
<PAGE>
 
==============================================================================


                                THE KROGER CO.

                                      TO

                              . . . . . . . . . .
                                    Trustee



                                  ----------


                                   INDENTURE

                          Dated as of . . . . . . . .


                                  ----------



                         SUBORDINATED DEBT SECURITIES



==============================================================================
<PAGE>
 
                                THE KROGER CO.
                Certain Sections of this Indenture relating to
                  Sections 310 through 318, inclusive, of the
                         Trust Indenture Act of 1939:

Trust Indenture
  Act Section                                                Indenture Section

<TABLE>
<CAPTION>

<S>                                                         <C>
(S) 310(a)(1)    .............................................  609
       (a)(2)    .............................................  609
       (a)(3)    .............................................  Not Applicable
       (a)(4)    .............................................  Not Applicable
       (b)       .............................................  608
                                                                610
(S) 311(a)       .............................................  613
       (b)       .............................................  613
(S) 312(a)       .............................................  701
                                                                702(a)
       (b)       .............................................  702(b)
       (c)       .............................................  702(c)
(S) 313(a)       .............................................  703(a)
       (b)       .............................................  703(a)
       (c)       .............................................  703(a)
       (d)       .............................................  703(b)
(S) 314(a)       .............................................  704
       (a)(4)    .............................................  101
                                                                1004
       (b)       .............................................  Not Applicable
       (c)(1)    .............................................  102
       (c)(2)    .............................................  102
       (c)(3)    .............................................  Not Applicable
       (d)       .............................................  Not Applicable
       (e)       .............................................  102
(S) 315(a)       .............................................  601
       (b)       .............................................  602
       (c)       .............................................  601
       (d)       .............................................  601
       (e)       .............................................  514
(S) 316(a)       .............................................  101
       (a)(1)(A) .............................................  502
                                                                512
       (a)(1)(B) .............................................  513
       (a)(2)    .............................................  Not Applicable
       (b)       .............................................  508
       (c)       .............................................  104(c)
(S) 317(a)(1)    .............................................  503
       (a)(2)    .............................................. 504
</TABLE>

<PAGE>
 
<TABLE>

<S>                                                            <C>
       (b)       .............................................  1003
(S) 318(a)       .............................................  107
</TABLE>
___________________

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

<PAGE>

                               TABLE OF CONTENTS
                                  __________
<TABLE>
<CAPTION>

                                                                          Page
                                                                          ----
<S>                                                                      <C>
PARTIES...................................................................  1
RECITALS OF THE COMPANY...................................................  1
</TABLE> 

                                  ARTICLE ONE
                                  -----------

            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

                                                                          Page
                                                                          ----
<TABLE>
<CAPTION>
<S>          <C>                                                          <C>
Section 101.     Definitions:.............................................  1
                 Act......................................................  2
                 Administrative Agents....................................  2
                 Affiliate; control.......................................  2
                 Authenticating Agent.....................................  3
                 Bank Agreement...........................................  3
                 Board of Directors.......................................  3
                 Board Resolution.........................................  3
                 Business Day.............................................  3
                 Capital Stock............................................  4
                 Commission...............................................  4
                 Company..................................................  4
                 Company Request; Company Order...........................  4
                 Corporate Trust Office...................................  4
                 corporation..............................................  4
                 Defaulted Interest.......................................  4
                 Depositary...............................................  4
                 Event of Default.........................................  5
                 Exchange Act.............................................  5
                 Global Security..........................................  5
                 Holder...................................................  5
                 Indebtedness.............................................  5
                 Indenture................................................  6
                 interest.................................................  6
                 Interest Payment Date....................................  6
                 Lien.....................................................  6
                 Maturity.................................................  6
                 Officers' Certificate....................................  7
                 Opinion of Counsel.......................................  7
                 Original Issue Discount Security.........................  7
</TABLE>

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NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

