.13 Limitation on Sale and Leaseback Transactions.........................................   47
         4.14 Limitation on Finance Corp............................................................   47
         4.15 Line of Business......................................................................   48
         4.16 Asset Sales...........................................................................   48
         4.17 Change of Control.....................................................................   49
         4.18. Deposit of Proceeds with the Escrow Agent Pending Consummation of Acquisition........   50

ARTICLE 5: SUCCESSORS                                                                                  51
         5.1 Merger, Consolidation or Sale of Assets................................................   51
         5.2 Successor Person Substituted...........................................................   52

ARTICLE 6: DEFAULTS AND REMEDIES                                                                       52
         6.1 Events of Default......................................................................   52
         6.2 Acceleration...........................................................................   54
         6.3 Other Remedies.........................................................................   54
         6.4 Waiver of Past Defaults................................................................   55
         6.5 Control by Majority....................................................................   55
         6.6 Limitation on Suits....................................................................   55
         6.7 Rights of Holders to Receive Payment...................................................   55
         6.8 Collection Suit by Trustee.............................................................   56
         6.9 Trustee May File Proofs of Claim.......................................................   56
         6.10 Priorities............................................................................   56
         6.11 Undertaking for Costs.................................................................   57

ARTICLE 7: TRUSTEE                                                                                     57
         7.1 Duties of Trustee......................................................................   57
         7.2 Rights of Trustee......................................................................   58
         7.3 Definitive Rights of Trustee...........................................................   59
         7.4 Trustee's Disclaimer...................................................................   59
         7.5 Notice of Defaults.....................................................................   59
         7.6 Reports by Trustee to Holders..........................................................   59
         7.7 Compensation and Indemnity.............................................................   59
         7.8 Replacement of Trustee.................................................................   60
         7.9 Successor Trustee by Merger, etc.......................................................   61
         7.10 Eligibility; Disqualification.........................................................   61
         7.11 Preferential Collection of Claims Against Issuers.....................................   62
</TABLE>

                                       iv
<PAGE>
<TABLE>
<S>                                                                                                     <C>
ARTICLE 8: LEGAL DEFEASANCE AND COVENANT DEFEASANCE                                                     62
         8.1 Option to Effect Legal Defeasance or Covenant Defeasance...............................    62
         8.2 Legal Defeasance and Discharge.........................................................    62
         8.3 Covenant Defeasance....................................................................    62
         8.4 Conditions to Legal Defeasance or Covenant Defeasance..................................    63
         8.5 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
                  Provisions........................................................................    64
         8.6 Repayment to Issuers...................................................................    65
         8.7 Reinstatement..........................................................................    65
         8.8 Discharge of Liability on Securities; Defeasance.......................................    65

ARTICLE 9: AMENDMENTS                                                                                   66
         9.1 Without Consent of Holders.............................................................    66
         9.2 With Consent of Holders................................................................    66
         9.3 Compliance with Trust Indenture Act....................................................    68
         9.4 Relocation and Effect of Consents......................................................    68
         9.5 Notation on or Exchange of Notes.......................................................    68
         9.6 Trustee to Sign Amendments, etc........................................................    69

ARTICLE 10: MISCELLANEOUS                                                                               69
         10.1 Trust Indenture Act Controls..........................................................    69
         10.2 Notices...............................................................................    69
         10.3 Communication by Holders with Other Holders...........................................    70
         10.4 Certificate and Opinion as to Conditions Precedent....................................    70
         10.5 Statements Required in Certificate or Opinion.........................................    71
         10.6 Form of Documents Delivered to Trustee................................................    71
         10.7 Rules by Trustee and Agents...........................................................    72
         10.8 Legal Holidays........................................................................    72
         10.9 No Recourse Against Others............................................................    72
         10.10 Duplicate Originals..................................................................    73
         10.11 Governing Law........................................................................    73
         10.12 No Adverse Interpretation of Other Agreements........................................    73
         10.13 Successors...........................................................................    73
         10.14 Benefits of Indenture................................................................    73
         10.15 Severability.........................................................................    73
         10.16 Counterpart Originals................................................................    74
         10.17 Table of Contents, Headings, etc.....................................................    74
</TABLE>

<TABLE>
<CAPTION>
SIGNATURES

<S>                                                                                                   <C>
EXHIBIT A  FORM OF NOTE                                                                               A-1
EXHIBIT B  CERTIFICATE OF TRANSFEROR                                                                  B-1
EXHIBIT C  CERTIFICATE OF ACCREDITED INSTITUTION                                                      C-1
EXHIBIT D  CERTIFICATE OF REGULATION S TRANSFEROR                                                     D-1
</TABLE>

                                       v
<PAGE>
         INDENTURE, dated August 21, 2001, among AmeriGas Partners, L.P., a
Delaware limited partnership (the "Partnership"), AP Eagle Finance Corp., a
Delaware corporation ("Finance Corp." and, together with the Partnership, the
"Issuers"), and First Union National Bank, as trustee ("Trustee").

         The Issuers and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 8-7/8% Series
A Senior Notes due 2011 (the "Series A Notes") of the Issuers, as joint and
several obligors, the 8-7/8% Series B Senior Notes due 2011 of the Issuers, as
joint and several obligors (the "Series B Notes") and any Additional Notes
issued in compliance with Section 4.8 and the other terms hereof (the Additional
Notes, Series A Notes and Series B Notes are together referred to as the
"Notes").

              ARTICLE 1: DEFINITIONS AND INCORPORATION BY REFERENCE

1.1 Definitions.

         "10% Notes" means the 10% senior notes due April 15, 2006 that are
outstanding on the Issue Date, and any 10% senior notes due April 15, 2006 that
are issued in exchange for such notes.

         10-1/8% Notes" means the 10-1/8% series B senior notes due 2007 that
are outstanding on the Issue Date.

         "10-1/8% Notes Issue Date" means April 19, 1995.

         "Acquired Indebtedness" means, with respect to any specified Person,
(i) Indebtedness of any other Person existing at the time such other Person
merged with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person
and (ii) Indebtedness encumbering any asset acquired by such specified Person.

         "Acquisition" means the acquisition by the Partnership and certain of
its Affiliates of the propane distribution businesses of Columbia Energy Group.

         "Acquisition Agreement" means the purchase agreement among the
Partnership, AmeriGas Propane, L.P., AmeriGas Propane, Inc. and Columbia Energy
Group, Columbia Propane Corporation, Columbia Propane, L.P. and CP Holdings,
Inc. dated as of January 30, 2001, and as amended and restated on August 7,
2001, which sets forth the terms of the Acquisition.

         "Acquisition Facility" means the loan facility of the Operating
Partnership provided for in the Credit Agreement for the purpose of financing
acquisitions.

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

                                       -1-
<PAGE>
otherwise. Notwithstanding the foregoing, the term "Affiliate" shall not include
any Wholly-Owned Restricted Subsidiary.

         "Agent" means any Registrar, Paying Agent or co-registrar.

         "Asset Acquisition" means (a) an Investment by the Partnership or any
Restricted Subsidiary of the Partnership in any other Person pursuant to which
such Person shall become a Restricted Subsidiary of the Partnership, or shall be
merged with or into the Partnership or any Restricted Subsidiary of the
Partnership, (b) the acquisition by the Partnership or any Restricted Subsidiary
of the Partnership of the assets of any Person (other than a Restricted
Subsidiary of the Partnership) which constitute all or substantially all of the
assets of such Person or (c) the acquisition by the Partnership or any
Restricted Subsidiary of the Partnership of any division or line of business of
any Person (other than a Restricted Subsidiary of the Partnership).

         "Attributable Debt" means, with respect to any Sale and Leaseback
Transaction not involving a Capital Lease, as of any date of determination, the
total obligation (discounted to present value at the rate of interest implicit
in the lease included in such transaction) of the lessee for rental payments
(other than amounts required to be paid on account of property taxes,
maintenance, repairs, insurance, assessments, utilities, operating and labor
costs and other items which do not constitute payments for property rights)
during the remaining portion of the term (including extensions which are at the
sole option of the lessor) of the lease included in such transaction (in the
case of any lease which is terminable by the lessee upon the payment of a
penalty, such rental obligation shall also include the amount of such penalty,
but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated).

         "Available Cash," as to any quarter, means: (a) the sum of (i) all cash
of the Partnership, the Operating Partnership and any Subsidiaries thereof,
treated as a single consolidated entity (together the "Partnership Group"), on
hand at the end of such quarter, and (ii) all additional cash of the Partnership
Group on hand on the date of determination of Available Cash with respect to
such quarter resulting from borrowings subsequent to the end of such quarter,
less (b) the amount of cash reserves that is necessary or appropriate in the
reasonable discretion of the General Partner to (i) provide for the proper
conduct of the business of the Partnership Group (including reserves for future
capital expenditures) subsequent to such quarter, (ii) provide funds for
distributions under Sections 5.3(a), (b) and (c) or 5.4(a) of the Partnership
Agreement in respect of any one or more of the next four quarters or (iii)
comply with applicable law or any debt instrument or other agreement or
obligation to which any member of the Partnership Group is a party or its assets
are subject; provided, however, that Available Cash attributable to any
Restricted Subsidiary of the Partnership shall be excluded to the extent
dividends or distributions of such Available Cash by such Restricted Subsidiary
are not at the date of determination permitted by the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or other
regulation.

         "Bank Credit Facilities" means the Acquisition Facility and the
Revolving Loan Facility.

                                       -2-
<PAGE>
         "Board of Directors" means, as applicable, the Board of Directors of
the General Partner, on behalf of the Partnership (or the Partnership if the
Partnership is a corporation), or of Finance Corp., or any authorized committee
of the Board of Directors.

         "Business" means the business of wholesale and retail sales,
distribution and storage of propane gas and related petroleum derivative
products and the retail sale and distribution of propane related supplies and
equipment, including home appliances.

         "Business Day" means any day other than a Legal Holiday.

         "Capital Stock" means, with respect to any Person, any and all shares,
interests, units representing interests, participations, rights in or other
equivalents (however designated) of such Person's capital stock, including, with
respect to partnerships, partnership interests (whether general or limited) and
any other interest or participation that confers upon a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
such partnership, and any rights (other than debt securities convertible into
capital stock), warrants or options exchangeable for or convertible into such
capital stock.

         "Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by such Person (as lessee or
guarantor or other surety) which would, in accordance with GAAP, be required to
be classified and accounted for as a capital lease on a balance sheet of such
Person.

         "Change of Control" means (i) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Partnership or the
Operating Partnership to any Person or group (as such term is used in Section
13(d)(3) of the Exchange Act) other than Permitted Holders or any Person of
which Permitted Holders beneficially own in the aggregate 51% or more of the
Voting Stock, (ii) the merger or consolidation of the Partnership or the
Operating Partnership with another partnership or corporation other than a
Permitted Holder or any Person of which Permitted Holders beneficially own in
the aggregate 51% or more of the Voting Stock, (iii) the liquidation or
dissolution of the Partnership or the General Partner or (iv) the occurrence of
any transaction, the result of which is that Permitted Holders beneficially own
in the aggregate, directly or indirectly, less than 51% of the Voting Stock of
the General Partner.

         "Common Units" means the common units representing limited partner
interests of the Partnership, having the rights and obligations specified with
respect to Common Units of the Partnership.

         "Consolidated Borrowing Base Amount" means an amount equal to the sum
of (i) 70% of the face amount of Eligible Accounts Receivable of the Partnership
and its Restricted Subsidiaries and (ii) 70% of the book value (calculated on a
first in, first out basis) of the consolidated Inventory of the Partnership and
its Restricted Subsidiaries, in each case as determined in accordance with GAAP.
To the extent that information is not available as to the amount of Eligible
Accounts Receivable or Inventory as of a specific date, the Partnership may
utilize the most recent available information for purposes of calculating the
Consolidated Borrowing Base Amount.

                                       -3-
<PAGE>
         "Consolidated Cash Flow Available for Fixed Charges" means, with
respect to the Partnership and its Restricted Subsidiaries for any period, the
sum of, without duplication, the amounts for such period, taken as a single
accounting period, of (a) Consolidated Net Income, (b) Consolidated Non-cash
Charges, (c) Consolidated Interest Expense and (d) Consolidated Income Tax
Expense.

         "Consolidated Fixed Charge Coverage Ratio" means, with respect to the
Partnership and its Restricted Subsidiaries, the ratio of the aggregate amount
of Consolidated Cash Flow Available for Fixed Charges of such Person for the
four full fiscal quarters immediately preceding the date of the transaction (the
"Transaction Date") giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (such four full fiscal quarter period being referred to
herein as the "Four Quarter Period") to the aggregate amount of Consolidated
Fixed Charges of such Person for the Four Quarter Period. In addition to and
without limitation of the foregoing, for purposes of this definition,
"Consolidated Cash Flow Available for Fixed Charges" and "Consolidated Fixed
Charges" shall be calculated after giving effect on a pro forma basis for the
period of such calculation to, without duplication, (a) the incurrence or
repayment of any Indebtedness (other than revolving credit borrowings) of the
Partnership or any of its Restricted Subsidiaries (and, in the case of any
incurrence, the application of the net proceeds thereof) during the period
commencing on the first day of the Four Quarter Period to and including the
Transaction Date (the "Reference Period"), including, without limitation, the
incurrence of the Indebtedness giving rise to the need to make such calculation
(and the application of the net proceeds thereof), as if such incurrence (and
application) occurred on the first day of the Reference Period, and (b) any
Asset Sales or Asset Acquisitions (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of the
Partnership or one of its Restricted Subsidiaries (including any Person who
becomes a Restricted Subsidiary as a result of the Asset Acquisition) incurring,
assuming or otherwise being liable for Acquired Indebtedness) occurring during
the Reference Period, as if such Asset Sale or Asset Acquisition occurred on the
first day of the Reference Period; provided, however, that (i) Consolidated
Fixed Charges shall be reduced by amounts attributable to businesses or assets
that are so disposed of or discontinued only to the extent that the obligations
giving rise to such Consolidated Fixed Charges would no longer be obligations
contributing to the Consolidated Fixed Charges subsequent to the date of
determination of the Consolidated Fixed Charge Coverage Ratio and (ii)
Consolidated Cash Flow Available for Fixed Charges generated by an acquired
business or asset shall be determined by the actual gross profit (revenues minus
cost of goods sold) of such acquired business or asset during the immediately
preceding four full fiscal quarters in the Reference Period minus the pro forma
expenses that would have been incurred by the Partnership and its Restricted
Subsidiaries in the operation of such acquired business or asset during such
period, computed on the basis of personnel expenses for employees retained or to
be retained by the Partnership and its Restricted Subsidiaries in the operation
of the acquired business or asset and non-personnel costs and expenses incurred
by the Partnership and its Restricted Subsidiaries in the operation of the
Partnership's business at similarly situated facilities. Furthermore, in
calculating "Consolidated Fixed Charges" for purposes of determining the
"Consolidated Fixed Charge Coverage Ratio," (i) interest on outstanding
Indebtedness (other than Indebtedness referred to in clause (ii) below)
determined on a fluctuating basis as of the last day of the Four Quarter Period
and which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on such date; (ii) only actual interest payments
associated with Indebtedness incurred in accordance

                                      -4-
<PAGE>
with clauses (e) and (g) of the definition of Permitted Indebtedness, and all
Permitted Refinancing Indebtedness thereof, during the Four Quarter Period shall
be included in such calculation; and (iii) if interest on any Indebtedness
actually incurred on such date may optionally be determined at an interest rate
based upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the last day of the
Four Quarter Period will be deemed to have been in effect during such period.

         "Consolidated Fixed Charges" means, with respect to the Partnership and
its Restricted Subsidiaries for any period, the sum of, without duplication, (a)
the amounts for such period of Consolidated Interest Expense and (b) the product
of (i) the aggregate amount of dividends and other distributions paid or accrued
during such period in respect of Preferred Stock and Redeemable Capital Stock of
the Partnership and its Restricted Subsidiaries on a consolidated basis and (ii)
a fraction, the numerator which is one and the denominator of which is one minus
the then applicable current combined federal, state and local statutory tax
rate, expressed as a percentage.

         "Consolidated Income Tax Expense" means, with respect to the
Partnership and its Restricted Subsidiaries for any period, the provision for
federal, state, local and foreign income taxes of the Partnership and its
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP.

         "Consolidated Interest Expense" means, with respect to the Partnership
and its Restricted Subsidiaries for any period, without duplication, the sum of
(i) the interest expense of the Partnership and its Restricted Subsidiaries for
such period as determined on a consolidated basis in accordance with GAAP,
including, without limitation, (a) any amortization of debt discount, (b) the
net cost under Interest Rate Agreements, (c) the interest portion of any
deferred payment obligation, (d) all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and (e) all accrued interest and (ii) the interest component of Capital Leases
paid, accrued or scheduled to be paid or accrued by the Partnership and its
Restricted Subsidiaries during such period as determined on a consolidated basis
in accordance with GAAP.

         "Consolidated Net Income" means the net income of the Partnership and
its Restricted Subsidiaries, as determined on a consolidated basis in accordance
with GAAP and as adjusted to exclude (i) net after-tax extraordinary gains or
losses, (ii) net after-tax gains or losses attributable to Asset Sales, (iii)
the net income or loss of any Person which is not a Restricted Subsidiary and
which is accounted for by the equity method of accounting, provided that
Consolidated Net Income shall include the amount of dividends or distributions
actually paid to the Partnership or any Restricted Subsidiary, (iv) the net
income or loss prior to the date of acquisition of any Person combined with the
Partnership or any Restricted Subsidiary in a pooling of interest, (v) the net
income of any Restricted Subsidiary to the extent that dividends or
distributions of such net income are not at the date of determination permitted
by the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or other regulation and (vi) the cumulative effect of any
changes in accounting principles.

         "Consolidated Net Worth" means, with respect to the Partnership and its
Restricted Subsidiaries at any date, the consolidated stockholders' equity or
partners' capital of such Person

                                      -5-
<PAGE>
less the amount of such stockholders' equity or partners' capital attributable
to Redeemable Capital Stock of the Partnership and its Restricted Subsidiaries,
as determined in accordance with GAAP.

         "Consolidated Non-cash Charges" means, with respect to the Partnership
and its Restricted Subsidiaries for any period, the aggregate depreciation,
amortization and any other non-cash charges resulting from writedowns in
non-current assets, in each case, reducing Consolidated Net Income of the
Partnership and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.

         "Conveyance and Contribution Agreement" means the Conveyance and
Contribution Agreement, dated as of the 10-1/8% Notes Issue Date, among
Petrolane, the Partnership and the Operating Partnership, together with the
additional conveyance documents and instruments contemplated or referenced
thereunder.

         "Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 10.2 hereof or such other address as to which the
Trustee may give notice to the Issuers.

         "Credit Agreement" means the Credit Agreement, dated as of April 12,
1995, among the Operating Partnership, the General Partner, Petrolane and Bank
of America National Trust and Savings Association, in its individual capacity
and as agent, and the other banks which are or become parties from time to time
thereto, evidencing the Bank Credit Facilities, as it has been and may be
amended, supplemented or otherwise modified from time to time, including all
exhibits and schedules thereto, and any successor or replacement facility
entered into in compliance with this Indenture.

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

         "Definitive Notes" means Notes that are in the form of Exhibit A
attached hereto (but without including the text referred to in footnote 1
thereto).

         "Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.3 hereof as
the Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.

         "Designation Amount" means, with respect to the designation of a
Restricted Subsidiary or a newly acquired or formed Subsidiary as an
Unrestricted Subsidiary, an amount equal to (x) the net book value of all assets
of such Subsidiary at the time of such designation in the case of a Restricted
Subsidiary and (y) the cost of acquisition or formation in the case of a newly
acquired or formed Subsidiary.

         "Disinterested Director" means, with respect to any transaction or
series of transactions with Affiliates, a member of the Board of Directors of
the General Partner who has no financial interest, and whose employer has no
financial interest, in such transaction or series of transactions.

                                      -6-
<PAGE>
         "Eligible Accounts Receivable" means consolidated accounts receivable
of the Partnership and its Restricted Subsidiaries that are no more than 60 days
past due under their scheduled payment terms.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.

         "Escrow Agent" means Boston Safe Deposit and Trust Company or such
successor Escrow Agent as appointed pursuant to the terms of the Escrow
Agreement.

         "Escrow Agreement" means the escrow agreement, dated as of the Issue
Date, by and among the Issuers and the Escrow Agent, regarding the deposit of
the net proceeds from the issuance of the Notes.

         "Event of Default" has the meaning set forth in Section 6.1 hereof.

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

         "Exchange Offer" means the offer by the Issuers to the Holders of all
outstanding Transfer Restricted Securities to exchange all such outstanding
Transfer Restricted Securities held by such Holders for Series B Notes, in an
aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.

         "Exchange Offer Registration Statement" means the registration
statement under the Securities Act relating to the Exchange Offer, including the
related prospectus.

         "Finance Corp." means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.

         "First Mortgage Notes" means:

         (a)      the first mortgage notes, series A through C, issued pursuant
to the note agreements dated as of the 10-1/8% Notes Issue Date;

         (b)      the first mortgage notes, series D, issued pursuant to the
note agreement dated as of March 15, 1999; and

         (c)      the first mortgage notes, series E, issued pursuant to the
note agreement dated as of March 15, 2000;

in each case as these note agreements may be amended, supplemented or otherwise
modified from time to time, including all exhibits and schedules thereto, and as
the Indebtedness evidenced thereby may be extended, renewed, refunded or
refinanced from time to time.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public

                                      -7-
<PAGE>
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States of America, which are applicable from time to time.

         "General Partner" means AmeriGas Propane, Inc., a Pennsylvania
corporation, and any successors in the capacity of general partner of the
Partnership or the Operating Partnership (including, if applicable, more than
one successor in any such capacity at the same time).

         "Global Note" means a Note that is issued in global form in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of the Depositary, and that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in the form of Note attached
hereto as Exhibit A.

         "Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States of America is
pledged.

         "Guaranty" as applied to any Person, any direct or indirect liability,
contingent or otherwise, of such Person with respect to any Indebtedness, lease,
cash dividend or other obligation of another, including, without limitation, (a)
any such obligation directly or indirectly guaranteed or endorsed (otherwise
than for collection or deposit in the ordinary course of business) by such
Person, or in respect of which such Person is otherwise directly or indirectly
liable, (b) any other obligation under any contract which, in economic effect,
is substantially equivalent to a guaranty, including, without limitation, any
such obligation of a partnership in which such Person is a general partner or of
a joint venture in which such Person is a joint venturer, or (c) any obligation
in effect guaranteed by such Person through any agreement (contingent or
otherwise) to purchase, repurchase or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain the solvency or any balance sheet or
other financial condition of the obligor of such obligation, or to make payment
for any products, materials or supplies or for any transportation or services
regardless of the non-delivery or nonfurnishing thereof, in any such case if the
purpose or intent of such agreement is to provide assurance that such obligation
will be paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such obligation will be protected against
loss in respect thereof.

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

         "Indebtedness" means as applied to any Person (without duplication):

         (a) any indebtedness for borrowed money and all obligations evidenced
by any bond, note, debenture or other similar instrument or letter of credit (or
reimbursement agreements in respect thereof) which such Person has directly or
indirectly created, incurred or assumed;

         (b) any indebtedness for borrowed money and all obligations evidenced
by any bond, note, debenture or other similar instrument secured by any Lien in
respect of property owned by such Person, whether or not such Person has assumed
or become liable for the payment of such

                                      -8-
<PAGE>
indebtedness; provided that the amount of such Indebtedness, if such Person has
not assumed the same or become liable therefor, shall in no event be deemed to
be greater than the fair market value from time to time (as determined in good
faith by such Person) of the property subject to such Lien;

         (c) any indebtedness, whether or not for borrowed money (excluding
trade payables and accrued expenses arising in the ordinary course of business),
with respect to which such Person has become directly or indirectly liable and
which represents the deferred purchase price (or a portion thereof) or has been
incurred to finance the purchase price (or a portion thereof) of any property or
service or business acquired by such Person, whether by purchase, consolidation,
merger or otherwise;

         (d) the principal component of any obligations under Capital Leases to
the extent such obligations would, in accordance with GAAP, appear on a balance
sheet of such Person;

         (e) all Attributable Debt of such Person in respect of Sale and
Leaseback Transactions not involving a Capital Lease;

         (f) any indebtedness of the character referred to in clause (a), (b),
(c), (d) or (e) of this definition deemed to be extinguished under GAAP but for
which such Person remains legally liable;

         (g) any indebtedness of any other Person of the character referred to
in clause (a), (b), (c), (d), (e) or (f) of this definition with respect to
which the Person whose Indebtedness is being determined has become liable by way
of a Guaranty;

         (h) all Redeemable Capital Stock of such Person valued at the greater
of its voluntary or involuntary maximum fixed repurchase price plus accrued
dividends;

         (i) any Preferred Stock of any Subsidiary of such Person valued at the
liquidation preference thereof or any mandatory redemption payment obligations
in respect thereof plus, in either case, accrued dividends thereon; and

         (j) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of the types referred to in clauses (a)
through (i) above.

         For purposes hereof, the "maximum fixed repurchase price" of any
Redeemable Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the board of
directors of the issuer of such Redeemable Capital Stock.

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

                                      -9-
<PAGE>

         "Initial Purchasers" means Credit Suisse First Boston Corporation and
Salomon Smith Barney Inc., as initial purchasers in the Offering.

         "Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect the Partnership or any Restricted
Subsidiary from fluctuations in interest rates.

         "Inventory" means goods held by a Person for sale or lease or to be
furnished under contracts of service or if such Person has so furnished them, or
if they are raw materials, work in process materials used or consumed in the
Business or finished inventory of every type or description (including, without
limitation, all liquefied petroleum gas), in each case as would be shown as
inventory on a balance sheet of such Person prepared in accordance with GAAP
consistently applied; and all documents of title covering such inventory, and
shall specifically include all "inventory" as such term is defined in the UCC,
now or hereafter owned by such Person.

         "Investment" means as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of stock or other securities of any
other Person, or any direct or indirect loan, advance or capital contribution by
such Person to any other Person, and any other item which would be classified as
an "investment" on a balance sheet of such Person prepared in accordance with
GAAP, including, without limitation, any direct or indirect contribution by such
Person of property or assets to a joint venture, partnership or other business
entity in which such Person retains an interest (it being understood that a
direct or indirect purchase or other acquisition by such Person of assets of any
other Person (other than stock or other securities) shall not constitute an
"Investment" for purposes of this Indenture). The amount involved in Investments
made during any period shall be the aggregate cost to the Partnership and its
Restricted Subsidiaries of all such Investments made during such period,
determined in accordance with GAAP, but without regard to unrealized increases
or decreases in value, or write-ups, write-downs or write-offs, of such
Investments and without regard to the existence of any undistributed earnings or
accrued interest with respect thereto accrued after the respective dates on
which such Investments were made, less any net return of capital realized during
such period upon the sale, repayment or other liquidation of such Investments
(determined in accordance with GAAP, but without regard to any amounts received
during such period as earnings (in the form of dividends not constituting a
return of capital, interest or otherwise) on such Investments or as loans from
any Person in whom such Investments have been made).

         "Issue Date" means the date on which the Series A Notes are originally
issued.

         "Issuers" means the parties named as such in this Indenture until a
successor replaces either such Issuer pursuant to this Indenture and thereafter
means the remaining Issuer and the successor.

         "Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim, or preference
or priority or other encumbrance upon or with respect to any property of any
kind. A Person shall be deemed to own subject to a Lien any property which such
Person has acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement.

                                      -10-
<PAGE>
         "Liquidated Damages" means all liquidated damages then owing pursuant
to the Registration Rights Agreement.

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

         "Moody's" means Moody's Investors Service, Inc. and its successors.

         "Net Amount of Unrestricted Investment" means, without duplication, the
sum of (x) the aggregate amount of all Investments made after the 10-1/8% Notes
Issue Date pursuant to subdivision (h) of the definition of Permitted
Investments (computed as provided in the last sentence of the definition of
Investment) and (y) the aggregate of all Designation Amounts in connection with
the designation of Unrestricted Subsidiaries less all Designation Amounts in
respect of Unrestricted Subsidiaries which have been designated as Restricted
Subsidiaries and otherwise reduced in a manner consistent with the provisions of
the last sentence of the definition of Investment.

         "Net Proceeds" means, with respect to any Asset Sale or sale of Capital
Stock, the proceeds thereof in the form of cash or cash equivalents including
payments in respect of deferred payment obligations when received in the form of
cash or cash equivalents (except to the extent that such deferred payment
obligations are financed or sold with recourse to the Partnership or any
Restricted Subsidiary of the Partnership) net of (i) brokerage commissions and
other fees and expenses (including, without limitation, fees and expenses of
legal counsel and accountants and fees, expenses and discounts or commissions of
underwriters, placement agents and investment bankers) related to such Asset
Sale, (ii) provisions for all taxes payable as a result of such Asset Sale,
(iii) amounts required to be paid to any Person (other than the Partnership or
any Restricted Subsidiary of the Partnership) owning a beneficial interest in
the assets subject to such Asset Sale, (iv) appropriate amounts to be provided
by the Partnership or any Restricted Subsidiary of the Partnership, as the case
may be, as a reserve required in accordance with GAAP against any liabilities
associated with such Asset Sale and retained by the Partnership or any
Restricted Subsidiary of the Partnership, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale and (v) amounts
required to be applied to the repayment of Indebtedness secured by a Lien on the
asset or assets sold in such Asset Sale.

         "Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.

         "Notes" means the Issuers' Series A Notes, Series B Notes and
Additional Notes, if any.

         "Offering" means the offering of the Series A Notes pursuant to the
Offering Memorandum.

                                      -11-
<PAGE>
         "Offering Memorandum" means the offering circular of the Issuers, dated
August 16, 2001, relating to the Offering.

         "Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person; provided, however, that any
reference to an Officer with respect to the Partnership shall mean the
respective Officer of the General Partner.

         "Officers' Certificate" means a certificate signed on behalf of (i) the
General Partner (acting on behalf of the Partnership) by two Officers of the
General Partner, one of whom must be the principal executive officer, the
principal financial officer, the treasurer or the principal accounting officer
of the General Partner, or (ii) Finance Corp. by two Officers of Finance Corp.,
one of whom must be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of Finance Corp., in
either case that meets the requirements of Section 10.5 hereof.

         "Operating Partnership" means AmeriGas Propane, L.P., a Delaware
limited partnership, and its successors.

         "Operating Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of the Operating Partnership, as in effect on
the Issue Date, and as the same may from time to time be amended, supplemented
or otherwise modified in accordance with the terms thereof.

         "Operative Agreements" means the Partnership Agreement, the Operating
Partnership Agreement and the other agreements entered into between the
Partnership or the Operating Partnership and any of their respective Affiliates
(including the General Partner) on the 10-1/8% Notes Issue Date.

         "Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
10.5 hereof. The counsel may be an employee of or counsel to the Partnership,
the General Partner, Finance Corp., UGI, any of their respective Subsidiaries or
the Trustee.

         "Partnership" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.

         "Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Partnership, as in effect on the Issue Date, and as
the same may from time to time be amended, supplemented or otherwise modified in
accordance with the terms thereof.

         "Permitted Holders" mean UGI and its Subsidiaries.

         "Permitted Indebtedness" means any of the following:

                                      -12-
<PAGE>
         (a) Indebtedness of the Issuers evidenced by the Notes (other than
Additional Notes);

         (b) Indebtedness of the Partnership and AmeriGas Eagle Finance Corp.
evidenced by the 10% Notes;

         (c) Indebtedness outstanding on the 10-1/8% Notes Issue Date;

         (d) Indebtedness of the Operating Partnership evidenced by the First
Mortgage Notes; provided that the aggregate principal amount (exclusive of any
unamortized premium) of such Indebtedness outstanding at any time may not exceed
$518 million;

         (e) Indebtedness of the Partnership or a Restricted Subsidiary incurred
(A) for the making of expenditures for the improvement or repair of (to the
extent such improvements or repairs may be capitalized on the books of such
Person in accordance with GAAP) or additions to (including additions by way of
acquisitions of businesses and related assets) the property and assets of the
Partnership and its Restricted Subsidiaries (including, without limitation,
Indebtedness incurred under the Acquisition Facility) or (B) by assumption in
connection with additions (including additions by way of acquisition or capital
contributions of businesses and related assets) to the property and assets of
the Partnership and its Restricted Subsidiaries; provided that the aggregate
principal amount of such Indebtedness outstanding at any time may not exceed $75
million;

         (f) Indebtedness of the Partnership or a Restricted Subsidiary incurred
for any purpose permitted under the Revolving Loan Facility; provided that the
aggregate principal amount of such Indebtedness outstanding at any time may not
exceed an amount equal to the greater of (i) $175 million and (ii) the
Consolidated Borrowing Base Amount; and provided, further, that the outstanding
balance of such Indebtedness shall not exceed 50% of such greater amount for 30
consecutive days during each fiscal year;

         (g) Indebtedness of the Partnership owing to the General Partner or an
Affiliate of the General Partner that is unsecured and that is Subordinated
Indebtedness; provided that the aggregate principal amount of such Indebtedness
outstanding at any time may not exceed $50 million;

         (h) Indebtedness of the Partnership or a Restricted Subsidiary for the
purpose of the payment of certain liabilities of Petrolane; provided that the
aggregate amount of such Indebtedness outstanding at any time may not exceed $30
million;

         (i) Indebtedness owed by the Partnership or any Restricted Subsidiary
to any Wholly-Owned Restricted Subsidiary;

         (j) Indebtedness under Interest Rate Agreements;

         (k) Permitted Refinancing Indebtedness;

                                      -13-
<PAGE>
         (l) the incurrence by the Partnership or a Restricted Subsidiary of
Indebtedness owing directly to its insurance carriers (without duplication) in
connection with the Partnership's, its Subsidiaries' or its Affiliates'
self-insurance programs or other similar forms of retained insurable risks for
their respective businesses, consisting of reinsurance agreements and
indemnification agreements (and guarantees of the foregoing) secured by letters
of credit; provided that any Consolidated Fixed Charges associated with the
Indebtedness evidenced by such reinsurance agreements, indemnification
agreements, guarantees and letters of credit shall be included (without
duplication) in any determination of the Consolidated Fixed Charge Coverage
Ratio test set forth in Section 4.8 hereof;

         (m) Indebtedness of the Partnership and its Restricted Subsidiaries in
respect of Capital Leases; provided that the aggregate amount of such
Indebtedness outstanding at any time may not exceed $10 million;

         (n) Indebtedness of the Partnership and its Restricted Subsidiaries
represented by letters of credit supporting (i) obligations under workmen's
compensation laws, (ii) obligations to suppliers of propane; provided that the
aggregate amount of such Indebtedness outstanding at any time may not exceed $15
million and (iii) the repayment of Permitted Indebtedness; or

         (o) surety bonds and appeal bonds required in the ordinary course of
business or in connection with the enforcement of rights or claims of the
Partnership or any of its Subsidiaries or in connection with judgments that do
not result in a Default or Event of Default.

         "Permitted Investments" means any of the following:

         (a) Investments made or owned by the Partnership or any Restricted
Subsidiary in (i) marketable obligations issued or unconditionally guaranteed by
the United States of America, or issued by any agency thereof and backed by the
full faith and credit of the United States, in each case maturing one year or
less from the date of acquisition thereof, (ii) marketable direct obligations
issued by any state of the United States of America or any political subdivision
of any such state or any public instrumentality thereof maturing within one year
from the date of acquisition thereof and having as at such date the highest
rating obtainable from either S&P or Moody's, (iii) commercial paper maturing no
more than 270 days from the date of creation thereof and having as at the date
of acquisition thereof one of the two highest ratings obtainable from either S&P
or Moody's, (iv) certificates of deposit maturing one year or less from the date
of acquisition thereof issued by commercial banks incorporated under the laws of
the United States of America or any state thereof or the District of Columbia or
Canada, (A) the commercial paper or other short term unsecured debt obligations
of which are as at such date rated either A-2 or better (or comparably if the
rating system is changed) by S&P or Prime-2 or better (or comparably if the
rating system is changed) by Moody's or (B) the long-term debt obligations of
which are as at such date rated either A or better (or comparably if the rating
system is changed) by either S&P or Moody's ("Permitted Banks"), (v) Eurodollar
time deposits having a maturity of less than 270 days from the date of
acquisition thereof purchased directly from any Permitted Bank, (vi) bankers'
acceptances eligible for rediscount under requirements of The Board of Governors
of the Federal Reserve System and accepted by Permitted Banks, and (vii)
obligations of the type described in clause (i), (ii), (iii), (iv) or (v) above
purchased from a securities dealer

                                      -14-
<PAGE>
designated as a "primary dealer" by the Federal Reserve Bank of New York or from
a Permitted Bank as counterparty to a written repurchase agreement obligating
such counterparty to repurchase such obligations not later than 14 days after
the purchase thereof and which provides that the obligations which are the
subject thereof are held for the benefit of the Partnership or a Restricted
Subsidiary by a custodian which is a Permitted Bank and which is not a
counterparty to the repurchase agreement in question;

         (b) the acquisition by the Partnership or any Restricted Subsidiary of
Capital Stock or other ownership interests, whether in a single transaction or
in a series of related transactions, of a Person located in the United States or
Canada and engaged in substantially the same business as the Partnership such
that, upon the completion of such transaction or series of transactions, such
Person becomes a Restricted Subsidiary;

         (c) subject to the provisions of subdivision (h) below, the making or
ownership by the Partnership or any Restricted Subsidiary of Investments (in
addition to Investments permitted by subdivisions (a), (b), (d), (e), (f) and
(g)) in any Person incorporated or otherwise formed pursuant to the laws of the
United States or Canada or any state thereof which is engaged in the United
States or Canada in substantially the same business as the Partnership; provided
that the aggregate amount of all such Investments made by the Partnership and
its Restricted Subsidiaries following the 10-1/8% Notes Issue Date and
outstanding pursuant to this subdivision (c) and subdivision (h) below shall not
at any date of determination exceed 10% of Total Assets (the "Investment
Limit"); provided that, in addition to Investments that would be permitted under
the Investment Limit, during any fiscal year the Partnership and its Restricted
Subsidiaries may invest up to $25,000,000 (the "Annual Limit") pursuant to the
provisions of this subdivision (c), but the unused amount of the Annual Limit
shall not be carried over to any future years;

         (d) the making or ownership by the Partnership or any Restricted
Subsidiary of Investments (x) arising out of loans and advances to employees
incurred in the ordinary course of business, (y) arising out of extensions of
trade credit or advances to third parties in the ordinary course of business and
(z) acquired by reason of the exercise of customary creditors' rights upon
default or pursuant to the bankruptcy, insolvency or reorganization of a debtor;

         (e) the creation or incurrence of liability by the Partnership or any
Restricted Subsidiary with respect to any Guaranty constituting an obligation,
warranty or indemnity, not guaranteeing Indebtedness of any Person, which is
undertaken or made in the ordinary course of business;

         (f) the creation or incurrence of liability by the Partnership or any
Restricted Subsidiary with respect to any Interest Rate Agreements;

         (g) the making by any Restricted Subsidiary of Investments in the
Partnership or another Restricted Subsidiary;

         (h) the making or ownership by the Partnership or any Restricted
Subsidiary of Investments in Unrestricted Subsidiaries; provided that the Net
Amount of Unrestricted

                                      -15-
<PAGE>
Investment shall not at any time exceed $5,000,000 (and subject to the
limitations specified in subdivision (c) above); and

         (i) the making or ownership by the Partnership or any Restricted
Subsidiary of Investments in the Operating Partnership.