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

                                                                          Page
                                                                          ----
<S>            <C>                                                       <C>
                 Outstanding..............................................  7
                 Paying Agent.............................................  9
                 Person...................................................  9
                 Place of Payment.........................................  9
                 Predecessor Security.....................................  9
                 Redemption Date..........................................  9
                 Redemption Price.........................................  9
                 Regular Record Date......................................  9
                 Securities............................................... 10
                 Security Register; Security
                  Registrar............................................... 10
                 Senior Indebtedness...................................... 10
                 Special Record Date...................................... 10
                 Stated Maturity.......................................... 10
                 Subsidiary............................................... 10
                 Trustee.................................................. 10
                 Trust Indenture Act...................................... 10
                 Vice President........................................... 11
                 Wholly-owned Subsidiary.................................. 11
Section 102.     Compliance Certificates and Opinions..................... 11
Section 103.     Form of Documents Delivered to Trustee................... 12
Section 104.     Acts of Holders; Record Dates............................ 13
Section 105.     Notices, Etc., to Trustee and Company.................... 15
Section 106.     Notice to Holders; Waiver................................ 15
Section 107.     Conflict with Trust Indenture Act........................ 16
Section 108.     Effect of Headings and
                  Table of Contents....................................... 16
Section 109.     Successors and Assigns................................... 17
Section 110.     Separability Clause...................................... 17
Section 111.     Benefits of Indenture.................................... 17
Section 112.     Governing Law............................................ 17
Section 113.     Legal Holidays........................................... 17
</TABLE>

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NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

<PAGE>

                                     -iii-
<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
                                  ARTICLE TWO
                                  -----------

                                 SECURITY FORMS
<S>            <C>                                                       <C>
Section 201.    Forms Generally........................................... 18
Section 202.    Form of Face of Security.................................. 18
Section 203.    Form of Reverse of Security............................... 21
Section 204.    Form of Legend for Global Securities...................... 27
Section 205.    Form of Trustee's Certificate of
                 Authentication........................................... 28


                                 ARTICLE THREE
                                 -------------

                                THE SECURITIES

Section 301.     Amount Unlimited; Issuable in Series..................... 28
Section 302.     Denominations............................................ 33
Section 303.     Execution, Authentication, Delivery
                  and Dating.............................................. 33
Section 304.     Temporary Securities..................................... 35
Section 305.     Registration, Registration of Transfer
                  and Exchange............................................ 36
Section 306.     Mutilated, Destroyed, Lost and Stolen
                  Securities.............................................. 38
Section 307.     Payment of Interest; Interest Rights
                  Preserved............................................... 40
Section 308.     Persons Deemed Owners.................................... 42
Section 309.     Cancellation............................................. 42
Section 310.     Computation of Interest.................................. 43


                                 ARTICLE FOUR
                                 ------------
</TABLE>

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NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

<PAGE>

                                     -iv-

<TABLE>
<CAPTION>
 
                                                                          Page
                                                                          ----

                          SATISFACTION AND DISCHARGE

<S>             <C>                                                      <C>
Section 401.     Satisfaction and Discharge of Indenture.................. 43
Section 402.     Application of Trust Money............................... 45


                                 ARTICLE FIVE
                                 ------------

                                   REMEDIES

Section 501.     Events of Default........................................ 45
Section 502.     Acceleration of Maturity; Rescission
                  and Annulment........................................... 48
Section 503.     Collection of Indebtedness and Suits
                  for Enforcement by Trustee.............................. 50
Section 504.     Trustee May File Proofs of Claim......................... 51
Section 505.     Trustee May Enforce Claims Without
                  Possession of Securities................................ 51
Section 506.     Application of Money Collected........................... 52
Section 507.     Limitation on Suits...................................... 52
Section 508.     Unconditional Right of Holders to
                  Receive Principal, Premium and
                  Interest................................................ 54
Section 509.     Restoration of Rights and Remedies....................... 54
Section 510.     Rights and Remedies Cumulative........................... 54
Section 511.     Delay or Omission Not Waiver............................. 55
Section 512.     Control by Holders....................................... 55
Section 513.     Waiver of Past Defaults.................................. 55
Section 514.     Undertaking for Costs.................................... 56
Section 515.     Waiver of Usury, Stay or
                  Extension Laws.......................................... 56
</TABLE>

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NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

<PAGE>

                                      -v-
<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
                                  ARTICLE SIX
                                  -----------

                                  THE TRUSTEE
<S>            <C>                                                       <C>
Section 601.     Certain Duties and Responsibilities...................... 57
Section 602.     Notice of Defaults....................................... 57
Section 603.     Certain Rights of Trustee................................ 57
Section 604.     Not Responsible for Recitals or
                  Issuance of Securities.................................. 59
Section 605.     May Hold Securities...................................... 60
Section 606.     Money Held in Trust...................................... 60
Section 607.     Compensation and Reimbursement........................... 60
Section 608.     Disqualification; Conflicting
                  Interests............................................... 61
Section 609.     Corporate Trustee Required;
                  Eligibility............................................. 61
Section 610.     Resignation and Removal; Appointment of
                  Successor............................................... 62
Section 611.     Acceptance of Appointment by Successor................... 64
Section 612.     Merger, Conversion, Consolidation or
                  Succession to Business.................................. 66
Section 613.     Preferential Collection of Claims
                  Against Company......................................... 66
Section 614.     Appointment of Authenticating Agent...................... 66

                                 ARTICLE SEVEN
                                 -------------

               HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701.     Company to Furnish Trustee Names and
                  Addresses of Holders.................................... 69
Section 702.     Preservation of Information;
                  Communications to Holders............................... 70
 </TABLE>

- -------------
NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

<PAGE>

                                     -vi-
 
<TABLE>
<CAPTION> 
                                                                          Page
                                                                          ----

<S>             <C>                                                      <C>
Section 703.     Reports by Trustee....................................... 70
Section 704.     Reports by Company....................................... 71


                                 ARTICLE EIGHT
                                 -------------

             CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801.     Company and Subsidiaries May Consolidate,
                  Etc., Only on Certain Terms............................. 71
Section 802.     Successor Substituted.................................... 71


                                 ARTICLE NINE
                                 ------------

                            SUPPLEMENTAL INDENTURES

Section 901.     Supplemental Indentures Without Consent
                  of Holders.............................................. 72
Section 902.     Supplemental Indentures with Consent of
                  Holders................................................. 74
Section 903.     Execution of Supplemental Indentures..................... 76
Section 904.     Effect of Supplemental Indentures........................ 76
Section 905.     Conformity with Trust Indenture Act...................... 76
Section 906.     Reference in Securities to Supplemental
                  Indentures.............................................. 77


                                  ARTICLE TEN
                                  -----------

                                   COVENANTS

Section 1001.    Payment of Principal, Premium and
                  Interest................................................ 77
Section 1002.    Maintenance of Office or Agency.......................... 77
</TABLE>

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       of the Indenture.


<PAGE>

                                     -vii-
<TABLE>
<CAPTION> 
                                                                          Page
                                                                          ----
<S>             <C>                                                      <C>
Section 1003.    Money for Securities Payments to Be
                  Held in Trust........................................... 78
Section 1004.    Statement by Officers as to Default...................... 80
Section 1005.    Existence................................................ 80
Section 1006.    Maintenance of Properties................................ 80
Section 1007.    Payment of Taxes and Other Claims........................ 81
Section 1008.    Waiver of Certain Covenants.............................. 81


                                 ARTICLE ELEVEN
                                 --------------

                            REDEMPTION OF SECURITIES

Section 1101.    Applicability of Article................................. 82
Section 1102.    Election to Redeem; Notice to Trustee.................... 82
Section 1103.    Selection by Trustee of Securities to
                  Be Redeemed............................................. 82
Section 1104.    Notice of Redemption..................................... 83
Section 1105.    Deposit of Redemption Price.............................. 84
Section 1106.    Securities Payable on Redemption Date.................... 84
Section 1107.    Securities Redeemed in Part.............................. 85
</TABLE>

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NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

<PAGE>
 
                                    -viii-
<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
                                 ARTICLE TWELVE
                                 --------------

                                 SINKING FUNDS
 
<S>              <C>                                                     <C>
Section 1201.    Applicability of Article................................. 85
Section 1202.    Satisfaction of Sinking Fund Payments
                  with Securities......................................... 86
Section 1203.    Redemption of Securities for Sinking
                  Fund.................................................... 86

                                ARTICLE THIRTEEN
                                ----------------

                                 SUBORDINATION

Section 1301.    Securities Subordinate to Senior
                  Indebtedness............................................ 87
TESTIMONIUM............................................................... 89
SIGNATURES AND SEALS...................................................... 89
ACKNOWLEDGMENTS........................................................... 90
</TABLE>


- -------------
NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.