         "Permitted Liens" means any of the following:

         (a) Liens for taxes, assessments or other governmental charges the
payment of which is not yet due and is being contested in good faith by
appropriate proceedings promptly initiated and diligently conducted and as to
which reserves or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor and be adequate in the good faith judgment of
the obligor;

         (b) Liens of lessors, landlords and carriers, vendors, warehousemen,
mechanics, materialmen, repairmen and other like Liens incurred in the ordinary
course of business for sums not yet due or the payment of which is being
contested in good faith by appropriate proceedings promptly initiated and
diligently conducted and as to which reserves or other appropriate provision, if
any, as shall be required by GAAP shall have been made therefor and be adequate
in the good faith judgment of the obligor, in each case (i) not incurred or made
in connection with the borrowing of money, the obtaining of advances or credit
or the payment of the deferred purchase price of property or (ii) incurred in
the ordinary course of business securing the unpaid purchase price of property
or services constituting current accounts payable;

         (c) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (i) in connection with workers'
compensation, unemployment insurance and other types of social security or (ii)
to secure (or to obtain letters of credit that secure) the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
performance bonds, purchase, construction or sales contracts and other similar
obligations, in each case not incurred or made in connection with the borrowing
of money;

         (d) other deposits made to secure liability to insurance carriers under
insurance or self-insurance arrangements;

         (e) Liens securing reimbursement obligations under letters of credit;
provided in each case that such Liens cover only the title documents and related
goods (and any proceeds thereof) covered by the related letter of credit;

         (f) any attachment or judgment Lien, unless the judgment it secures
shall not, within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal or review, or shall not have been
discharged within 60 days after expiration of any such stay;

         (g) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, which, in each case
either (i) are granted, entered into or created in the ordinary course of the
business of the Partnership or any Restricted Subsidiary or (ii) do not
materially impair the value or intended use of the property covered thereby;

                                      -16-
<PAGE>
         (h) Liens on property or assets of any Restricted Subsidiary securing
Indebtedness of such Restricted Subsidiary owing to the Partnership or a
Wholly-Owned Restricted Subsidiary;

         (i) Liens on assets of the Partnership or any Restricted Subsidiary
existing on the 10-1/8% Notes Issue Date;

         (j) Liens securing Indebtedness evidenced by the First Mortgage Notes
(or any extension, renewal, refunding or refinancing of any such Indebtedness);

         (k) Liens securing Indebtedness incurred under the Acquisition Facility
(or any extension, renewal, refunding or refinancing of any such Indebtedness);

         (l) Liens securing Indebtedness incurred under the Revolving Loan
Facility (or any extension, renewal, refunding or refinancing of any such
Indebtedness);

         (m) Liens (other than the Liens referred to in clauses (k) and (l)
above) securing Indebtedness incurred in accordance with (i) clause (e) of the
definition of Permitted Indebtedness, (ii) clauses (f) and (h) of the definition
of Permitted Indebtedness or (iii) Indebtedness otherwise permitted to be
incurred under Section 4.8 hereof to the extent incurred (A) to finance the
making of expenditures for the improvement or repair (to the extent such
improvements and repairs may be capitalized on the books of the Partnership and
the Restricted Subsidiaries in accordance with GAAP) of or additions (including
additions by way of acquisitions of businesses and related assets) to the assets
and property of the Partnership and its Restricted Subsidiaries, or (B) by
assumption in connection with additions (including additions by way of
acquisition or capital contributions of business and related assets) to the
property and assets of the Partnership and its Restricted Subsidiaries; provided
that in the case of Indebtedness incurred in accordance with clauses (i) or
(iii), the principal amount of such Indebtedness does not exceed the lesser of
the cost to the Partnership and the Restricted Subsidiaries of such additional
property or assets and the fair market value of such additional property or
assets at the time of the acquisition thereof (as determined in good faith by
the General Partner);

         (n) Liens existing on any property of any Person at the time it becomes
a Subsidiary of the Partnership, or existing at the time of acquisition upon any
property acquired by the Partnership or any such Subsidiary through purchase,
merger or consolidation or otherwise, whether or not assumed by the Partnership
or such Subsidiary, or created to secure Indebtedness incurred to pay all or any
part of the purchase price (a "Purchase Money Lien") of property (including,
without limitation, Capital Stock and other securities) acquired by the
Partnership or a Restricted Subsidiary; provided that (i) any such Lien shall be
confined solely to such item or items of property and, if required by the terms
of the instrument originally creating such Lien, other property which is an
improvement to or is acquired for use specifically in connection with such
acquired property, (ii) in the case of a Purchase Money Lien, the principal
amount of the Indebtedness secured by such Purchase Money Lien shall at no time
exceed an amount equal to the lesser of (A) the cost to the Partnership and the
Restricted Subsidiaries of such property and (B) the fair market value of such
property at the time of the acquisition thereof (as determined in good faith by
the General Partner), (iii) any such Purchase Money Lien shall be created not
later

                                      -17-
<PAGE>
than 30 days after the acquisition of such property and (iv) any such Lien
(other than a Purchase Money Lien) shall not have been created or assumed in
contemplation of such Person's becoming a Subsidiary of the Partnership or such
acquisition of property by the Partnership or any Subsidiary;

         (o) easements, exceptions or reservations in any property of the
Partnership or any Restricted Subsidiary granted or reserved for the purpose of
pipelines, roads, the removal of oil, gas, coal or other minerals, and other
like purposes, or for the joint or common use of real property, facilities and
equipment, which are incidental to, and do not materially interfere with, the
ordinary conduct of the business of the Partnership or any Restricted
Subsidiary;

         (p) Liens arising from or constituting permitted encumbrances under the
agreements and instruments securing the obligations under the First Mortgage
Notes and the Bank Credit Facilities; and

         (q) any Lien renewing or extending any Lien permitted by subdivision
(i), (j), (k), (l), (m) or (n); provided that (i) the principal amount of the
Indebtedness secured by any such Lien shall not exceed the principal amount of
such Indebtedness outstanding immediately prior to the renewal or extension of
such Lien, and (ii) no assets encumbered by any such Lien other than the assets
encumbered immediately prior to such renewal or extension shall be encumbered
thereby.

         "Permitted Refinancing Indebtedness" means Indebtedness incurred by the
Partnership or any Restricted Subsidiary to substantially concurrently
(excluding any notice period on redemptions) repay, refund, renew, replace,
extend or refinance, in whole or in part, any Permitted Indebtedness of the
Partnership or any Restricted Subsidiary or any other Indebtedness incurred by
the Partnership or any Restricted Subsidiary pursuant to Section 4.8 hereof, to
the extent (i) the principal amount of such Permitted Refinancing Indebtedness
does not exceed the principal or accreted amount plus the amount of accrued and
unpaid interest of the Indebtedness so repaid, refunded, renewed, replaced,
extended or refinanced (except that, in the case of the Notes, such Permitted
Refinancing Indebtedness may include the redemption premium set forth in Section
3.7 hereof, in the case of the 10-1/8% Notes, such Permitted Refinancing
Indebtedness may include the redemption premium set forth in Section 3.7 of the
indenture governing the 10-1/8% Notes and, in the case of the First Mortgage
Notes, such Permitted Refinancing Indebtedness may include the amount of any
unamortized premium thereon), (ii) with respect to the repayment, refunding,
renewal, replacement, extension or refinancing of Indebtedness of the Issuers,
the Permitted Refinancing Indebtedness ranks no more favorably in right of
payment with respect to the Notes than the Indebtedness so repaid, refunded,
renewed, replaced, extended or refinanced, and (iii) with respect to the
repayment, refunding or refinancing of Indebtedness of the Issuers, the
Permitted Refinancing Indebtedness has a Weighted Average Life to Stated
Maturity and Stated Maturity equal to, or greater than, and has no fixed
mandatory redemption or sinking fund requirement in an amount greater than or at
a time prior to the amounts set forth in, the Indebtedness so repaid, refunded,
renewed, replaced, extended or refinanced; provided, however, that Permitted
Refinancing Indebtedness shall not include Indebtedness incurred by a Restricted
Subsidiary to repay, refund, renew, replace, extend or refinance Indebtedness of
the Partnership.

                                      -18-
<PAGE>
         "Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, charitable
foundation, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.

         "Petrolane" means Petrolane Incorporated, a Pennsylvania corporation,
and its successors.

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

         "Redeemable Capital Stock" means any shares of any class or series of
Capital Stock, that, either by the terms thereof, by the terms of any security
into which it is convertible or exchangeable or by contract or otherwise, is or
upon the happening of an event or passage of time would be, required to be
redeemed prior to the Stated Maturity with respect to the principal of any Note
or is redeemable at the option of the holder thereof at any time prior to the
Stated Maturity of the Notes, or is convertible into or exchangeable for debt
securities at any time prior to the Stated Maturity of the Notes.

         "Registration Rights Agreement" means (1) the Registration Rights
Agreement, dated as of the Issue Date, among the Issuers and the Initial
Purchasers and (2) any future registration rights agreement executed by the
Issuers in connection with the issuance of Additional Notes under this
Indenture.

         "Responsible Officer" when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee (or any successor
of the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.

         "Restricted Subsidiary" means a Subsidiary of the Partnership, which,
as of the date of determination, is not an Unrestricted Subsidiary of the
Partnership.

         "Revolving Loan Facility" means the revolving loan facility of the
Operating Partnership provided for in the Credit Agreement.

         "S&P" means Standard & Poor's Ratings Group, and its successors.

         "Sale and Leaseback Transaction" of any Person (a "Transferor") means
any arrangement (other than between the Partnership and a Wholly-Owned
Restricted Subsidiary or between Wholly-Owned Restricted Subsidiaries) whereby
(a) property (the "Subject Property") has been or is to be disposed of by such
Transferor to any other Person with the intention on the part of such Transferor
of taking back a lease of such Subject Property pursuant to which the rental
payments are calculated to amortize the purchase price of such Subject Property
substantially over the useful

                                      -19-
<PAGE>
life of such Subject Property, and (b) such Subject Property is in fact so
leased by such Transferor or an Affiliate of such Transferor.

         "SEC" means the Securities and Exchange Commission.

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

         "Series A Notes" means the Issuers' 8-7/8% Series A Senior Notes due
2011 to be issued pursuant to this Indenture.

         "Series B Notes" means the Issuers' 8-7/8% Series B Senior Notes due
2011 to be issued pursuant to this Indenture in the Exchange Offer.

         "Significant Subsidiary" shall have the same meaning as in Rule 1.02(v)
of Regulation S-X under the Securities Act.

         "Special Mandatory Redemption" means a redemption of the Notes by the
Issuers pursuant to Section 3.9 hereof.

         "Special Mandatory Redemption Event" means the earlier to occur of (1)
the 91st day following the Issue Date or (2) the date of termination of the
Acquisition Agreement, in either case if the Acquisition has not then been
completed.

         "Stated Maturity" means, (i) when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and (ii) when used with respect to any other Indebtedness, means
the date or dates specified in the instrument governing such Indebtedness as the
fixed date or dates on which each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect of such Indebtedness, or any installment of interest
thereon, is due and payable.

         "Subordinated Indebtedness" means Indebtedness of the Partnership which
is expressly subordinated in right of payment to the Notes.

         "Subsidiary" means, with respect to any Person, (i) a corporation a
majority of whose Voting Stock (or, in the case of a partnership, a majority of
the partners' Capital Stock, considering all partners' Capital Stock as a single
class) is at the time, directly or indirectly, owned by such Person, by one or
more Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof and (ii) any other Person, including, without limitation, a joint
venture, in which such Person, one or more Subsidiaries thereof or such Person
and one or more Subsidiaries thereof, directly or indirectly, at the date of
determination thereof, has at least majority ownership interest entitled to vote
in the election of directors, managers, general partners or trustees thereof (or
other Person performing similar functions) or, if such Persons are not elected,
to vote on any matter that is submitted to the vote of all Persons holding
ownership interests in such entity. For purposes of this definition, any
directors' qualifying shares or investments by foreign nationals mandated by
applicable law shall be disregarded in determining the ownership of a
Subsidiary.

                                      -20-
<PAGE>
         "TIA" means the Trust Indenture Act of 1939, as in effect on the date
this Indenture is qualified under the TIA, except as provided in Section 9.3
hereof.

         "Total Assets" means as of any date of determination, the consolidated
total assets of the Partnership and the Restricted Subsidiaries as would be
shown on a consolidated balance sheet of the Partnership and the Restricted
Subsidiaries prepared in accordance with GAAP as of that date.

         "Transfer Restricted Securities" has the meaning ascribed to such term
in the Registration Rights Agreement.

         "Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.

         "UCC" means the Uniform Commercial Code as it may be from time to time
in effect in the State of New York.

         "UGI" means UGI Corporation, a Pennsylvania corporation, and its
successors.

         "Unrestricted Subsidiary" means any Subsidiary of the Partnership or a
Restricted Subsidiary that is designated as such by the General Partner;
provided that no portion of the Indebtedness or any other obligation (contingent
or otherwise) of such Subsidiary (a) is guaranteed by the Partnership or any
Restricted Subsidiary, (b) is recourse to or obligates the Partnership or any
Restricted Subsidiary in any way or (c) subjects any property or assets of the
Partnership or any Restricted Subsidiary, directly or indirectly, contingently
or otherwise, to the satisfaction thereof. Notwithstanding the foregoing, the
Partnership or a Restricted Subsidiary may Guaranty or agree to provide funds
for the payment or maintenance of, or otherwise become liable with respect to
Indebtedness of an Unrestricted Subsidiary; but only to the extent that the
Partnership or a Restricted Subsidiary would be permitted to (a) make an
Investment in such Unrestricted Subsidiary pursuant to subdivision (h) of the
definition of Permitted Investments and (b) incur the Indebtedness represented
by such Guaranty or agreement pursuant to the first paragraph of Section 4.8
hereof. The Board of Directors may designate an Unrestricted Subsidiary to be a
Restricted Subsidiary, provided that immediately after giving effect to such
designation, (i) there exists no Event of Default or event which after notice or
lapse of time or both would become an Event of Default and (ii) if such
Unrestricted Subsidiary has, as of the date of such designation, outstanding
Indebtedness (other than Permitted Indebtedness) the Partnership could incur at
least $1.00 of Indebtedness (other than Permitted Indebtedness). Notwithstanding
the foregoing, (i) no Subsidiary may be designated an Unrestricted Subsidiary if
such Subsidiary, directly or indirectly, holds capital stock of a Restricted
Subsidiary and (ii) neither the Operating Partnership nor Finance Corp. may be
designated an Unrestricted Subsidiary.

         "Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers,
general partners or trustees of any Person (irrespective of whether or not, at
the time, Capital Stock of any other class or classes shall have, or might have,
voting

                                      -21-
<PAGE>
power by reason of the happening of any contingency) or, with respect to a
partnership (whether general or limited), any general partner interest in such
partnership.

         "Weighted Average Life to Stated Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness; provided, however, that with respect to any
revolving Indebtedness, the foregoing calculation of Weighted Average Life to
Stated Maturity shall be determined based upon the total available commitments
and the required reductions of commitments in lieu of the outstanding principal
amount and the required payments of principal, respectively.

         "Wholly-Owned Restricted Subsidiary" means the Operating Partnership or
any Subsidiary of the Partnership of which 100% of the outstanding Capital Stock
is owned by the Partnership or by one or more Wholly-Owned Restricted
Subsidiaries of the Partnership or by the Partnership and one or more
Wholly-Owned Restricted Subsidiaries of the Partnership. For purposes of this
definition, any directors' qualifying shares or investments by foreign nationals
mandated by applicable law shall be disregarded in determining the ownership of
a Subsidiary.

1.2 Other Definitions.

<TABLE>
<CAPTION>
        Term                                                        Defined in Section
        ----                                                        ------------------
<S>                                                                 <C>
        "Additional Notes"                                                 2.2
        "Asset Sale"                                                       4.16
        "Asset Sale Offer"                                                 4.16
        "Bankruptcy Law"                                                   6.1
        "Change of Control Offer"                                          4.17
        "Change of Control Payment"                                        4.17
        "Change of Control Payment Date"                                   4.17
        "Covenant Defeasance"                                              8.3
        "Custodian"                                                        6.1
        "Excess Proceeds"                                                  4.16
        "incur"                                                            4.8
        "Legal Defeasance"                                                 8.2
        "Legal Holiday"                                                    10.8
        "Offer Amount"                                                     3.10
        "Offer Period"                                                     3.10
        "Paying Agent"                                                     2.3
        "Payment Restrictions                                              4.12
        "Purchase Date"                                                    3.10
        "Registrar"                                                        2.3
        "Restricted Payments"                                              4.9
</TABLE>

                                      -22-
<PAGE>
1.3 Incorporation by Reference of Trust Indenture Act.

         Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.

         The following TIA terms used in this Indenture have the following
meanings:

         "indenture securities" means the Notes;

         "indenture security holder" means a Holder of Notes;

         "indenture to be qualified" means this Indenture;

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

         "obligor" on the Notes means the Issuers, as joint and several
obligors, or any successor obligor upon the Notes.

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

1.4 Rules of Construction.

         Unless the context otherwise requires:

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

         (2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles in the United
States;

         (3) references to "generally accepted accounting principles" shall mean
generally accepted accounting principles in effect in the United States as of
the date hereof, or as of the date such principles are to be applied, as the
context may require;

         (4) "or" is not exclusive;

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

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

         (7) references to sections of or rules under the Securities Act or the
Exchange Act shall be deemed to include substitute, replacement or successor or
rules adopted by the SEC from time to time.

                                      -23-
<PAGE>
                              ARTICLE 2: THE NOTES

                                    THE NOTES

2.1 Form and Dating.

         The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, the terms of which are incorporated in
and made a part of this Indenture; provided, however, that Additional Notes
issued from time to time in accordance with this Indenture may contain such
changes as to form as are appropriate. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Note shall be
dated the date of its authentication. The Notes shall be in face denominations
of $1,000 and integral multiples thereof.

         The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture, and the Issuers and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.

         The Notes will initially be issued in global form, substantially in the
form of Exhibit A attached hereto (including footnote 1 thereto) and in
definitive form, substantially in the form of Exhibit A hereto (not including
footnote 1 thereto). The Global Notes shall represent such of the outstanding
Notes as shall be specified therein and shall provide that it shall represent
the aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee in accordance with instructions given by the Holder
thereof as required by Section 2.6 hereof.

2.2 Execution and Authentication.

         An Officer of each of the General Partner, on behalf of the Partnership
(or the Partnership, if the Partnership is a corporation), and of Finance Corp.
shall sign the Notes for each of the Partnership and Finance Corp. by manual or
facsimile signature. The seal of Finance Corp. shall be reproduced on the Notes
and may be in facsimile form.

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

         A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature of the Trustee shall be conclusive evidence that
the Note has been authenticated under this Indenture.

         The Trustee shall, upon a written order of the Issuers signed by an
Officer of each of the General Partner, on behalf of the Partnership (or the
Partnership, if the Partnership is a corporation), and of Finance Corp.,
authenticate Notes for original issue of an aggregate amount of $200,000,000.

                                      -24-
<PAGE>
         The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same right as an
Agent to deal with the Issuers or an Affiliate of the Issuers.

         Subject to compliance with Section 4.8 and the other terms of this
Indenture, the Issuers are permitted to issue more notes after the Issue Date
("Additional Notes") under this Indenture in an unlimited amount. The Series A
Notes, the Series B Notes and Additional Notes subsequently issued under this
Indenture shall be treated as a single class for all purposes under this
Indenture, including, without limitation, waivers, amendments, redemptions and
offers to purchase.

2.3 Registrar and Paying Agent.

         The Issuers shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Issuers may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agents. The Issuers may change any
Paying Agent or Registrar without notice to any Holder. The Issuers shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Issuers fail to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation in accordance with Section 7.7 hereof. The Partnership, Finance
Corp. or any of their Subsidiaries may act as Paying Agent or Registrar.

         The Issuers shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Issuers initially appoint The Depository Trust Company
to act as Depositary with respect to the Global Notes.

         The Issuers initially appoint the Trustee to act as the Registrar and
Paying Agent and agent for service of notices and demands in connection with the
Notes.

2.4 Paying Agent to Hold Money in Trust.

         The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, or interest on, or Liquidated Damages with
respect to, the Notes, and will notify the Trustee of any Default by the Issuers
in making any such payment. While any such Default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Issuers
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Issuers or any of their Subsidiaries) shall have no other liability for the

                                      -25-
<PAGE>
money. If either Issuer or any of their subsidiaries acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent.

2.5 Holder Lists.

         The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is
not the Registrar, the Issuers shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, including
the aggregate principal amount of Notes held by each Holder, and the Issuers
shall otherwise comply with TIA Section 312(a).

2.6 Transfer and Exchange.

         (a) Transfer and Exchange of Definitive Notes. When Definitive Notes
are presented to the Registrar with the request:

                  (x)      to register the transfer of the Definitive Notes, or

                  (y)      to exchange such Definitive Notes for an equal
                           principal amount of Definitive Notes of other
                           authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if
its requirement for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for registration of transfer or
exchange:

         (i)      shall be duly endorsed or accompanied by a written instruction
                  of transfer in form satisfactory to the Registrar duly
                  executed by the Holder thereof or by his attorney, duly
                  authorized in writing; and

         (ii)     in the case of Transfer Restricted Securities that are
                  Definitive Notes, shall be accompanied by the following
                  additional information and documents, as applicable, upon
                  which the Registrar may conclusively rely:

                  (A)      if such Transfer Restricted Securities are being
                           delivered to the Registrar by a Holder for
                           registration in the name of such Holder, without
                           transfer, a certification from such Holder to that
                           effect (in substantially the form of Exhibit B
                           hereto); or

                  (B)      if such Transfer Restricted Securities are being
                           transferred (1) to a "qualified institutional buyer"
                           (as defined in Rule 144A under the Securities Act) in
                           accordance with Rule 144A under the Securities Act or
                           (2) pursuant to an exemption from registration in
                           accordance with Rule 144 (and based upon an opinion
                           of counsel if the Issuers so request) or (3) pursuant
                           to an effective registration statement under the
                           Securities Act, a

                                      -26-
<PAGE>
                           certification to that effect from such Holder (in
                           substantially the form of Exhibit B hereto); or

                  (C)      if such Transfer Restricted Securities are being
                           transferred to an institutional "accredited
                           investor," within the meaning of Rule 501(a)(1), (2),
                           (3) or (7) under the Securities Act pursuant to a
                           private placement exemption from the registration
                           requirements of the Securities Act (and based upon an
                           opinion of counsel if the Issuers so request), a
                           certification to that effect from such Holder (in
                           substantially the form of Exhibit B hereto) and a
                           certification from the applicable transferee (in
                           substantially the form of Exhibit C hereto);

                  (D)      if such Transfer Restricted Securities are being
                           transferred pursuant to an exemption from
                           registration in accordance with Rule 904 under the
                           Securities Act (and based on an opinion of counsel if
                           the Issuers so request), certification to that effect
                           from such Holder (in substantially the form of
                           Exhibits B and D hereto); or

                  (E)      if such Transfer Restricted Securities are being
                           transferred in reliance on another exemption from the
                           registration requirement of the Securities Act (and
                           based upon an opinion of counsel if the Issuers so
                           request), a certification to that effect from such
                           Holder (in substantially the form of Exhibit B
                           hereto).

         (b) Restriction on Transfer of a Definitive Note for a Beneficial
Interest in a Global Note. A Definitive Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive Note,
duly endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:

                  (i)      if such Definitive Note is a Transfer Restricted
                           Security, certification, substantially in the form of
                           Exhibit B hereto, upon which the Trustee may
                           conclusively rely, that such Definitive Note is being
                           transferred to a "qualified institutional buyer" (as
                           defined in Rule 144A under the Securities Act) in
                           accordance with Rule 144A under the Securities Act;
                           and

                  (ii)     whether or not such Definitive Note is a Transfer
                           Restricted Security, written instructions directing
                           the Trustee to make, or direct the Note Custodian to
                           make, an endorsement on the Global Note to reflect an
                           increase in the aggregate principal amount of the
                           Notes represented by the Global Note;

then the Trustee shall cancel such Definitive Note in accordance with Section
2.11 hereof and cause, or direct the Note Custodian to cause, in accordance with
the standing instructions and procedures existing between the Depositary and the
Note Custodian, the aggregate principal amount

                                      -27-
<PAGE>
of Notes represented by the Global Note to be increased accordingly. If no
Global Notes are then outstanding, the Issuers shall issue and, upon receipt of
an authentication order in accordance with Section 2.2 hereof, the Trustee shall
authenticate a new Global Note in the appropriate principal amount.

         (c) Transfer and Exchange of Global Notes. The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depositary, in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary therefor, which
shall include restrictions on transfer comparable to those set forth herein to
the extent required by the Securities Act.

         (d) Transfer of a Beneficial Interest in a Global Note for a Definitive
Note.

                  (i)      Any Person having a beneficial interest in a Global
                           Note may upon request exchange such beneficial
                           interest for a Definitive Note. Upon receipt by the
                           Trustee of written instructions or such other form of
                           instructions as is customary for the Depositary, from
                           the Depositary or its nominee on behalf of any Person
                           having a beneficial interest in a Global Note, and in
                           the case of a Transfer Restricted Security, the
                           following additional information and documents (all
                           of which may be submitted by facsimile), upon which
                           the Trustee may conclusively rely:

                           (A)      if such beneficial interest is being
                                    transferred to the Person designated by the
                                    Depositary as being the beneficial owner, a
                                    certification from such Person to that
                                    effect (in substantially the form of Exhibit
                                    B hereto); or

                           (B)      if such beneficial interest is being
                                    transferred (1) to a "qualified
                                    institutional buyer" (as defined in Rule
                                    144A under the Securities Act) in accordance
                                    with Rule 144A under the Securities Act or
                                    (2) pursuant to an exemption from
                                    registration in accordance with Rule 144
                                    under the Securities Act (and based upon an
                                    opinion of counsel if the Issuers so
                                    request) or (3) pursuant to an effective
                                    registration statement under the Securities
                                    Act, a certification to that effect from the
                                    transferor (in substantially the form of
                                    Exhibit B hereto); or

                           (C)      if such beneficial interest is being
                                    transferred to an institutional "accredited
                                    investor," within the meaning of Rule
                                    501(a)(1), (2), (3) or (7) under the
                                    Securities Act pursuant to a private
                                    placement exemption from the registration
                                    requirements of the Securities Act (and
                                    based upon an opinion of counsel if the
                                    Issuers so request), a certification to that
                                    effect from such transferor (in
                                    substantially the form of Exhibit B hereto)
                                    and a certification from the applicable
                                    transferee (in substantially the form of
                                    Exhibit C hereto); or

                                      -28-
<PAGE>
                           (D)      if such beneficial interest is being
                                    transferred pursuant to an exemption from
                                    registration in accordance with Rule 904
                                    under the Securities Act (and based upon an
                                    opinion of counsel if the Issuers so
                                    request), certifications to that effect from
                                    such transferor (in substantially the form
                                    of Exhibits B and D hereto); or

                           (E)      if such beneficial interest is being
                                    transferred in reliance on another exemption
                                    from the registration requirements of the
                                    Securities Act (and based upon an opinion of
                                    counsel if the Issuers so request), a
                                    certification to that effect from such
                                    transferor (in substantially the form of
                                    Exhibit B hereto);

                           the Trustee or the Note Custodian, at the direction
                           of the Trustee, shall, in accordance with the
                           standing instructions and procedures existing between
                           the Depositary and the Note Custodian, cause the
                           aggregate principal amount of Global Notes to be
                           reduced accordingly and, following such reduction,
                           the Partnership shall execute and, upon receipt of an
                           authentication order in accordance with Section 2.2
                           hereof, the Trustee shall authenticate and deliver to
                           the transferee a Definitive Note in the appropriate
                           principal amount.

                  (ii)     Definitive Notes issued in exchange for a beneficial
                           interest in a Global Note pursuant to this Section
                           2.6(d) shall be registered in such names and in such
                           authorized denominations as the Depositary, pursuant
                           to instructions from its direct or indirect
                           participants or otherwise, shall instruct the
                           Trustee. The Trustee shall deliver such Definitive
                           Notes to the Persons in whose names such Notes are so
                           registered.

         (e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.

         (f) Authentication of Definitive Notes in Absence of Depositary. If at
any time:

                  (i)      the Depositary for the Notes notifies the Issuers
                           that the Depositary is unwilling or unable to
                           continue as Depositary for the Global Notes and a
                           successor Depositary for the Global Notes is not
                           appointed by the Issuers within 90 days after
                           delivery of such notice; or

                  (ii)     the Issuers, at their sole discretion, notify the
                           Trustee in writing that they elect to cause the
                           issuance of Definitive Notes under this Indenture,

                                      -29-
<PAGE>
then each of the Issuers will execute, and the Trustee, upon receipt of an
Officers' Certificate requesting the authentication and delivery of Definitive
Notes, will authenticate and deliver Definitive Notes, in an aggregate principal
amount equal to the principal amount of the Global Notes, in exchange for such
Global Notes and registered in such names as the Depositary shall instruct the
Trustee or the Issuers in writing.

         (g) Legends.

                  (i)      Except as permitted by the following paragraph (ii),
                           each Note certificate evidencing the Global Notes and
                           the Definitive Notes (and all Notes issued in
                           exchange therefor or substitution thereof) shall bear
                           a legend in substantially the following form:

"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER: (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED
THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN
"IAI"), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO AMERIGAS PARTNERS, L.P., AP EAGLE FINANCE CORP. OR ANY OF THEIR
RESPECTIVE SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT,
(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO AMERIGAS PARTNERS, L.P. THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO AMERIGAS PARTNERS, L.P.) OR (G)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS NOTE OR AN INTEREST

                                      -30-
<PAGE>
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."

         Each Note certificate evidencing the Global Notes also shall bear the
paragraph referred to in footnote 1 in the form of Note attached hereto as
Exhibit A.

                  (ii)     Upon any sale or transfer of a Transfer Restricted
                           Security (including any Transfer Restricted Security
                           represented by a Global Note) pursuant to Rule 144
                           under the Securities Act or an effective registration
                           statement under the Securities Act:

                           (A)      in the case of any Transfer Restricted
                                    Security that is a Definitive Note, the
                                    Registrar shall permit the Holder thereof to
                                    exchange such Transfer Restricted Security
                                    for a Definitive Note that does not bear the
                                    legend set forth in (i) above and rescind
                                    any restriction on the transfer of such
                                    Transfer Restricted Security; and

                           (B)      in the case of any Transfer Restricted
                                    Security represented by a Global Note, such
                                    Transfer Restricted Security shall not be
                                    required to bear the legend set forth in (i)
                                    above if all other interests in such Global
                                    Note have been or are concurrently being
                                    sold or transferred pursuant to Rule 144
                                    under the Securities Act or pursuant to an
                                    effective registration statement under the
                                    Securities Act, but such Transfer Restricted
                                    Security shall continue to be subject to the
                                    provisions of Section 2.6(c) hereof;
                                    provided, however, that with respect to any
                                    request for an exchange of a Transfer
                                    Restricted Security that is represented by a
                                    Global Note for a Definitive Note that does
                                    not bear a legend set forth in (i) above,
                                    which request is made in reliance upon Rule
                                    144, the Holder thereof shall certify in
                                    writing to the Registrar that such request
                                    is being made pursuant to Rule 144 (such
                                    certification to be substantially in the
                                    form of Exhibit B hereto).

                  (iii)    Notwithstanding the foregoing, upon consummation of
                           the Exchange Offer, the Issuers shall issue and, upon
                           receipt of an authentication order in accordance with
                           Section 2.2 hereof, the Trustee shall authenticate
                           Series B Notes in exchange for Series A Notes
                           accepted for exchange in the Exchange Offer, which
                           Series B Notes shall not bear the legend set forth in
                           (i) above, and the Registrar shall rescind any
                           restriction on the transfer of such Notes, in each
                           case unless the Holder of such Series A Notes is
                           either (A) a broker-dealer, (B) a Person
                           participating in the distribution of the Series A
                           Notes or (C) a Person who is an affiliate (as defined
                           in Rule

                                      -31-
<PAGE>
                           144A) of the Issuers. The Issuers shall identify to
                           the Trustee such Holders of the Notes in a written
                           certification signed by an Officer of each of the
                           Issuers and, absent certification from the Issuers to
                           such effect, the Trustee shall assume that there are
                           no such Holders.

         (h) Cancellation and/or Adjustment of Global Note. At such time as all
beneficial interests in a Global Note have either been exchanged for Definitive
Notes, redeemed, repurchased or cancelled, such Global Note shall be returned to
or retained and cancelled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for
Definitive Notes, redeemed, repurchased or cancelled, the principal amount of
Notes represented by such Global Note shall be reduced and an endorsement shall
be made on such Global Note, by the Trustee or the Note Custodian, at the
direction of the Trustee to reflect such reduction.

         (i) General Provisions with respect to Transfer and Exchanges.

                  (i)      To permit registrations of transfers and exchanges,
                           each of the Issuers shall execute and the Trustee
                           shall authenticate Definitive Notes and Global Notes
                           at the Registrar's request.

                  (ii)     No service charge shall be made to a Holder for any
                           registration of transfer or exchange, but the Issuers
                           may require payment of a sum sufficient to cover any
                           transfer tax or similar governmental charge payable
                           in connection therewith (other than any such transfer
                           taxes or similar governmental charges payable upon
                           exchange or transfer pursuant to Sections 3.7, 3.10,
                           4.16, 4.17 and 9.5 hereof).

                  (iii)    The Registrar shall not be required to register the
                           transfer or exchange of any Note selected for
                           redemption in whole or in part, except the unredeemed
                           portion of any Note being redeemed in part.

                  (iv)     All Definitive Notes and Global Notes issued upon any
                           registration of transfer or exchange of Definitive
                           Notes or Global Notes shall be the valid obligations
                           of each of the Issuers, as joint and several
                           obligors, evidencing the same debt, and entitled to
                           the same benefit under this Indenture as the
                           Definitive Notes or Global Notes surrendered upon
                           such registration of transfer or exchange.

                  (v)      The Issuers shall not be required to issue, register
                           the transfer of or exchange Notes during a period
                           beginning at the opening of business 15 days before
                           the day of any selection of Notes for redemption
                           under Section 3.2 and ending at the close of business
                           on the day of selection.

                  (vi)     Prior to due presentment for registration of transfer
                           of any Note, the Trustee, any Agent and the Issuers
                           may deem and treat the Person in whose name any Note
                           is registered as the absolute owner of such Note for

                                      -32-
<PAGE>
                           the purpose of receiving payment of principal of, and
                           premium, interest and Liquidated Damages, if any, on
                           such Note, and neither the Trustee, any Agent nor the
                           Issuers shall be affected by notice to the contrary.

                  (vii)    The Trustee shall authenticate Definitive Notes and
                           Global Notes in accordance with the provisions of
                           Section 2.2 hereof.

                  (viii)   None of the Issuers nor the Trustee will have any
                           responsibility or liability for any aspect of the
                           records relating to, or payments made on account of,
                           Notes by the Depositary, or for maintaining,
                           supervising or reviewing any records of the
                           Depositary relating to such Notes. None of the
                           Issuers nor the Trustee shall be liable for any delay
                           by the related Global Note Holder or the Depositary
                           in identifying the beneficial owners of the related
                           Notes and each such Person may conclusively rely on,
                           and shall be protected in relying on, instructions
                           from such Global Note Holder or of the Depositary for
                           all purposes (including with respect to the
                           registration and delivery, and the respective
                           principal amounts, of the Notes to be issued).

                  (ix)     The Registrar shall retain copies of all letters,
                           notices and other written communications received
                           pursuant to this Section 2.6. The Issuers shall have
                           the right to inspect and make copies of all such
                           letters, notices or other written communications at
                           any reasonable time upon the giving of reasonable
                           written notice to the Registrar.

2.7 Replacement Notes.

         If any mutilated Note is surrendered to the Trustee, or the Issuers and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Note, the Issuers shall issue and the Trustee, upon the written
order of the Issuers signed by an Officer of each of the General Partner, on
behalf of the Partnership (or the Partnership, if the Partnership is a
corporation) and Finance Corp. shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Issuers, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Trustee and the Issuers to protect the Issuers, the Trustee, any Agent or
any authenticating agent from any loss which any of them may suffer if a Note is
replaced. The Issuers and the Trustee may charge for their expenses in replacing
a Note.

         Every replacement Note is an obligation of the Issuers.

2.8 Outstanding Notes.

         The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee hereunder, and those described in this Section as not outstanding.
Except as set forth in Section 2.9 hereof, a Note does not cease to be
outstanding because either of the Issuers or an Affiliate of the Issuers holds a
Note.

                                      -33-
<PAGE>
         If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.

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

         If the Paying Agent (other than the Issuers, a Subsidiary or an
Affiliate of any thereof) segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date, money sufficient to pay all
principal, interest, premium and Liquidated Damages, if any, payable on that
date with respect to the Notes (or the portion thereof to be redeemed or
maturing, as the case may be), then on and after that date such Notes (or
portions thereof) shall be deemed to be no longer outstanding and shall cease to
accrue interest.

2.9 Treasury Notes.

         In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by either
of the Issuers or any Affiliate of the Issuers shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Responsible Officer of the Trustee knows are so owned shall be so
disregarded.

2.10 Temporary Notes.

         Until definitive Notes are ready for delivery, the Issuers may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Issuers and the Trustee consider appropriate for temporary Notes. Without
unreasonable delay, the Issuers shall prepare and the Trustee, upon receipt of
the written order of the Partnership and Finance Corp. signed by an Officer of
each of the General Partner, on behalf of the Partnership (or the Partnership,
if the Partnership is a corporation) and Finance Corp., shall authenticate,
definitive Notes in exchange for temporary Notes.

         Until such exchange, Holders of temporary Notes shall be entitled to
all of the right, benefit and privileges of this Indenture.

                                      -34-
<PAGE>
2.11 Cancellation.

         The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Notes surrendered for registration of transfer or
exchange, payment, replacement or cancellation. The Issuers may not issue new
Notes to replace Notes that have been redeemed or paid or that have been
delivered to the Trustee for cancellation. All cancelled Notes held by the
Trustee shall be destroyed and certification of their destruction delivered to
the Issuers unless by a written order, signed by one Officer of each of the
General Partner, on behalf of the Partnership (or the Partnership, if the
Partnership is a corporation), and Finance Corp., the Issuers shall direct that
cancelled Notes be returned to them.

2.12 Defaulted Interest.

         If the Issuers default in a payment of interest on the Notes, they
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, which date shall be at the earliest
practicable date but in all events at least five Business Days prior to the
payment date, in each case at the rate provided in the Notes and in Section 4.1
hereof. The Issuers shall, with the consent of the Trustee, fix or cause to be
fixed each such special record date and payment date. At least 15 days before
the special record date, the Issuers (or the Trustee, in the name of and at the
expense of the Issuers) shall mail to Holders a notice that states the special
record date, the related payment date and the amount of such interest to be
paid.

                  ARTICLE 3: REDEMPTION AND OFFERS TO PURCHASE

3.1 Notice to Trustee.

         If the Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof, they shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date (unless a
shorter notice period shall be satisfactory to the Trustee), an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the redemption shall occur, (ii) the redemption date, (iii) the principal amount
of Notes to be redeemed and (iv) the redemption price.

         If the Issuers are required to make an offer to purchase Notes pursuant
to the provisions of Sections 4.16 or 4.17 hereof, they shall furnish to the
Trustee, at least 30 days before the scheduled purchase date, an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the offer to purchase shall occur, (ii) the terms of the offer, (iii) the
purchase price, (iv) the principal amount of the Notes to be purchased, and (v)
further setting forth a statement to the effect that (a) the Partnership or one
of its Subsidiaries has made an Asset Sale and there are Excess Proceeds
aggregating more than $5 million and the amount of such Excess Proceeds or (b) a
Change of Control has occurred, as applicable.

                                      -35-
<PAGE>
3.2 Selection of Notes to Be Redeemed.

         If less than all of the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed among the Holders of the Notes pro rata, by lot
or in accordance with a method which the Trustee considers to be fair and
appropriate (and in such manner as complies with applicable legal and stock
exchange requirements, if any). In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.

         The Trustee shall promptly notify the Issuers in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
them selected shall be in face amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.

         In the event the Issuers are required to make an Asset Sale Offer
pursuant to Section 3.10 and Section 4.16, and the amount of the Net Proceeds
from the Asset Sale is not evenly divisible by $1,000, the Trustee shall
promptly refund to the Issuers the portion of such Excess Proceeds that is not
necessary to purchase the immediately lesser principal amount of Notes that is
so divisible.

3.3 Notice of Redemption to Holders.

         Subject to the provisions of Section 3.10 hereof (other than in
connection with a Special Mandatory Redemption), at least 30 days but not more
than 60 days before a redemption date, the Issuers shall mail a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address.

         Upon the occurrence of a Special Mandatory Redemption Event, the
Issuers shall mail or cause to be mailed a notice of redemption by first class
mail, postage prepaid, to each Holder, with a copy to the Trustee and the Paying
Agent, on or prior to the fifth Business Day after the Special Mandatory
Redemption Event; provided, that failure to provide timely notice of a Special
Mandatory Redemption to the Holders, the Trustee or the Paying Agent shall not
affect the Issuers' obligation to effect a Special Mandatory Redemption or the
amount of the Issuers' obligation on the Notes.