<PAGE>
 
          INDENTURE, dated as of . . . . . . . ., between The Kroger Co., a
corporation duly organized and existing under the laws of the State of Ohio
(herein called the "Company"), having its principal office at 1014 Vine Street,
Cincinnati, Ohio 45202, and . . . . . . . . . . . . . . . , a banking
corporation duly organized and existing under the laws of . . . . . . . . . . .
 . . ., as Trustee (herein called the "Trustee").


                            RECITALS OF THE COMPANY

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

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

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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


                                  ARTICLE ONE

                       Definitions and Other Provisions
                            of General Application

Section 101.  Definitions.
              ----------- 

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

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

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

          (3)  all accounting terms not otherwise defined herein have the
     meanings assigned to them in accordance with generally accepted accounting
     principles, and, except as otherwise herein expressly provided, the term
     "generally accepted accounting principles" with respect to any computation
     required or permitted hereunder shall mean such accounting principles as
     are generally accepted and applied by the Company on January 1, 1993; and

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

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

          "Administrative Agents" means Chemical Bank and Citibank, N.A., as
Administrative Agents under the Bank Agreement, and, upon notice to the Company
and the Trustee, any successors thereto under the Bank Agreement.

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

                                      -2-
<PAGE>
 
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

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

          "Bank Agreement" means the Senior Competitive Advance and Revolving
Credit Facility Agreement, dated as of July 19, 1994, among the Company, the
Subsidiary Borrowers named therein, the Lenders named therein, and the
Administrative Agents, as such Agreement (including, without limitation, any
"Loan Documents" (as defined in the Bank Agreement)) has been or may be amended,
amended and restated, supplemented or otherwise modified from time to time, and
includes any agreement extending the maturity of, refinancing or otherwise
restructuring (including, but not limited to, the inclusion of additional
borrowers thereunder that are Subsidiaries of the Company) all or any portion of
the Obligations under such Agreement or any successor agreement.

          "Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.

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

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

          "Capital Stock" means any and all shares, interests, participations,
warrants, rights or other equivalents (however designated) of corporate stock.

                                      -3-
<PAGE>
 
          "Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

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

          "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.

          "Corporate Trust Office" means the principal office of the Trustee in
 . . . . . . . . . . . . . . . ., at which at any particular time its corporate
trust business shall be administered, which on the date of this Indenture
is . .. . . . . . . . . . . . . . . . . . . . . . . . . ,
Attention . . . . . . . . .. . . . . . .

          "corporation" means a corporation, association, company, joint-stock
company or business trust.

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

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

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

                                      -4-
<PAGE>
 
          "Exchange Act" means the Securities Exchange Act of 1934 as it may be
amended and any successor act thereto.
        
          "Global Security" means a Security bearing the legend specified in
Section 204 evidencing all or part of a series of Securities, authenticated and
delivered to the Depositary for such series or its nominee, and registered in
the name of such Depositary or nominee.

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

          "Indebtedness" means (without duplication), with respect to any
Person, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) every obligation of such Person issued or assumed as the
deferred purchase price of property, every conditional sale obligation and every
obligation under any title retention agreement, in each case if on terms
permitting any portion of the purchase price to be paid beyond one year from the
date of purchase (but excluding trade accounts payable arising in the ordinary
course of business which are not overdue by more than 90 days or which are being
contested in good faith), (iv) every obligation of such Person issued or
contracted for as payment in consideration of the purchase by such Person or an
Affiliate of such Person of the Capital Stock or substantially all of the assets
of another Person or a merger or consolidation to which such Person or an
Affiliate of such Person was a party, (v) every obligation of the type referred
to in clauses (i) through (iv) of other Persons and all dividends of other
Persons for the payment of which, in either case, such Person is responsible or
liable, directly or indirectly, as obligor, guarantor or otherwise, and (vi)
every obligation of the type referred to in clauses (i) through (v) of other
Persons secured by any Lien on any property or asset of such Person (whether or
not such obligation is assumed by such Person), the amount of such obligation
being deemed to be the lesser of the value of such property or assets or the
amount of the obligation so secured. "Indebtedness," however, does not include
any

                                      -5-
<PAGE>
 
obligation of any Person under any interest rate swap, cap, collar or similar
arrangement.