         The notice shall identify the Notes to be redeemed and shall state:

         (1) the redemption date;

         (2) the redemption price, separately stating the amount of any
Liquidated Damages to be paid in connection with the redemption;

                                      -36-
<PAGE>
         (3) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date, upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion will be issued;

         (4) the name and address of the Paying Agent;

         (5) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;

         (6) that, unless the Issuers default in making such redemption payment,
interest on Notes or portions of Notes called for redemption ceases to accrue on
and after the redemption date;

         (7) the paragraph of the Notes or Section of this Indenture pursuant to
which the Notes called for redemption are being redeemed; and

         (8) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.

         At the Issuers' request, the Trustee shall give the notice of
redemption in the names of the Issuers and at their expense; provided, however,
that the Issuers shall deliver to the Trustee, at least 45 days prior to the
redemption date (seven days in the case of a Special Mandatory Redemption), an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.

                                      -37-
<PAGE>
3.4 Effect of Notice of Redemption.

         Once notice of redemption is mailed in accordance with Section 3.3
herein, Notes called for redemption become due and payable on the redemption
date at the redemption price stated in such notice. A notice of redemption may
not be conditional.

3.5 Deposit of Redemption Price.

         On or before the redemption date, the Issuers shall deposit, or cause
to be deposited, with the Trustee (to the extent not already held by the
Trustee) or with the Paying Agent money in immediately available funds
sufficient to pay the redemption price of and accrued interest and Liquidated
Damages, if any, on all Notes to be redeemed on that date. The Trustee or the
Paying Agent shall return to the Issuers any money deposited with the Trustee or
the Paying Agent by the Issuers in excess of the amount necessary to pay the
redemption price of, and accrued interest and Liquidated Damages on all Notes to
be redeemed.

         If the Issuers comply with the provisions of the preceding paragraph,
on and after the redemption date interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest and Liquidated Damages, if any, shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption shall not be so
paid upon surrender for redemption because of the failure of the Issuers to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case at
the rate provided in the Notes and in Section 4.1 hereof.

3.6 Notes Redeemed in Part.

         Upon surrender of a Note that is redeemed in part, the Issuers shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Issuers a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.

3.7 Optional Redemption.

         The Notes are subject to redemption at the option of the Issuers, in
whole or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest thereon and Liquidated Damages, if any,
to the applicable redemption date, if redeemed during the 12-month period
beginning on May 20 of the years indicated below:

<TABLE>
<CAPTION>
                  YEAR                                                    PERCENTAGE
                  ----                                                    ----------
<S>                                                                       <C>
                  2006...............................................     104.438%
                  2007...............................................     102.958%
                  2008...............................................     101.479%
                  2009 and thereafter................................     100.000%
</TABLE>

                                      -38-
<PAGE>
         In the event that, on or prior to May 20, 2004, the Partnership
consummates a public offering of its Capital Stock (other than Redeemable
Capital Stock), then within 90 days of the consummation of such public offering
the Partnership, at its option, may use the net proceeds of such public offering
to redeem Notes at 108.875% of the principal amount thereof, plus accrued and
unpaid interest to the applicable redemption date and Liquidated Damages, if
any; provided, however, that at least 67% of the Notes originally issued,
together with any Additional Notes, shall be outstanding immediately after such
redemption. Only one redemption may be made pursuant to the provision described
in this paragraph.

3.8 Mandatory Redemption.

         Subject to the Issuers' obligation to make an offer to purchase or
redeem Notes under certain circumstances pursuant to Sections 3.9, 3.10, 4.16
and 4.17 hereof, the Issuers shall have no mandatory redemption or sinking fund
obligations with respect to the Notes.

3.9 Special Mandatory Redemption.

         If the Acquisition has not been consummated on or prior to the Special
Mandatory Redemption Event, then the Issuers shall redeem, or cause to be
redeemed, all outstanding Notes within 15 days following the Special Mandatory
Redemption Event, at a redemption price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest to the redemption date.

3.10 Offer to Purchase by Application of Excess Proceeds.

         Any Asset Sale Offer pursuant to Section 4.16 shall remain open for a
period of 20 Business Days following its commencement and no longer, except to
the extent that a longer period is required by applicable law (the "Offer
Period"). On a date within five Business Days after the termination of the Offer
Period (the "Purchase Date"), the Issuers shall purchase the principal amount of
Notes required to be purchased pursuant to Section 4.16 hereof (the "Offer
Amount") or, if less than the Offer Amount has been tendered, all Notes tendered
in response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.

         The Issuers shall comply with any tender offer rules under the Exchange
Act which may then be applicable, including Rule 14e-1, in connection with any
offer required to be made by the Issuers to repurchase the Notes as a result of
an Asset Sale Offer. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 3.10, the Issuers shall
comply with the applicable securities laws or regulations and shall not be
deemed to have breached their obligations hereunder by virtue thereof.

         If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.

                                      -39-
<PAGE>
         Upon the commencement of an Asset Sale Offer, the Issuers shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:

         (a) that the Asset Sale Offer is being made pursuant to this Section
3.10 and Section 4.16 hereof and the length of time the Asset Sale Offer shall
remain open;

         (b) the Offer Amount, the purchase price and the Purchase Date;

         (c) that any Note not tendered or accepted for payment shall continue
to accrue interest;

         (d) that, unless the Issuers default in making such payments, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest after the Purchase Date;

         (e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may only elect to have all of such Note purchased and may not elect
to have only a portion of such Note purchased;

         (f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Issuers, a depositary, if appointed by
the Issuers, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;

         (g) that Holders shall be entitled to withdraw their election if the
Issuers, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;

         (h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Issuers shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Issuers so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and

         (i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).

         On or before the Purchase Date, the Issuers shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes

                                      -40-
<PAGE>
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Issuers in
accordance with the terms of this Section 3.10. The Issuers, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Issuers for purchase, and the Issuers shall promptly issue a new
Note, and the Trustee, upon written request from the Issuers shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Issuers to the Holder thereof. The
Issuers shall publicly announce by means of a press release the results of the
Asset Sale Offer on the Purchase Date.

         Other than as specifically provided in this Section 3.10, any purchase
pursuant to this Section 3.10 shall be made pursuant to the provisions of
Sections 3.1 through 3.6 hereof.

         No repurchase of Notes under this Section 3.10 shall be deemed to be a
redemption of Notes.

                              ARTICLE 4: COVENANTS

4.1 Payment of Notes.

         The Issuers shall pay the principal of and interest on the Notes on the
dates and in the manner provided in the Notes. Principal and interest shall be
considered paid on the date due if the Paying Agent, other than the Issuers or
any of their Subsidiaries, holds on or before that date money deposited by the
Issuers in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Issuers shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement. If any Liquidated Damages become
payable, the Issuers shall not later than the date that any payment of
Liquidated Damages is due (i) deliver an Officers' Certificate to the Trustee
setting forth the amount of Liquidated Damages payable to Holders and (ii)
instruct the Paying Agent to pay such amount of Liquidated Damages to Holders
entitled to receive such Liquidated Damages.

         The Issuers shall pay interest (including post-petition interest under
any Bankruptcy Law) on overdue principal at a rate equal to 1% per annum in
excess of the then applicable interest rate on the Notes to the extent lawful;
they shall pay interest (including post-petition interest under any Bankruptcy
Law) on overdue installments of interest and Liquidated Damages (without regard
to any applicable grace period) at the same rate to the extent lawful.

4.2 Maintenance of Office or Agency.

         The Partnership and Finance Corp. shall maintain in the Borough of
Manhattan, The City of New York, an office or agency (which may be an office of
the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Partnership and Finance Corp. in respect of the Notes and this Indenture may
be served. The Partnership shall give prompt written notice to the Trustee of
the location, and

                                      -41-
<PAGE>
any change in the location, of such office or agency. If at any time the
Partnership and Finance Corp. 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.

         The Partnership and Finance Corp. may also from time to time designate
one or more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Partnership or Finance Corp. of their respective
obligations to maintain an office or agency in the Borough of Manhattan, The
City of New York for such purposes. The Partnership will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.

         The Partnership and Finance Corp. hereby designate the office of Harris
Trust Company, 77 Water Street, 5th Floor, New York, New York 10005 as one such
office or agency of the Issuers in accordance with Section 2.3.

4.3 Reports.

         (a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Issuers shall furnish to the Holders of
Notes (i) all quarterly and annual financial information that would be required
to be contained in a filing with the SEC on Forms 10-Q and 10-K if either of the
Issuers were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" that describes
the financial condition and results of operations of the Issuers and their
subsidiaries and, with respect to the annual information only, a report thereon
by the Issuers' certified independent accountants and (ii) all reports that
would be required to be filed with the SEC on Form 8-K if the Issuers were
required to file such reports. In addition, whether or not required by the rules
and regulations of the SEC, each of the Issuers shall file a copy of all such
information and reports with the SEC for public availability and make such
information available to investors who request it in writing.

         (b) For so long as any Transfer Restricted Securities remain
outstanding, other than during any period in which the Partnership is subject to
Section 13 or 15(d) of the Exchange Act and is in compliance with the
requirements thereof, each of the Issuers shall furnish to all Holders and
prospective purchasers of the Notes designated by the Holders of Transfer
Restricted Securities, promptly upon their request, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

4.4 Compliance Certificate.

         (a) The Partnership shall deliver to the Trustee, within 120 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Partnership and its Subsidiaries (including Finance Corp.)
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether each has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such

                                      -42-
<PAGE>
Officer signing such certificate, that to the best of his knowledge each has
kept, observed, performed and fulfilled each and every covenant contained in
this Indenture, and is not in default in the performance or observance of any of
the terms, provisions and conditions hereof or thereof (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he may have knowledge and what action each is making or
proposes to take with respect thereto).

         (b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.3 above shall be accompanied by a
written statement of the Partnership's independent certified public accountants
that in making the examination necessary for certification of such financial
statements nothing has come to their attention which would lead them to believe
that either the Partnership or any of its Subsidiaries has violated any
provisions of Sections 4.1, 4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14,
4.15, 4.16 or 4.17 hereof or of Article 5 of this Indenture or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.

         (c) The Partnership and Finance Corp. shall, so long as any of the
Notes are outstanding, deliver to the Trustee, forthwith upon any Officer
becoming aware of (i) any Default or Event of Default or (ii) any event of
default under any other mortgage, indenture or instrument referred to in Section
6.1(4), an Officers' Certificate specifying such Default, Event of Default or
other event of default and what action the Issuers are taking or propose to take
with respect thereto.

4.5 Taxes.

         Each of the Partnership and Finance Corp. shall, and shall cause each
of its respective Subsidiaries to, pay prior to delinquency all material taxes,
assessment, and governmental levies except as contested in good faith and by
appropriate proceedings.

4.6 Stay, Extension and Usury Laws.

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

4.7 Partnership and Corporate Existence.

         Subject to Section 4.16 and Article 5 hereof, each of the Partnership
and Finance Corp. shall do or cause to be done all things necessary to preserve
and keep in full force and effect (a) its

                                      -43-
<PAGE>
partnership or corporate existence, as the case may be, and the corporate,
partnership or other existence of each of their respective Subsidiaries, in
accordance with their respective organizational documents (as the same may be
amended from time to time) and (b) its (and its Subsidiaries') rights (charter
and statutory), licenses and franchises; provided, however, that the Partnership
and Finance Corp. shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any Subsidiary,
if the Board of Directors of the General Partner on behalf of the Partnership
(or the Partnership, if the Partnership is a corporation) shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Issuers and their respective Subsidiaries taken as a whole and that the
loss thereof is not adverse in any material respect to the Holders.

4.8 Limitation on Additional Indebtedness.

         The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or in any manner become directly or indirectly liable, contingently or
otherwise, for the payment of (in each case, to "incur"), any Indebtedness
(including, without limitation, any Redeemable Capital Stock), unless at the
time of such incurrence, and after giving pro forma effect to the receipt and
application of the proceeds of such Indebtedness, the Consolidated Fixed Charge
Coverage Ratio of the Partnership is greater than 2.00 to 1.

         Notwithstanding the foregoing, the Partnership and its Restricted
Subsidiaries may incur Permitted Indebtedness.

4.9 Limitation on Restricted Payments.

         The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:

         (a) declare or pay any dividend or make any other distribution or
payment on or in respect of Capital Stock of the Partnership or any of its
Restricted Subsidiaries or any payment made to the direct or indirect holders
(in their capacities as such) of Capital Stock of the Partnership or any of its
Restricted Subsidiaries (other than (x) dividends or distributions payable
solely in Capital Stock of the Partnership (other than Redeemable Capital Stock)
or in options, warrants or other rights to purchase Capital Stock of the
Partnership (other than Redeemable Capital Stock), (y) the declaration or
payment of dividends or other distributions to the extent declared or paid to
the Partnership or any Restricted Subsidiary of the Partnership and (z) the
declaration or payment of dividends or other distributions by any Restricted
Subsidiary of the Partnership to all holders of Capital Stock of such Restricted
Subsidiary on a pro rata basis (including, in the case of the Operating
Partnership, to the general partner thereof)),

         (b) purchase, redeem, defease or otherwise acquire or retire for value
any Capital Stock of the Partnership or any of its Restricted Subsidiaries
(other than any such Capital Stock owned by a Wholly-Owned Restricted Subsidiary
of the Partnership),

                                      -44-
<PAGE>
         (c) make any principal payment on, or purchase, defease, repurchase,
redeem or otherwise acquire or retire for value, prior to any scheduled
maturity, scheduled repayment, scheduled sinking fund payment or other Stated
Maturity, any Subordinated Indebtedness (other than any such Indebtedness owned
by the Partnership or a Wholly-Owned Restricted Subsidiary of the Partnership),
or

         (d) make any Investment (other than any Permitted Investment) in any
Person

(such payments or Investments described in the preceding clauses (a), (b), (c)
and (d) are collectively referred to as "Restricted Payments"), unless, at the
time of and after giving effect to the proposed Restricted Payment, (A) no
Default or Event of Default shall have occurred and be continuing and (B) such
Restricted Payment, together with the aggregate of all other Restricted Payments
made by the Partnership and its Restricted Subsidiaries during the fiscal
quarter during which such Restricted Payment is made, shall not exceed (I) if
the Consolidated Fixed Charge Coverage Ratio of the Partnership shall be greater
than 1.75 to 1, an amount equal to Available Cash as of the end of the
immediately preceding fiscal quarter or (II) if the Consolidated Fixed Charge
Coverage Ratio of the Partnership shall be equal to or less than 1.75 to 1, an
amount equal to the sum of (x) $24 million, less the aggregate amount of all
Restricted Payments made by the Partnership and its Restricted Subsidiaries
pursuant to this clause (II)(x) during the period ending on the last day of the
fiscal quarter of the Partnership immediately preceding the date of such
Restricted Payment and beginning on the first day of the sixteenth full fiscal
quarter immediately preceding the date of such Restricted Payment, plus (y) the
aggregate net cash proceeds of any substantially concurrent (1) capital
contribution to the Partnership from any Person (other than a Restricted
Subsidiary of the Partnership) or (2) issuance and sale of shares of Capital
Stock (other than Redeemable Capital Stock) of the Partnership to any Person
(other than to a Restricted Subsidiary of the Partnership). The amount of any
such Restricted Payment, if other than cash, shall be the fair market value (as
determined in good faith by the General Partner) on the date of such Restricted
Payment of the asset(s) proposed to be transferred by the Partnership or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.

         None of the foregoing provisions will prohibit: (i) the payment of any
dividend or distribution within 60 days after the date of its declaration, if at
the date of declaration such payment would be permitted by the foregoing
paragraph; (ii) the redemption, repurchase or other acquisition or retirement of
any shares of any class of Capital Stock of the Partnership or any Restricted
Subsidiary of the Partnership in exchange for, or out of the net cash proceeds
of, a substantially concurrent (x) capital contribution to the Partnership from
any Person (other than a Restricted Subsidiary of the Partnership) or (y) issue
and sale of other shares of Capital Stock (other than Redeemable Capital Stock)
of the Partnership to any Person (other than to a Restricted Subsidiary of the
Partnership); provided, however, that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase or other acquisition or
retirement shall be excluded from the calculation of Available Cash; or (iii)
any redemption, repurchase or other acquisition or retirement of Subordinated
Indebtedness by exchange for, or out of the net cash proceeds of, a
substantially concurrent (x) capital contribution to the Partnership from any
Person (other than a Restricted

                                      -45-
<PAGE>
Subsidiary of the Partnership) or (y) issue and sale of (1) Capital Stock (other
than Redeemable Capital Stock) of the Partnership to any Person (other than to a
Restricted Subsidiary of the Partnership); or (2) Indebtedness of the
Partnership issued to any Person (other than a Restricted Subsidiary of the
Partnership), so long as such Indebtedness is Permitted Refinancing
Indebtedness; provided, however, in each case, that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase or other
acquisition or retirement shall be excluded from the calculation of Available
Cash. In computing the amount of Restricted Payments previously made for
purposes of the preceding paragraph, Restricted Payments made under clause (i)
shall be included and Restricted Payments made under clauses (ii) and (iii)
shall not be so included.

4.10 Limitation on Liens.

         The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens, other than
Permitted Liens, upon any of its respective property or assets, whether owned on
the 10-1/8% Notes Issue Date or thereafter acquired.

4.11 Limitation on Transactions with Affiliates.

         The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, transfer, disposition, purchase, exchange or lease of assets, property
or services), other than as provided for in the Operative Agreements, with, or
for the benefit of, any Affiliate of the Partnership, unless (1) such
transaction or series of related transactions is between the Partnership and its
Wholly-Owned Restricted Subsidiaries or between two Wholly-Owned Restricted
Subsidiaries or (2) (a) such transaction or series of related transactions is on
terms that are no less favorable to the Partnership or such Restricted
Subsidiary, as the case may be, than those which would have been obtained in a
comparable transaction at such time from Persons who are not Affiliates of the
Partnership or a Restricted Subsidiary and (b) with respect to a transaction or
series of transactions involving aggregate payments or value equal to or greater
than $15 million, the Partnership shall have delivered an Officers' Certificate
to the Trustee certifying that such transaction or series of transactions
complies with the preceding clause (a) and that such transaction or series of
transactions has been approved by a majority of the Board of Directors of the
General Partner (including a majority of the Disinterested Directors); provided,
however, that this Section 4.11 will not restrict the Partnership, any
Restricted Subsidiary or the General Partner from entering into (A) any
employment agreement, stock option agreement, restricted stock agreement or
other similar agreement in the ordinary course of business, (B) transactions
permitted by the provisions of this Indenture set forth in Sections 4.9 and 4.18
hereof and (C) transactions in the ordinary course of business in connection
with reinsuring the self-insurance programs or other similar forms of retained
insurable risks of the retail propane business operated by the Partnership, its
Subsidiaries and Affiliates.

4.12 Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries.

         The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to (a) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock or any other interest or
participation in, or

                                      -46-
<PAGE>
measured by, its profits, (b) pay any Indebtedness owed to the Partnership or
any other Restricted Subsidiary, (c) make loans or advances to, or any
investment in, the Partnership or any other Restricted Subsidiary, (d) transfer
any of its properties or assets to the Partnership or any other Restricted
Subsidiary or (e) guarantee any Indebtedness of the Partnership or any other
Restricted Subsidiary (collectively, "Payment Restrictions"), except for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) any agreement in effect at or entered into on the 10-1/8% Notes Issue Date
(including, without limitation, the First Mortgage Notes outstanding as of the
10-1/8% Notes Issue Date and the Bank Credit Facilities in effect as of the
10-1/8% Notes Issue Date) or any agreement relating to any Permitted
Indebtedness; provided, however, that the encumbrances and restrictions
contained in the agreements governing such Permitted Indebtedness are no more
restrictive with respect to such Payment Restrictions than those set forth in
the agreements governing the First Mortgage Notes and the Bank Credit Facilities
as in effect on the 10-1/8% Notes Issue Date, (iii) customary non-assignment
provisions of any contract or any lease governing a leasehold interest of the
Partnership or any Restricted Subsidiary, (iv) purchase money obligations for
property acquired in the ordinary course of business that impose restrictions of
the nature described in clause (d) above on the property so acquired, (v) any
agreement or other instrument of a Person acquired by the Partnership or any
Restricted Subsidiary (or of a Restricted Subsidiary of such Person) in
existence at the time of such acquisition (but not created in contemplation
thereof), which encumbrance or restriction is not applicable to any Person or
the properties or assets of any Person other than the Person, or the properties,
assets or Subsidiaries of the Person, so acquired, or (vi) provisions contained
in agreements or instruments relating to Indebtedness which prohibit the
transfer of all or substantially all of the assets of the obligor thereunder
unless the transferee shall assume the obligations of the obligor under such
agreement or instrument.

4.13 Limitation on Sale and Leaseback Transactions.

         The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction with respect to
any property of the Partnership or any of its Restricted Subsidiaries.
Notwithstanding the foregoing, the Partnership and its Restricted Subsidiaries
may enter into Sale and Leaseback Transactions with respect to property acquired
or constructed after the 10-1/8% Notes Issue Date; provided that (a) the
Partnership or such Restricted Subsidiary would be permitted under this
Indenture to incur Indebtedness secured by a Lien on such property in an amount
equal to the Attributable Debt with respect to such Sale and Leaseback
Transaction, or (b) the lease in such Sale and Leaseback Transaction is for a
term not in excess of the lesser of (i) three years and (ii) 60% of the
remaining useful life of such property.

4.14 Limitation on Finance Corp.

         In addition to the restrictions set forth under Section 4.8 hereof,
Finance Corp. may not incur any Indebtedness unless (a) the Partnership is a
co-obligor and guarantor of such Indebtedness or (b) the net proceeds of such
Indebtedness are lent to the Partnership, used to acquire outstanding debt
securities issued by the Partnership or used directly or indirectly to refinance
or discharge Indebtedness permitted under the limitation of this Section 4.14.
Finance Corp. may not engage in any business not related directly or indirectly
to obtaining money or arranging financing for the Partnership.

                                      -47-
<PAGE>
4.15 Line of Business.

         The Partnership and its Restricted Subsidiaries shall not materially or
substantially engage in any business other than the Business in which the
Partnership and its Restricted Subsidiaries were engaged on the 10-1/8% Notes
Issue Date.

4.16 Asset Sales.

         The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, (i) sell, lease, convey or otherwise dispose of any assets
(including by way of a Sale and Leaseback Transaction) other than sales of
inventory in the ordinary course of business and consistent with past practice
(provided, that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Partnership shall be governed by the
provisions of this Indenture set forth under Section 4.17 hereof or Article 5
hereof and not by the provisions of this Section 4.16) or (ii) issue or sell
Capital Stock of any of its Restricted Subsidiaries, in the case of either
clause (i) or (ii) above, whether in a single transaction or a series of related
transactions (each of the foregoing, an "Asset Sale"), unless (x) the
Partnership (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in good faith by the General Partner) of the assets sold or
otherwise disposed of and (y) at least 80% of the consideration therefor
received by the Partnership or such Restricted Subsidiary is in the form of
cash; provided, however, that the amount of (A) any liabilities (as shown on the
Partnership's or such Restricted Subsidiary's most recent balance sheet or in
the notes thereto) of the Partnership or any Restricted Subsidiary that are
assumed by the transferee of any such assets and (B) any notes or other
obligations received by the Partnership or any such Restricted Subsidiary from
such transferee that are immediately converted by the Partnership or such
Restricted Subsidiary into cash (to the extent of the cash received), shall be
deemed to be cash for purposes of this provision; and provided, further, that
the 80% limitation referred to in this clause (y) shall not apply to any Asset
Sale in which the cash portion of the consideration received therefrom,
determined in accordance with the foregoing proviso, is equal to or greater than
what the after-tax proceeds would have been had such Asset Sale complied with
the aforementioned 80% limitation. Notwithstanding the foregoing, Asset Sales
shall not be deemed to include (1) any transfer of assets or Capital Stock by
the Partnership or any of its Restricted Subsidiaries to a Wholly-Owned
Restricted Subsidiary of the Partnership, (2) any transfer of assets or Capital
Stock by the Partnership or any of its Restricted Subsidiaries to any Person in
exchange for other assets used in a line of business permitted under Section
4.15 hereof and having a fair market value (as determined in good faith by the
General Partner) not less than that of the assets so transferred and (3) any
transfer of assets pursuant to a Permitted Investment.

         In the event that the aggregate Net Proceeds received by the
Partnership or any of its Restricted Subsidiaries from one or more Assets Sales
in any fiscal year of the Partnership exceed $10 million, within 270 days after
the date such aggregate Net Proceeds exceed such amount (or such longer period
as may be required to comply with any agreement in effect on the 10-1/8% Notes
Issue Date), the Partnership, at its option, shall apply the amount of such
aggregate Net Proceeds in excess of $10 million (less the amount of any such Net
Proceeds previously applied during such fiscal year for the purposes set forth
in clauses (a) or (b) below) to (a) reduce

                                      -48-
<PAGE>
Indebtedness of a Restricted Subsidiary (with a permanent reduction of
availability in the case of revolving Indebtedness) or (b) make an investment in
assets in the same line of business the Partnership was engaged in on the
10-1/8% Notes Issue Date. Pending the final application of any such Net
Proceeds, the Partnership or any Restricted Subsidiary may temporarily reduce
borrowings under the Bank Credit Facilities or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture. Any such Net
Proceeds that are not applied or invested as provided in the first sentence of
this paragraph will be deemed to constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $5 million, the Issuers shall make
an offer to all Holders of Notes (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes that may be purchased out of the Excess Proceeds, at
an offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase, in
accordance with the procedures set forth in this Indenture. To the extent that
the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Partnership or any Restricted Subsidiary may use
such deficiency for general business purposes. If the aggregate principal amount
of Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds,
the Trustee shall select the Notes to be purchased on a pro rata basis.

         Notwithstanding the foregoing, if the Issuers are required to commence
an Asset Sale Offer at any time when the Issuers have securities outstanding
ranking pari passu in right of payment with the Notes and the terms of those
securities provide that a similar offer must be made with respect to those other
securities, then the Asset Sale Offer for the Notes will be made concurrently
with the other offers and securities of each issue will be accepted on a pro
rata basis in proportion to the aggregate principal amount of securities of each
issue which their holders elect to have purchased. Upon completion of the Asset
Sale Offer, the amount of Excess Proceeds will be reset at zero.

4.17 Change of Control.

         Upon the occurrence of a Change of Control, each Holder of Notes shall
have the right to require the Issuers to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the
offer described below (the "Change of Control Offer") at an offer price in cash
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase (the "Change of Control Payment").
Within 30 days following any Change of Control, the Issuers will mail a notice
to each Holder stating: (1) that the Change of Control Offer is being made
pursuant to this Section 4.17 and that all Notes tendered will be accepted for
payment; (2) the purchase price and the purchase date (the "Change of Control
Payment Date"), which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed; (3) that any Note not tendered will
continue to accrue interest; (4) that, unless the Issuers default in the payment
of the Change of Control Payment, all Notes accepted for payment pursuant to the
Change of Control Offer will cease to accrue interest after the Change of
Control Payment Date; (5) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be required to surrender the Notes,
with the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Notes completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the Change of
Control Payment Date; (6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close of business on
the Second Business Day preceding the

                                      -49-
<PAGE>
Change of Control Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the holder, the principal amount of Notes
delivered for purchase, and a statement that such Holder is withdrawing his
election to have such Notes purchased; and (7) that Holders whose Notes are
being purchased only in part will be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple thereof.

         On the Change of Control Payment Date, the Issuers shall, to the extent
lawful, (1) accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer, (2) deposit with the Paying Agent an amount equal
to the Change of Control Payment in respect of all Notes or portions thereof so
tendered and (3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate amount of
the Notes or portions thereof tendered to the Issuers. The Paying Agent will
promptly mail to each Holder of Notes so accepted the Change of Control Payment
for such Notes, and the Trustee will promptly authenticate and mail to each
Holder a new Note equal in principal amount to the unpurchased portion of the
Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Issuers will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.

         The Issuers shall comply with any tender offer rules under the Exchange
Act which may then be applicable, including Rule 14e-1, in connection with any
offer required to be made by the Issuers to repurchase the Notes as a result of
a Change of Control. To the extent that the provisions of any applicable
securities laws or regulations conflict with provisions of this Section 4.17,
the Issuers shall comply with such securities laws and regulations and shall not
be deemed to have breached its obligations hereunder by virtue thereof.

4.18. Deposit of Proceeds with the Escrow Agent Pending Consummation of
Acquisition.

         If the Acquisition has not been consummated by the close of business on
the Issue Date, the Issuers shall deposit, at or prior to such time, with the
Escrow Agent as provided in the Escrow Agreement, the net proceeds from the
issuance of the Notes.

                                      -50-
<PAGE>
                             ARTICLE 5: SUCCESSORS

5.1 Merger, Consolidation or Sale of Assets.

         (a) The Partnership shall not consolidate or merge with or into
(whether or not the Partnership is the surviving Person), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, another Person
unless (i) the Partnership is the surviving Person, or the Person formed by or
surviving any such consolidation or merger (if other than the Partnership) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation or partnership organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or merger (if
other than the Partnership) or the Person to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made assumes
all the obligations of the Partnership pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee, under the Notes and this Indenture;
(iii) immediately after such transaction no Default or Event of Default exists;
and (iv) the Partnership or such other Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (A) will have Consolidated
Net Worth (immediately after the transaction but prior to any purchase
accounting adjustments resulting from the transaction) equal to or greater than
the Consolidated Net Worth of the Partnership immediately preceding the
transaction and (B) will, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio
test set forth in Section 4.8 hereof.

         (b) Finance Corp. shall not consolidate or merge with or into (whether
or not Finance Corp. is the surviving Person), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, another Person unless (i) Finance
Corp. is the surviving Person, or the Person formed by or surviving any such
consolidation or merger (if other than Finance Corp.) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia and a Wholly-Owned Restricted
Subsidiary of the Partnership; (ii) the Person formed by or surviving any such
consolidation or merger (if other than Finance Corp.) or the Person to which
such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made assumes all the obligations of Finance Corp., pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee, under
the Notes and this Indenture; and (iii) immediately after such transaction no
Default or Event of Default exists.

         (c) The Partnership or Finance Corp., as the case may be, shall deliver
to the Trustee prior to the consummation of any proposed transaction subject to
the foregoing paragraphs (a) and (b) an Officers' Certificate to the foregoing
effect and an Opinion of Counsel stating that the proposed transaction and such
supplemental indenture comply with this Indenture. The Trustee shall be entitled
to conclusively rely upon such Officers' Certificate and Opinion of Counsel.

                                      -51-
<PAGE>
5.2 Successor Person Substituted.

         Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Partnership or Finance Corp. in accordance with Section 5.1 hereof, the
successor Person formed by such consolidation or into or with which the
Partnership or Finance Corp. is merged or to which such sale, assignment,
transfer, lease, conveyance or other disposition is made shall succeed to, and
be substituted for (so that from and after the date of such consolidation,
merger, sale, lease, conveyance or other disposition, the provisions of this
Indenture referring to the "Partnership," "Finance Corp." or the "Issuers," as
the case may be, shall refer to or include instead the successor Person and not
the Partnership or Finance Corp., as the case may be), and may exercise every
right and power of the Partnership or Finance Corp., as the case may be, under
this Indenture with the same effect as if such successor Person had been named
as the Partnership or Finance Corp., as the case may be, herein.

                        ARTICLE 6: DEFAULTS AND REMEDIES

6.1 Events of Default.

         An "Event of Default" occurs if:

         (1) the Issuers default in the payment of the principal of or premium,
if any, on any Note when the same becomes due and payable (upon Stated Maturity,
acceleration, optional redemption, required purchase, scheduled principal
payment or otherwise); or

         (2) the Issuers default in the payment of an installment of interest
on, or Liquidated Damages, if any, with respect to, any of the Notes, when the
same becomes due and payable, which default continues for a period of 30 days;
or

         (3) either of the Issuers fails to perform or observe any other term,
covenant or agreement contained in the Notes or this Indenture (other than a
default specified in clause (1) or (2) above) and such default continues for a
period of 45 days after written notice of such default requiring the Issuers to
remedy the same shall have been given (x) to the Partnership by the Trustee or
(y) to the Issuers and the Trustee by Holders of 25% in aggregate principal
amount of the Notes then outstanding; or

         (4) a default or defaults occur under one or more agreements,
instruments, mortgages, bonds, debentures or other evidences of Indebtedness
under which the Partnership or any Restricted Subsidiary then has outstanding
Indebtedness, which default (a) is caused by failure to pay (x) principal with
respect to Indebtedness of a Restricted Subsidiary at its Stated Maturity or
within the applicable grace period, if any, provided with respect to such
Indebtedness or (y) principal, premium or interest with respect to Indebtedness
of the Partnership within the applicable grace period, if any, provided in such
Indebtedness (collectively, a "Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its Stated Maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount

                                      -52-
<PAGE>
of any other such Indebtedness under which there has been a Payment Default or
the maturity of which has been so accelerated, aggregates $10 million or more;
or

         (5) a final judgment or judgments (which is or are non-appealable and
non-reviewable or which has or have not been stayed pending appeal or review or
as to which all rights to appeal or review have expired or been exhausted) shall
be rendered against the Partnership, any Restricted Subsidiary, the General
Partner or any Significant Subsidiary for the payment of money in excess of $10
million in the aggregate and which judgment or judgments shall not be covered by
insurance or discharged or execution thereon stayed pending appeal or review
within 60 days after entry of such judgment, or, in the event of such a stay,
such judgment shall not be discharged within 30 days after such stay expires; or

         (6) the Partnership, Finance Corp. or any of their respective
Significant Subsidiaries pursuant to or within the meaning of any Bankruptcy
Law:

                  (a)      commences a voluntary case,

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

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

                  (d)      makes a general assignment for the benefit of its
                           creditors,

                  (e)      admits in writing its inability to pay debts as the
                           same become due; or

         (7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:

                  (a)      is for relief against the Partnership, Finance Corp.
                           or any of their respective Significant Subsidiaries
                           in an involuntary case,

                  (b)      appoints a Custodian of the Partnership, Finance
                           Corp. or any of their respective Significant
                           Subsidiaries or for all or substantially all of their
                           property,

                  (c)      orders the liquidation of the Partnership, Finance
                           Corp. or any of their respective Significant
                           Subsidiaries,

and the order or decree remains unstayed and in effect for 60 days.

         The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.

                                      -53-
<PAGE>
         A Default under clause (3) is not an Event of Default until the Trustee
notifies the Issuers, or the Holders of at least 25% in principal amount of the
then outstanding Notes notify the Issuers and the Trustee, of the Default and
the Issuers do not cure the Default within 45 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default."

         In the case of any Event of Default pursuant to the provisions of this
Section 6.1 occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Issuers with the intention of avoiding payment
of the premium that the Issuers would have had to pay if the Issuers then had
elected to redeem the Notes pursuant to Section 3.7 hereof, an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law, anything in this Indenture or in the Notes to the contrary
notwithstanding

6.2 Acceleration.

         If an Event of Default (other than an Event of Default specified in
clauses (6) and (7) of Section 6.1) occurs and is continuing, the Trustee by
notice to the Issuers, or the Holders of at least 25% in principal amount of the
then outstanding Notes by written notice to the Issuers and the Trustee may
declare the unpaid principal of and any accrued interest on all the Notes to be
due and payable. Upon such declaration the principal and interest shall be due
and payable immediately. If an Event of Default specified in clause (6) or (7)
of Section 6.1 occurs, such an amount shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holder. The Holders of a majority in principal amount of the then
outstanding Notes by written notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or waived.

6.3 Other Remedies.

         If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy (under this Indenture or otherwise) to collect the payment
of principal or interest on the Notes or to enforce the performance of any
provision of the Notes, this Indenture or the Registration Rights Agreement.

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

                                      -54-
<PAGE>
6.4 Waiver of Past Defaults.

         Holders of a majority in principal amount of the then outstanding Notes
by notice to the Trustee may waive an existing Default or Event of Default and
its consequences, except a continuing Default or Event of Default in the payment
of the principal of, premium, if any or interest on, or Liquidated Damages with
respect to any Note held by a non-consenting Holder. 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.

6.5 Control by Majority.

         The Holders of a majority in principal amount of the then outstanding
Notes may 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
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture that the Trustee determines may be unduly prejudicial to
the rights of other Holders of Notes, or that may involve the Trustee in
personal liability.

6.6 Limitation on Suits.

         A Holder of Notes may pursue a remedy with respect to this Indenture or
the Notes only if:

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

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

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

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

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

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

6.7 Rights of Holders to Receive Payment.

         Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and interest on, or
Liquidated Damages, if any, with respect to the Notes, on or after the
respective due dates expressed in the Note, or to bring suit for the

                                      -55-
<PAGE>
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.

6.8 Collection Suit by Trustee.

         If an Event of Default specified in Section 6.1(1) or (2) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Issuers for the whole amount of
principal and interest remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

6.9 Trustee May File Proofs of Claim.

         The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of Notes allowed in any judicial proceedings relative to the Issuers (or
any other obligor upon the Notes), their creditors or their property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder of Notes 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 of Notes, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.7 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the
Holders of the Notes may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder of Notes any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder of Notes in any such proceeding.

6.10 Priorities.

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

         First: to the Trustee, its agents and attorneys for amounts due under
Section 7.7, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;

                                      -56-
<PAGE>
         Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium, Liquidated Damages and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on the Notes
for principal and interest, respectively; and

         Third: to the Issuers or to such party as a court of competent
jurisdiction shall direct.

         The Trustee may fix a record date and payment date for any payment to
Holders of Notes.

6.11 Undertaking for Costs.

         In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.

                               ARTICLE 7: TRUSTEE

7.1 Duties of Trustee.

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

         (2) Except during the continuance of an Event of Default:

                  (a)      The duties of the Trustee shall be determined solely
                           by the express provisions of this Indenture and the
                           Trustee need perform only those duties that are
                           specifically set forth in this Indenture and no
                           others, and no implied covenants or obligations shall
                           be read into this Indenture against the Trustee.

                  (b)      In the absence of bad faith on its part, the Trustee
                           may conclusively rely, as to the truth of the
                           statements and the correctness of the opinions
                           expressed therein, upon certificates or opinions
                           furnished to the Trustee and conforming to the
                           requirements of this Indenture. However, the Trustee
                           shall examine the certificates and opinions to
                           determine whether or not they conform to the
                           requirements of this Indenture.

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

                                      -57-
<PAGE>
                  (a)      This paragraph does not limit the effect of paragraph
                           (2) of this Section.

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

                  (c)      The Trustee shall not be liable with respect to any
                           action it takes or omits to take in good faith in
                           accordance with a direction received by it pursuant
                           to Section 6.5.

         (4) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(1), (2) and (3) of this Section.

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

         (6) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuers. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.

7.2 Rights of Trustee.

         Subject to the provisions of Sections 315(a) through 315(d) of
the TIA:

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

         (2) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. 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 from liability, in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.

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

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

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

                                      -58-
<PAGE>
Partner, on behalf of the Partnership (or the Partnership, if the Partnership is
a corporation) or by an Officer of Finance Corp.

7.3 Definitive Rights of Trustee.

         The Trustee in its individual or any other capacity may become the
Holder or pledgee of Notes and may otherwise deal with the Partnership, Finance
Corp. or an Affiliate of the Partnership or Finance Corp. with the same rights
it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to Sections 7.10 and 7.11.

7.4 Trustee's Disclaimer.

         The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Notes or any money
paid to the Issuers or upon the Issuers' direction under any provision hereof,
it shall not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication and that it is duly authorized to execute
and deliver this Indenture, authenticate the Notes and perform its obligations
hereunder and that the statements made by it in a Statement of Eligibility and
Qualification on Form T-1, if any, supplied to the Issuers are true and accurate
subject to the qualifications set forth therein.

7.5 Notice of Defaults.

         If a Default or Event of Default occurs and is continuing and if it is
known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders
of Notes a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment on any
Note pursuant to Section 6.1(1) or (2), the Trustee may withhold the notice if
it determines in good faith that withholding the notice is in the interests of
Holders of Notes.