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

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

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

          "Lien" means, with respect to any property or asset, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such property or asset (including, without
limitation, any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).

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

                                      -6-
<PAGE>
 
          "Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company.

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

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

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

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

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

          (iii)  Securities which have been paid pursuant to Section 306 or in
     exchange for or

                                      -7-
<PAGE>
 
     in lieu of which other Securities have been authenticated and delivered
     pursuant to this Indenture, other than any such Securities in respect of
     which there shall have been presented to the Trustee proof satisfactory to
     it that such Securities are held by a bona fide purchaser in whose hands
     such Securities are valid obligations of the Company;

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

                                      -8-
<PAGE>
 
          "Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.

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

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

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

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

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

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

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

                                      -9-
<PAGE>
 

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

          "Senior Indebtedness" shall have the meaning determined pursuant to
Section 301(18).

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

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

          "Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.

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

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

                                     -10-
<PAGE>
 

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

          "Wholly-owned Subsidiary" means a Subsidiary, all of the outstanding
Capital Stock of which (other than directors' qualifying shares) shall at the
time be owned by the Company or by one or more Wholly-owned Subsidiaries or by
the Company and one or more Wholly-owned Subsidiaries.

Section 102.  Compliance Certificates and Opinions.
              ------------------------------------ 

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

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

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

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

          (3) a statement that, in the opinion of each such individual, he has
     made such examination or investigation as is necessary to enable him to
     express an informed opinion as

                                     -11-
<PAGE>
 

     to whether or not such covenant or condition has been complied with; and

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

Section 103.  Form of Documents Delivered to Trustee.
              -------------------------------------- 

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

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

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

                                     -12-
<PAGE>
 

Section 104.  Acts of Holders; Record Dates.
              ----------------------------- 

          (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.

          Without limiting the generality of the foregoing, a Holder, including
a Depositary that is a Holder of a Global Security, may make, give or take, by a
proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders, and a Depositary that is a
Holder of a Global Security may provide its proxy or proxies to the beneficial
owners of interests in any such Global Security.

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

                                     -13-
<PAGE>
 

proved in any other manner which the Trustee deems sufficient.

          (c) The Company may, in the circumstances permitted by the Trust
Indenture Act, and to the extent required by this Indenture shall, fix any day
as the record date for the purpose of determining the Holders of Securities of
any series entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action, or to vote on any action,
authorized or permitted to be given or taken by Holders of Securities of such
series; provided, however, that in no event may the Company set a record date
for the purpose of determining the Holders of the Securities entitled to give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action pursuant to Section 501, 502 (other than the second paragraph
thereof), 507 or 512. Except as otherwise pro vided herein, if not set by the
Company prior to the first solicitation of a Holder of Securities of such series
made by any Person in respect of any such action, or, in the case of any such
vote, prior to such vote, the record date for any such action or vote shall be
the 30th day (or, if later, the date of the most recent list of Holders required
to be provided pursuant to Section 701) prior to such first solicitation or
vote, as the case may be. With regard to any record date for action to be given
or taken or voted upon by the Holders of one or more series of Securities, only
the Holders of Securities of such series on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant action.

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

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

                                     -14-
<PAGE>
 

Section 105.  Notices, Etc., to Trustee and Company.
              ------------------------------------- 

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

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

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

Section 106.  Notice to Holders; Waiver.
              ------------------------- 

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

                                     -15-
<PAGE>
 

shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

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

Section 107.  Conflict with Trust Indenture Act.
              --------------------------------- 

          If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act 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.

Section 108.  Effect of Headings and Table of Contents.
              ---------------------------------------- 

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

Section 109.  Successors and Assigns.
              ---------------------- 

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

Section 110.  Separability Clause.
              ------------------- 

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

                                     -16-
<PAGE>
 

Section 111.  Benefits of Indenture.
              --------------------- 

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

Section 112.  Governing Law.
              ------------- 

          This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.