7.6 Reports by Trustee to Holders.

         Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to Holders of Notes a brief
report dated as of such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the twelve
months preceding the reporting date, no report need be transmitted). The Trustee
also shall comply with TIA Section 313(b). The Trustee shall also transmit by
mail all reports as required by TIA Section 313(c).

         Commencing at the time this Indenture is qualified under the TIA, a
copy of each report at the time of its mailing to Holders of Notes shall be
filed with the SEC and each stock exchange on which the Notes are listed. The
Issuers shall promptly notify the Trustee when the Notes are listed on any stock
exchange.

7.7 Compensation and Indemnity.

                                      -59-
<PAGE>

         The Issuers shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuers shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel, except such disbursements, advances and expenses as may be
attributable to its negligence or bad faith.

         The Issuers shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it without negligence or bad faith on its
part arising out of or in connection with the acceptance or administration of
its duties under this Indenture, except as set forth below. The Trustee shall
notify the Issuers promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Issuers shall not relieve the Issuers of
their obligations hereunder. The Issuers shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Issuers shall pay the reasonable fees and expenses of such counsel. Neither the
Partnership nor Finance Corp. need pay for any settlement made without their
consent, which consent shall not be unreasonably withheld.

         The obligations of the Issuers under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.

         The Issuers need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or bad
faith.

         To secure the Issuers' payment obligations in this Section, the Issuers
hereby grant to the Trustee a Lien prior to the Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.

         When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

7.8 Replacement of Trustee.

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

         The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Issuers. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers. The Issuers may remove the Trustee if:

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

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

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

         (4) the Trustee becomes incapable of acting.

         If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.

         If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Partnership,
Finance Corp. or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

         If the Trustee after written request by any Holder of Notes who has
been a Holder of Notes for at least six months fails to comply with Section
7.10, such Holder of Notes may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.

         A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Notes. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums owing
to the Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.7. Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Issuers' obligations under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee.

7.9 Successor Trustee by Merger, etc.

         If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.

7.10 Eligibility; Disqualification.

         There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trust powers, shall be subject to supervision or examination by Federal or state
authority and shall have a combined capital and surplus of at least $100,000,000
as set forth in its most recent published annual report of condition.

                                      -61-
<PAGE>
         This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1) and 310(a)(5). The Trustee is
subject to TIA Section 310(b).

7.11 Preferential Collection of Claims Against Issuers.

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

               ARTICLE 8: LEGAL DEFEASANCE AND COVENANT DEFEASANCE

8.1 Option to Effect Legal Defeasance or Covenant Defeasance.

         The Issuers may, at the option of the Board of Directors of the General
Partner, on behalf of the Partnership (or the Partnership, if the Partnership is
a corporation), and the Board of Directors of Finance Corp., in each case
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to apply either Section 8.2 or 8.3 hereof to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.

8.2 Legal Defeasance and Discharge.

         Upon the Issuers' exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Issuers shall, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Issuers shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.5 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all their other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Issuers, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section 8.4
hereof, and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, interest and Liquidated Damages, if any, on such
Notes when such payments are due, (b) the Issuers' obligations with respect to
outstanding Notes under Article 2 and Section 4.2 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Issuers'
obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Issuers may exercise their option under this
Section 8.2 notwithstanding the prior exercise of their option under Section 8.3
hereof.

8.3 Covenant Defeasance.

         Upon the Issuers' exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, each of the Issuers shall, subject to the
satisfaction of the conditions set forth in Section 8.4

                                      -62-
<PAGE>
hereof, be released from their obligations under the covenants contained in
Section 4.3(a), 4.4, 4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15,
4.16 and 4.17 and Article 5 hereof with respect to the outstanding Notes on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Issuers may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein or in any other document, and such omission to comply shall not
constitute a Default under Section 6.1 hereof, but, except as specified above,
the remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Issuers' exercise under Section 8.1 hereof of the option
applicable to this Section 8.3 hereof, subject to the satisfaction of the
conditions set forth in Section 8.4 hereof, Sections 6.1(3), 6.1(4) and 6.1(5)
hereof, and Sections 6.1(6) and 6.1(7) hereof with respect to any Restricted
Subsidiary that is a Significant Subsidiary, shall not constitute Events of
Default.

8.4 Conditions to Legal Defeasance or Covenant Defeasance.

         The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Notes:

         In order to exercise either Legal Defeasance or Covenant Defeasance, as
applicable:

         (a) the Issuers must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
certified public accountants, to pay the principal of, premium and Liquidated
Damages, if any, and interest on the outstanding Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may be;

         (b) in the case of an election under Section 8.2 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
not unacceptable to the Trustee in its reasonable discretion confirming that (A)
the Issuers have received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there has been
a change in the applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the Holders
of the outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred (which
opinion need not address the effect of a transfer or other disposition of a
Holder's interest in a Note before the stated maturity or applicable redemption
date);

         (c) in the case of an election under Section 8.3 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
not unacceptable to the Trustee in its

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reasonable discretion confirming that the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred (which opinion need not
address the effect of a transfer or other disposition of a Holder's interest in
a Note before the stated maturity or applicable redemption date);

         (d) no Default shall have occurred and be continuing on the date of
such deposit or insofar as Section 6.1(6) or 6.1(7) hereof are concerned, at any
time in the period ending on the 91st day after the date of deposit;

         (e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violations of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which either of the Issuers or any
of their respective Restricted Subsidiaries is a party or by which either of the
Issuers or any of their respective Restricted Subsidiaries is bound;

         (f) on or prior to the 91st day following the deposit, the Issuers
shall have delivered to the Trustee an Opinion of Counsel to the effect that on
the 91st day following the deposit, the trust funds are not subject to any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;

         (g) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the intent
of preferring the Holders over any other creditors of the Issuers or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Issuers; and

         (h) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.

8.5 Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions.

         Subject to Section 8.6 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.5, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Issuers acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.

         The Issuers shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to

                                      -64-
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Section 8.4. hereof 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 the outstanding Notes.

8.6 Repayment to Issuers.

         (a) Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuers from time to time upon the request
of the Issuers any money or non-callable Government Securities held by it as
provided in Section 8.4 hereof which, in the opinion of a nationally recognized
firm of independent certified public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(a) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.

         (b) Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Issuers upon request any money held by them
for the payment of principal, interest, premium or Liquidated Damages, if any,
that remains unclaimed for one year after such principal, interest, premium or
Liquidated Damages, if any, became due and payable, and, thereafter, Holders
entitled to the money must look to the Issuers for payment of such money as
secured creditors and all liability of the Trustee and the Paying Agent with
respect to such money shall cease.

8.7 Reinstatement.

         If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.2 or
8.3 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers' obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.2 or 8.3 hereof,
as the case may; provided that, if the Issuers make any payment of principal of,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Issuers shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.

8.8 Discharge of Liability on Securities; Defeasance.

         When (a)(i) the Issuers deliver to the Trustee all outstanding Notes
for cancellation or (ii) all outstanding Notes have become due and payable,
whether at maturity or on a specified redemption date as a result of the mailing
of a notice of redemption pursuant to Article 3 hereof, (b) the Issuers
irrevocably deposit with the Trustee money sufficient to pay at maturity or upon
redemption all outstanding Notes, including interest, premium and Liquidated
Damages thereon to maturity or such redemption date, and if in either case the
Issuers pay all other sums payable hereunder by the Issuers, and (c) if the
Notes have been called for redemption and the redemption date has not occurred,
the Issuers deliver to the Trustee an Opinion of Counsel in the United States
not unacceptable to the Trustee in its reasonable discretion confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a

                                      -65-
<PAGE>
result of such actions and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such actions had not occurred, then this Indenture shall cease to be of further
effect except for (i) the provisions set forth in Article 2, Sections 4.2, 7.7
and 8.6 hereof and (ii) if the Notes have been called for redemption and the
redemption date has not occurred, the Issuers' obligation to pay the redemption
price on such redemption date. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on demand of the Issuers accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Issuers.

                              ARTICLE 9: AMENDMENTS

9.1 Without Consent of Holders.

         The Partnership, Finance Corp. and the Trustee may amend this Indenture
or the Notes without the consent of any Holder of Notes:

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

         (2) to comply with Article 5;

         (3) to provide for uncertificated Notes in addition to or in place of
certificated Notes;

         (4) to add Guaranties with respect to the Notes;

         (5) to provide security for the Notes;

         (6) to make any change that would provide additional rights or benefits
to the Holders of the Notes or that does not adversely affect the legal rights
hereunder and under the Registration Rights Agreement of any Holder of the
Notes; or

         (7) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.

         Upon the request of the Partnership and Finance Corp., accompanied by a
resolution of the Board of Directors of the General Partner on behalf of the
Partnership (or the Partnership, if the Partnership is a corporation) and the
Board of Directors of Finance Corp., authorizing the execution of any such
supplemental indenture or amendment, and upon receipt by the Trustee of the
documents described in Section 9.6 hereof required or requested by the Trustee,
the Trustee shall join with the Partnership and Finance Corp. in the execution
of any supplemental indenture or amendment authorized or permitted by the terms
of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into such supplemental indenture or amendment which affects
its own rights, duties or immunities under this Indenture or otherwise.

9.2 With Consent of Holders.

                                      -66-
<PAGE>

         The Partnership, Finance Corp. and the Trustee, as applicable, may
amend this Indenture or the Notes with the written consent of the Holders of at
least a majority in principal amount of the then outstanding Notes and, subject
to Sections 6.4 and 6.7 hereof, the Holders of a majority in principal amount of
the Notes then outstanding may waive compliance in a particular instance by the
Partnership or Finance Corp. with any provision of this Indenture or the Notes;
provided, however, that notwithstanding the above, the written consent of the
Holders of at least 75% in principal amount of the then outstanding Notes shall
be required to waive compliance with or to amend Section 4.18 hereof.

         Upon the request of the Partnership and Finance Corp., accompanied by a
resolution of the Board of Directors of the General Partner on behalf of the
Partnership (or the Partnership, if the Partnership is a corporation) and the
Board of Directors of Finance Corp., authorizing the execution of any such
supplemental indenture, amendment or waiver, and upon the filing with the
Trustee of evidence satisfactory to the Trustee of the consent of the Holders of
Notes as aforesaid, and upon receipt by the Trustee of the documents described
in Section 9.6 hereof, the Trustee shall join with the Partnership and Finance
Corp. in the execution of such supplemental indenture or amendment unless such
supplemental indenture, amendment or waiver affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture, amendment or waiver.

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

         After a supplemental indenture, amendment or waiver under this Section
becomes effective, the Issuers shall mail to the Holders of each Note affected
thereby a notice briefly describing the supplemental indenture, amendment or
waiver. Any failure of the Issuers to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture, amendment or waiver. Without the consent of each Holder
of Notes affected, an amendment or waiver under this Section may not (with
respect to any Notes held by a non-consenting Holder of Notes):

         (1) reduce the principal amount of Notes whose Holders must consent to
an amendment or waiver;

         (2) reduce the rate of or change the time for payment of interest or
Liquidated Damages, if any, including default interest, on any Note;

         (3) reduce the principal of or change the fixed maturity of any Note,
alter the optional redemption provisions of any Note or reduce the prices at
which the Issuers shall offer to purchase such Notes pursuant to Sections 3.10,
4.16 and 4.17 hereof, provided, however, that such Sections 3.10, 4.16 and 4.17
may otherwise be amended or deleted in accordance with the requirements of this
Section 9.2;

         (4) make any Note payable in money other than that stated in the Note;

                                      -67-
<PAGE>
         (5) make any change in Section 6.4 or 6.7 hereof or in this Section
9.2; or

         (6) waive a Default in the payment of principal of or interest or
Liquidated Damages, if any, on, or redemption payment with respect to, any Note
(other than a Default in the payment of an amount due as a result of an
acceleration if the Holders of Notes rescind such acceleration pursuant to
Section 6.2).

9.3 Compliance with Trust Indenture Act.

         If at the time of an amendment to this Indenture or the Notes, this
Indenture shall be qualified under the TIA, every amendment to this Indenture or
the Notes shall be set forth in a supplemental indenture that complies with the
TIA as then in effect.

9.4 Relocation and Effect of Consents.

         Until a supplemental indenture, an amendment or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. A supplemental indenture, amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder of
Notes.

         The Issuers may fix a record date for determining which Holders must
consent to such supplemental indenture, amendment or waiver. If the Issuers fix
a record date, the record date shall be fixed at (i) the later of 30 days prior
to the first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee prior to such solicitation pursuant to Section
2.5, or (ii) such other date as the Issuers shall designate.

9.5 Notation on or Exchange of Notes.

         The Trustee may place an appropriate notation about a supplemental
indenture, amendment or waiver on any Note thereafter authenticated. The Issuers
in exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment or waiver.

         Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment or waiver.

                                      -68-
<PAGE>
9.6 Trustee to Sign Amendments, etc.

         The Trustee shall sign any amendment, supplemental indenture or waiver
authorized pursuant to this Article 9 if the amendment, supplemental indenture
or waiver does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing or refusing to sign such amendment, supplemental indenture or waiver,
the Trustee shall be entitled to receive, if requested, an indemnity reasonably
satisfactory to it and to receive and, subject to Section 7.1, shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that such amendment, supplemental indenture or waiver is
authorized or permitted by this Indenture, that it is not inconsistent with this
Indenture, and that it will be valid and binding upon the Issuers in accordance
with its terms. Neither the Partnership nor Finance Corp. may sign an amendment,
supplemental indenture or waiver until the Board of Directors of the General
Partner on behalf of the Partnership (or the Partnership, if the Partnership is
a corporation) or the Board of Directors of Finance Corp. approves it.

                    ARTICLE 10: MISCELLANEOUS MISCELLANEOUS

10.1 Trust Indenture Act Controls.

         If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control. If
any provision of this Indenture modifies or excludes any provision of the TIA
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

10.2 Notices.

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

         If to the Issuers:

         AmeriGas Partners, L.P.
         AP Eagle Finance Corp.
         P.O. Box 965
         Valley Forge, Pennsylvania 19482
         Attention:  President
         Telecopier No.:  (610) 992-3254

         or, in the case of couriers that can not deliver to post office boxes:

         460 North Gulph Road
         King of Prussia, Pennsylvania 19406
         Attention:  President

                                      -69-
<PAGE>
         If to the Trustee:

         First Union National Bank
         123 South Broad Street
         Philadelphia, Pennsylvania 19109
         Attn: Corporate Trust Administration
         Telecopier No.: (215) 670-6340

         The Issuers or the Trustee by notice to the others may designate
additional or different addresses of subsequent notices or communications.

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

         Any notice or communication to a Holder of Notes shall be mailed by
first-class mail, certified or registered, return receipt requested, to his
address shown on the register kept by the Registrar. Failure to mail a notice or
communication to a Holder of Notes or any defect in it shall not affect its
sufficiency with respect to other Holders of Notes. If a notice or communication
is mailed in the manner provided above within the time prescribed, it is duly
given, whether or not the addressee receives it.

         In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.

         If the Issuers mail a notice or communication to Holders of Notes, it
shall mail a copy to the Trustee and each Agent at the same time.

10.3 Communication by Holders with Other Holders.

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

10.4 Certificate and Opinion as to Conditions Precedent.

         Upon any request or application by the Partnership or Finance Corp. to
the Trustee to take any action under this Indenture, the Partnership or Finance
Corp. shall furnish to the Trustee:

         (1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 10.5) stating that, in the opinion

                                      -70-
<PAGE>
of the signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been complied with; and

         (2) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 10.5)
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been complied with;

provided, however, in the case of any such application or request as to which
the furnishing of such certificates and/or opinions is specifically required by
any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.

10.5 Statements Required in Certificate or Opinion.

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

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

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

         (3) a statement that, in the opinion of such Person, he 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

a statement as to whether or not, in the opinion of such Person, such condition
or covenant has been complied with; provided, however, that with respect to
matters of fact, an Opinion of Counsel may rely upon an Officers' Certificate or
a certificate of a public official.

10.6 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 Issuers, may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows 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
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 Issuers stating
that the information with respect to such factual matters is in the

                                      -71-
<PAGE>
possession of the Issuers, unless such counsel knows that the certificate or
opinion or representations with respect to such matters are erroneous. Opinions
of Counsel required to be delivered to the Trustee may have qualifications
customary for opinions of the type required and counsel delivering such Opinions
of Counsel may rely on certificates of the Issuers or government or other
officials customary for opinions of the type required, including certificates
certifying as to matters of fact, including that various financial covenants
have been complied with.

         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.

10.7 Rules by Trustee and Agents.

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

10.8 Legal Holidays.

         A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in The City of New York, in the city in which the Corporate Trust
Office of the Trustee is located or at a place of payment are authorized or
obligated by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.

10.9 No Recourse Against Others.

         (a) No director, officer, employee, agent, manager, partner, interest
holder or stockholder of the Partnership or Finance Corp., as such, shall have
any liability for any obligations of the Partnership or Finance Corp. under the
Notes or this Indenture or for any claim based on, in respect of or by reason of
such obligations. Each Holder of Notes, by accepting a Note, waives and releases
all such liability. The waiver and release shall be part of the consideration
for the issuance of the Notes.

         (b) The obligations of the Issuers under this Indenture and the Notes
will be non-recourse to the General Partner and the Operating Partnership (and
their respective affiliates (other than the Issuers)) and payable only out of
the cash flow and assets of the Issuers. The Trustee agrees, and each Holder of
a Note, by accepting a Note, will be deemed to have agreed in this Indenture
that neither the General Partner nor its assets nor the Operating Partnership
nor its assets (nor any of their respective affiliates (other than the Issuers)
nor their respective assets) shall be liable for any of the obligations of the
Issuers under this Indenture or the Notes. In addition, neither the Partnership
nor the Holders of Notes will have any right to require the Operating
Partnership to make distributions to the Partnership.

                                      -72-
<PAGE>
         (c) Notwithstanding the foregoing, nothing in this provision shall be
construed as a waiver or release of any claims under the federal securities
laws.

10.10 Duplicate Originals.

         The parties may sign any number of copies of this Indenture. One signed
copy is enough to prove this Indenture.

10.11 Governing Law.

         This Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York but without giving effect to
applicable principles of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.

10.12 No Adverse Interpretation of Other Agreements.

         This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Partnership or Finance Corp. or their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

10.13 Successors.

         All agreements of the Partnership and Finance Corp. in this Indenture
and the Notes shall bind their successors. All agreements of the Trustee in this
Indenture shall bind its successor.

10.14 Benefits of Indenture.

         Nothing in this Indenture or in the Notes, expressed or implied, shall
give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent and the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture.

10.15 Severability.

         In case any provision in this Indenture or in the Notes 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.

                                      -73-
<PAGE>
10.16 Counterpart Originals.

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

10.17 Table of Contents, Headings, etc.

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

                         [signatures on following page]

                                      -74-
<PAGE>
                                   SIGNATURES

         IN WITNESS WHEREOF, the undersigned have caused this Indenture to be
executed as of the date first above written.

                             AMERIGAS PARTNERS, L.P., by AmeriGas Propane, Inc.,
                             as General Partner

                               -------------------------------------------------
                               Name: Martha B. Lindsay
                               Title: Vice President and Chief Financial Officer

                             AP EAGLE FINANCE CORP.

                               -------------------------------------------------
                               Name: Martha B. Lindsay
                               Title: Vice President and Chief Financial Officer

                             FIRST UNION NATIONAL BANK

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

                                      -75-
<PAGE>
                                                                       EXHIBIT A

                                 [Face of Note]

                             AMERIGAS PARTNERS, L.P.
                             AP EAGLE FINANCE CORP.

                    8-7/8% SERIES [A/B] SENIOR NOTE DUE 2011

                                                  No.     $_____________________
                                                          CUSIP NO. ____________

         AmeriGas Partners, L.P., a Delaware limited partnership, and AP Eagle
Finance Corp., a Delaware corporation, jointly and severally, promise to pay to
__________________________ or registered assigns the principal sum of
____________________ Dollars on ____________, 2011

         Interest Payment Dates: May 20 and November 20

         Record Dates: May 5 and November 5

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

         IN WITNESS WHEREOF, the Issuers have caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.

Dated:

                                                     AMERIGAS PARTNERS, L.P.
                                                     By: AMERIGAS PROPANE, INC.,
                                                         its General Partner

                          [Seal]                         By:____________________

                                                         By:____________________

Certificate of Authentication:                       AP EAGLE FINANCE CORP.

First Union National Bank, as Trustee, certifies
that this is one of the Global Notes referred to         By:____________________
in the within-mentioned Indenture.

                                  Exhibit A-1
<PAGE>
By____________________________                       By:________________________
  Authorized Signature

         Additional provisions of this Note are set forth on the other side of
this Note.

                                  Exhibit A-2
<PAGE>
         [Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. The Depository Trust Company shall act as the Depositary until a
successor shall be appointed by the Issuers and the Registrar. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York, New York) ("DTC"), to the issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as may be
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as may be 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.](1)

         [THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
         SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
         ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
         WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
         PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
         HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (1) REPRESENTS
         THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
         144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED THIS NOTE
         IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
         SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
         DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE
         SECURITIES ACT (AN "IAI"), (2) AGREES THAT IT WILL NOT RESELL OR
         OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO AMERIGAS PARTNERS, L.P., AP
         EAGLE FINANCE CORP. OR ANY OF THEIR RESPECTIVE SUBSIDIARIES, (B) TO A
         PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS
         OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
         REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
         REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A
         TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
         ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE
         A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
         RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE
         OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
         AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF
         COUNSEL ACCEPTABLE TO AMERIGAS PARTNERS, L.P. THAT SUCH TRANSFER IS IN
         COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER
         EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE

----------
(1) This paragraph should be included only if the Note is issued in global form.

                                  Exhibit A-3
<PAGE>
         SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO
         AMERIGAS PARTNERS, L.P.) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
         STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
         SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
         APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH
         PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
         SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS
         "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO
         THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
         INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
         REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.](2)

----------
(2) This legend should only be included on Series A Notes.

                                  Exhibit A-4
<PAGE>
                                [Reverse of Note]

                             AMERIGAS PARTNERS, L.P.
                             AP EAGLE FINANCE CORP.

                    8-7/8% SERIES [A/B] SENIOR NOTE DUE 2011

         1. Interest. AmeriGas Partners, L.P., a Delaware limited partnership
(the "Partnership"), and AP Eagle Finance Corp., a Delaware corporation
("Finance Corp." and, together with the Partnership, the "Issuers"), jointly and
severally promise to pay interest on the principal amount of this Note at 8-7/8%
per annum from August 21, 2001 until maturity and to pay Liquidated Damages
payable pursuant to Section 5 of the Registration Rights Agreement referred to
below. The Issuers will pay interest and Liquidated Damages, if any,
semiannually on May 20 and November 20 of each year (each an "Interest Payment
Date"), or if any such day is not a Business Day, on the next succeeding
Business Day. Interest on the Notes will accrue from the most recent Interest
Payment Date on which interest has been paid or, if no interest has been paid,
from August 21, 2001; provided, that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be November 20, 2001. The
Issuers shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the interest rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.

         2. Method of Payment. The Issuers will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the record date
immediately preceding the Interest Payment Date, except as provided in Section
2.12 of the Indenture with respect to defaulted interest. The Notes will be
payable as to principal, premium, interest and Liquidated Damages, if any, at
the office or agency of the Issuers maintained for such purpose within or
without the City and State of New York, or, at the option of the Issuers,
payment of interest and Liquidated Damages, if any, may be made by check mailed
to the Holders at their respective addresses set forth in the register of
Holders; provided that payment by wire transfer of immediately available/same
day funds will be required with respect to principal of and interest, premium
and Liquidated Damages, if any, on, all Global Notes. Such payment shall be 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.

         3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent, Registrar
or co-registrar without notice. The Issuers or any of their Subsidiaries may act
as Paying Agent or Registrar.

                                   Exhibit A-5
<PAGE>
         4. Indenture. The Issuers issued the Notes under an Indenture, dated
August 21, 2001 (the "Indenture"), among the Issuers and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code Sections 77aaa-77bbb) as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. The Notes are unsecured senior general
obligations of the Issuers. Subject to compliance with Section 4.8 and the other
terms of the Indenture, the Issuers are permitted to issue more notes after the
Issue Date under the Indenture in an unlimited amount (the "Additional Notes").
The Additional Notes subsequently issued under the Indenture shall be treated as
a single class for all purposes under the Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase.

         5. Optional Redemption. The Notes are not redeemable prior to May 20,
2006. Thereafter, the Notes will be subject to redemption at the option of the
Issuers, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest thereon and Liquidated
Damages, if any, to the applicable redemption date, if redeemed during the
12-month period beginning on May 20 of the years indicated below:

<TABLE>
<CAPTION>
           YEAR                                                      PERCENTAGE
           ----                                                      ----------
<S>                                                                  <C>
           2006...............................................       104.438%
           2007...............................................       102.958%
           2008...............................................       101.479%
           2009 and thereafter................................       100.000%
</TABLE>

         In the event that, on or prior to May 20, 2004, the Partnership
consummates a public offering of its Capital Stock (other than Redeemable
Capital Stock), then within 90 days of the consummation of such public offering
the Partnership, at its option, may use the net proceeds of such public offering
to redeem Notes at 108.875% of the principal amount thereof, plus accrued and
unpaid interest to the applicable redemption date and Liquidated Damages, if
any; provided, however, that at least 67% of the Notes originally issued,
together with any Additional Notes, shall be outstanding immediately after such
redemption. Only one redemption may be made pursuant to the provision described
in this paragraph.

         6. Special Mandatory Redemption. If the Acquisition has not been
consummated prior to the Special Mandatory Redemption Event, then the Issuers
shall redeem or cause to be redeemed, all outstanding Notes within 15 days
following the Special Mandatory Redemption Event, at a redemption price equal to
101% of the principal thereof, plus accrued and unpaid interest to the
redemption date.

         7. Notice of Redemption. Other than in connection with a Special
Mandatory Redemption, notice of redemption will be mailed to the Holder's
registered address at least 30 days but not more than 60 days before the
redemption date to each Holder of Notes to be

                                  Exhibit A-6
<PAGE>
redeemed. If less than all Notes are to be redeemed, the Trustee shall select
the Notes to be redeemed in multiples of $1,000. Notes in denominations larger
than $1,000 may be redeemed in part. On and after the redemption date interest
ceases to accrue on Notes or portions of them called for redemption (unless the
Issuers shall default in the payment of the redemption price or accrued
interest).

         Upon the occurrence of a Special Mandatory Redemption, the Issuers
shall mail or cause to be mailed a notice of redemption by first class mail,
postage prepaid, to each Holder, with a copy to the Trustee and Paying Agent;
provided that failure to provide timely notice of a Special Mandatory Redemption
to the Holders, Trustee or the Paying Agent shall not affect the Issuers'
obligation to effect a Special Mandatory Redemption, or the amount of the
Issuers' obligation on the Notes.

         8. Change of Control. In the event of a Change of Control of the
Partnership, the Issuers shall be required to make an offer to purchase all or
any portion of each Holder's Notes, at 101% of the principal amount thereof,
plus accrued interest to the Change of Control Payment Date.

         9. Asset Sale Offer. In the event of certain Asset Sales, the Issuers
may be required to make an Asset Sale Offer to purchase all or any portion of
each Holder's Notes, at 100% of the principal amount of the Notes plus accrued
interest to the Purchase Date.

         10. Restrictive Covenants. The Indenture imposes certain limitations
on, among other things, the ability of the Partnership and Finance to merge or
consolidate with any other Person or sell, lease or otherwise transfer all or
substantially all of their respective properties or assets, the ability of the
Partnership or its Restricted Subsidiaries to dispose of certain assets, to pay
dividends and make certain other distributions and payments, to make certain
investments or redeem, retire, repurchase or acquire for value shares of Capital
Stock, to incur additional Indebtedness or incur encumbrances against certain
property and to enter into certain transactions with Affiliates, all subject to
certain limitations described in the Indenture.

         11. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Notes selected for redemption. Also, it need not transfer or exchange any
Notes for a period of 15 days before a selection of Notes to be redeemed.

         12. Persons Deemed Owners. The registered Holder of a Note may be
treated as the owner of it for all purposes and neither the Issuers, the Trustee
nor any Agent shall be affected by notice to the contrary.

         13. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for one year, the Trustee or Paying Agent will pay the money
back to the Issuers at its request. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.

                                  Exhibit A-7
<PAGE>
         14. Amendment, Supplement, Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Notes, and any past
default or noncompliance with any provision may be waived with the consent of
the Holders of a majority in principal amount of the Notes. Without the consent
of any Holder, the Issuers may amend or supplement the Indenture or the Notes
to, among other things, cure any ambiguity, defect or inconsistency or to
provide for uncertificated Notes in addition to certificated Notes or to make
any change that does not adversely affect the rights of any Holder.

         15. Defaults and Remedies. An event of default generally is: default by
the Issuers for 30 days in payment of interest on the Notes; default by the
Issuers in payment of principal of or premium, if any, on the Notes; default by
the Issuers in the deposit of any optional redemption payment when due and
payable; defaults resulting in acceleration prior to maturity of certain other
Indebtedness or resulting from payment defaults under certain other
Indebtedness; failure by the Issuers for 45 days after notice to comply with any
of its other agreements in the Indenture; certain final judgments against the
Issuers; and certain events of bankruptcy or insolvency. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately,
except that in the case of an Event of Default arising from certain events of
bankruptcy, insolvency or reorganization relating to either of the Issuers or
their Significant Subsidiaries, all outstanding Notes shall become due and
payable immediately without further action or notice. Holders may not enforce
the Indenture or the Notes except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Notes. Subject to certain limitations, Holders of a majority in principal amount
of the Notes may direct the Trustee in its exercise of any trust or power. The
Issuers must furnish an annual compliance certificate to the Trustee.

         16. Trustee Dealings with Issuers. First Union National Bank, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with the Issuers or their
respective Subsidiaries or Affiliates with the same rights it would have if it
were not Trustee.

         17. No Recourse Against Others. A director, officer, employee, agent,
manager, interest holder or stockholder, as such, of the Issuers, shall not have
any liability for any obligations of the Issuers under the Notes or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.

         The obligations of the Issuers under the Indenture and the Notes will
be non-recourse to the General Partner and the Operating Partnership (and their
respective Affiliates (other than the Issuers)), and payable only out of the
cash flow and assets of the Issuers. The Trustee has, and each Holder of a Note,
by accepting a Note will be deemed to have, agreed in the Indenture that neither
the General Partner nor its assets nor the Operating Partnership nor its assets
(nor any of their

                                   Exhibit A-8
<PAGE>
respective affiliates (other than the Issuers)) nor their respective assets,
shall be liable for any of the obligations of the Issuers under the Indenture or
the Notes. In addition, neither the Partnership nor the Holders of Notes will
have any right to require the Operating Partnership to make distributions to the
Partnership.

         18. Authentication. This Note shall not be valid until the Trustee or
an authenticating agent signs the certificate of authentication on the other
side of this Note.

         19. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants
by the entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).

         20. Additional Rights of Holders of Transfer Restricted Notes. In
addition to the rights provided by Holders of Notes under the Indenture, Holders
of Transfer Restricted Notes shall have all the rights set forth in the
Registration Rights Agreement, dated as of the Issue Date (the "Registration
Rights Agreement"), among the Issuers and the Initial Purchasers.

         21. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Securities Identification Procedures, the Issuers will
cause CUSIP numbers to be printed on the Notes as a convenience to Holder of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.

         The Issuers will furnish to any Holder upon written request and without
charge a copy of the Indenture or Registration Rights Agreement. Requests may be
made to: AmeriGas Partners, L.P., 460 North Gulph Road, King of Prussia,
Pennsylvania 19406, Attention: Secretary.

                                   Exhibit A-9
<PAGE>
                                 ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to:
_________________________________________________________
  (Insert assignee's social security or tax I.D. no.)

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________
  (Print or type assignee's name, address and zip code)

and irrevocably appoint_____________________________________ as agent to
transfer this Note on the books of the Issuers. The agent may substitute another
to act for him.

Your Signature:____________________________________________________________
       (Sign exactly as your name appears on the other side of this Note)

Date: _________________

Signature Guarantee:__________________________________________

                                  Exhibit A-10
<PAGE>
                   FORM OF OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Issuers
pursuant to Section 4.16 or Section 4.17 of the Indenture, check the appropriate
box:

         Section 4.16  [   ]   Section 4.17  [   ]

         If you want to have only part of this Note purchased by the Issuers
pursuant to Section 4.16 or Section 4.17 of the Indenture, state the amount (in
integral multiples of $1,000):

$

Date:                            Signature:
      ----------------                     -------------------------------------
                                 (Sign exactly as your name appears on the other
                                 side of this Note)

Signature Guarantee:
                    -------------------------------------------------

                                  Exhibit A-11
<PAGE>
                   SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE(*)

The following exchanges of a part of this Global Note for Definitive Notes have
been made:

<TABLE>
<CAPTION>
                                                                            Principal Amount of           Signature of
                     Amount of decrease in      Amount of increase in        this Global Note          authorized officer
                     Principal Amount of         Principal Amount of          following such           of Trustee or Note
Date of Exchange      this Global Note            this Global Note         decrease (or increase)          Custodian
----------------      ----------------            ----------------         ----------------------          ---------
<S>                  <C>                        <C>                        <C>                         <C>

</TABLE>

----------
(*) This should be included only if the Note is issued in global form.

                                  Exhibit A-12
<PAGE>
                                                                       EXHIBIT B

                    CERTIFICATE TO BE DELIVERED UPON EXCHANGE
                      OR REGISTRATION OF TRANSFER OF NOTES

Re:      8-7/8% Series A Senior Notes due 2011 of AmeriGas Partners, L.P. and AP
         Eagle Finance Corp.

         This Certificate relates to $_____ principal amount of Notes held in *
_______ book-entry or * ______ definitive form by _________________ (the
"Transferor").

The Transferor *:

-        has requested the Trustee by written order to deliver in exchange for
         its beneficial interest in the Global Note held by the Depositary a
         Note or Notes in definitive, registered form equal to its beneficial
         interest in such Global Note (or the portion thereof indicated above);
         or

-        has requested the Trustee by written order to exchange or register the
         transfer of a Note or Notes.

         In connection with such request and in respect of each such Note, the
         Transferor does hereby certify that the Transferor is familiar with the
         Indenture relative to the above captioned Notes and that the transfer
         of this Note does not require registration under the Securities Act (as
         defined below) because:*

-        Such Note is being acquired for the Transferor's own account without
         transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
         2.6(d)(i)(A) of the Indenture).

-        Such Note is being transferred (i) to a "qualified institutional buyer"
         (as defined in Rule 144A under the Securities Act of 1933, as amended
         (the "Securities Act")), in reliance on Rule 144A or (ii) pursuant to
         an exemption from registration in accordance with Rule 904 under the
         Securities Act (and in the case of clause (ii), based on an opinion of
         counsel if the Issuers so request and together with a certification in
         substantially the form of Exhibit D to the Indenture).

-        Such Note is being transferred (i) in accordance with Rule 144 under
         the Securities Act (and based on an opinion of counsel if the Issuers
         so request) or (ii) pursuant to an effective registration statement
         under the Securities Act.

-        Such Note is being transferred to an institutional accredited investor
         within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
         Securities Act pursuant to a private placement exemption from the
         registration requirements of the Securities Act (and based on an
         opinion of counsel if the Issuers so request) together with a
         certification in substantially the form of Exhibit C to the Indenture.

-        Such Note is being transferred in reliance on and in compliance with
         another exemption from the registration requirements of the Securities
         Act (and based on an opinion of counsel if the Issuers so request).

----------
* Check applicable box.

                                   Exhibit B-1
<PAGE>
                           -----------------------------------------------------
                           [INSERT NAME OF TRANSFEROR]

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

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

                                   Exhibit B-2
<PAGE>
                                                                       EXHIBIT C

         FORM OF CERTIFICATE TO BE DELIVERED BY ACCREDITED INSTITUTIONS

                                                        _____________ ___, _____

_______________________________, as Registrar
Attention:  Corporate Trust Department

Ladies and Gentlemen:

         We are delivering this letter in connection with an offering of 8-7/8%
Senior Notes due 2011 (the "Notes") of AmeriGas Partners, L.P., a Delaware
limited partnership (the "Partnership"), and AP Eagle Finance Corp., a Delaware
corporation (together with the Partnership, the "Issuers"), all as described in
the Offering Memorandum relating to the Offering.

         We hereby confirm that:

         we are an "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act (an "Institutional Accredited
Investor"), or an entity in which all of the equity owners are Institutional
Accredited Investors;

                  (i) any purchase of Notes will be for our own account or for
         the account of one or more other Institutional Accredited Investors as
         to which we exercise sole investment discretion;

                  (ii) in the event that we purchase any Notes, we will acquire
         such securities having a minimum purchase price of at least $100,000
         for our own account and for each separate account for which we are
         acting;

                  (iii) we have such knowledge and experience in financial and
         business matters that we are capable of evaluating the merits and risks
         of purchasing Notes and we and any accounts for which we are acting are
         able to bear the economic risks of our or their investment;

                  (iv) we are not acquiring Notes with a view to any
         distribution thereof in a transaction that would violate the Securities
         Act or the securities laws of any State of the United States or any
         other applicable jurisdiction; provided that the disposition of our
         property and the property of any accounts for which we are acting as
         fiduciary shall remain at all times within our control; and

                  (v) we acknowledge that we have had access to such financial
         and other information, and have been afforded the opportunity to ask
         such questions of representatives of the Issuers and receive answers
         thereto, as we deem necessary in connection with out decision to
         purchase Notes.

         We understand that the Notes have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Notes, that such Notes may be offered, resold, pledged
or otherwise transferred only (i) to a person whom we reasonably believe to be a
qualified institutional buyer (as defined in Rule 144A under the Securities Act)
in a transaction meeting the requirements of Rule 144A, in a transaction meeting
the requirements of Rule 144 under the Securities Act, outside the United States
to a foreign person in a transaction meeting the requirements of Rule 904 under

                                   Exhibit C-1
<PAGE>
the Securities Act or in accordance with another exemption from the registration
requirements of the Securities Act (and, unless such transfer occurs in a
transaction meeting the requirements of Rule 144A, based upon an opinion of
counsel if the Issuers so request), (ii) to the Issuers or (iii) pursuant to an
effective registration statement, and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. We understand that the Registrar will not be required
to accept for registration of transfer any Notes, except upon presentation of
evidence satisfactory to the Partnership that the foregoing restrictions on
transfer have been complied with. We further understand that the Notes purchased
by us will be in the form of definitive physical certificates and that such
certificates will bear a legend reflecting the substance of this paragraph. We
further agree to provide to any person acquiring any of the Notes from us a
notice advising such person that resales of the Notes are restricted as stated
herein.

         We acknowledge that Credit Suisse First Boston Corporation, Salomon
Smith Barney Inc., the Issuers and others will rely upon our confirmations,
acknowledgements and agreements set forth herein, and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases to
be accurate and complete.

                                   Exhibit C-2
<PAGE>
         THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.

                                     Very truly yours,

                                     -------------------------------------------
                                     [Name]

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

                                   Exhibit C-3
<PAGE>
                                                                       EXHIBIT D

                FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
                     WITH TRANSFERS PURSUANT TO REGULATION S

                                                               __________, _____

_______________________________, as Registrar
Attention:  Corporate Trust Department

Ladies and Gentlemen:

         In connection with our proposed sale of certain 8-7/8% Series A Senior
Notes due 2011 (the "Notes") of AmeriGas Partners, L.P., a Delaware limited
partnership (the "Partnership"), and AP Eagle Finance Corp., a Delaware
corporation (together with the Partnership, the "Issuers"), we represent that:

1.       the offer of the Notes was not made to a person in the United States;

2.       at the time the buy order was originated, the transferee was outside
         the United States or we and any person acting on our behalf reasonably
         believed that the transferee was outside the United States;

3.       no directed selling efforts have been made by us in the United States
         in contravention of the requirements of Rule 903(b) or Rule 904(b) of
         Regulation S, as applicable; and

4.       the transaction is not part of a plan or scheme to evade the
         registration requirements of the U.S. Securities Act of 1933.

         You and the Issuers are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.

                                     Very truly yours,

                                     -------------------------------------------
                                      [Name of Transferor]

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

                                   Exhibit D-1

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