Section 113.  Legal Holidays.
              -------------- 

          In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.

                                  ARTICLE TWO

                                Security Forms

Section 201.  Forms Generally.
              --------------- 

          The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board

                                     -17-
<PAGE>
 

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

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

Section 202.  Form of Face of Security.
              ------------------------ 

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

                                THE KROGER CO.

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

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

          The Kroger Co., a corporation duly organized and existing under the
laws of the State of Ohio (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to
 ..............................................., or registered assigns, the
principal sum of .................. ................... Dollars on
 ............................ ........................... [if the Security is to
bear

                                     -18-
<PAGE>
 

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

          [If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ....% per annum, which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for.  Interest on any overdue principal shall be payable on
demand.  Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of ......% per annum, which shall accrue
from the date 

                                     -19-
<PAGE>
 

of such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]

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

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

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

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

Dated:


                                         THE KROGER CO.
                                    
                                    
                                         By.....................

Attest:

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

                                     -20-
<PAGE>
 

Section 203.  Form of Reverse of Security.
              --------------------------- 

          This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of _______________ (herein called the
"Indenture"), between the Company and ..................., as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee, the holders of
Senior Indebtedness and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof[, limited in
aggregate principal amount to $...........].

          [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ........... in any year commencing with the year ...... and ending with
the year ...... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [on
or after .........., 19..], as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before ..............., __%, and if
redeemed] during the 12-month period beginning ............. of the years
indicated,

                                     -21-
<PAGE>
 

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





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

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

                                     -22-
<PAGE>
 

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



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

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

          [The sinking fund for this series provides for the redemption on
 ............ in each year beginning with the year ....... and ending with the
year ...... of [not less than $.......... ("mandatory sinking fund") and not
more
    
                                     -23-
<PAGE>
 

than] $......... aggregate principal amount of Securities of this series.
Securities of this series acquired or redeemed by the Company otherwise than
through [mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made [in the inverse
order in which they become due].]

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

          The indebtedness evidenced by this Security is[, to the extent
provided in the Indenture,] subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.

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

          [If the Security is an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest, all of the
Company's obligations in respect of the

                                     -24-
<PAGE>
 
payment of the principal of and interest, if any, on the Securities of this
series shall terminate.]

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

          As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default, the Holders of not less than 25% in principal amount of the Outstanding
Securities shall have made written request, and offered reasonable indemnity, to
the Trustee to institute such proceeding as trustee, and the Trustee shall not
have received from the Holders of a majority in principal amount of the
Outstanding Securities a direction inconsistent with such request and shall have
failed to institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of (and premium, if any) or any interest
on this Security on or after the respective due dates expressed herein.

                                     -25-
<PAGE>
 

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

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

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

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

          Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue,

                                     -26-
<PAGE>
 

and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.

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


Section 204.  Form of Legend for Global Securities.
              ------------------------------------ 

          Any Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:

          "This Security is a Global Security within the meaning of the
     Indenture hereinafter referred to and is registered in the name of a
     Depositary or a nominee of a Depositary. This Security is not exchangeable
     for Securities registered in the name of a Person other than the Depositary
     or its nominee except in the limited circumstances described in the
     Indenture, and no transfer of this Security (other than a transfer of this
     Security as a whole by the Depositary to a nominee of the Depositary or by
     a nominee of the Depositary to the Depositary or another nominee of the
     Depositary) may be registered except in the limited circumstances described
     in the Indenture."

                                     -27-
<PAGE>
 

Section 205.  Form of Trustee's Certificate of Authentication.
              ------------------------------------------------

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

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


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


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


                                 ARTICLE THREE

                                The Securities

Section 301.  Amount Unlimited; Issuable in Series.
              ------------------------------------ 

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

          The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

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

          (2) any limit upon the aggregate principal amount of the Securities of
     the series which may be authenticated and delivered

                                     -28-
<PAGE>
 

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

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

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

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

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

          (7) the period or periods within which, the price or prices at which
     and the terms and conditions upon which Securities of the series may be
     redeemed, in whole or in part, at the option of the Company;

          (8) the obligation, if any, of the Company to redeem or purchase
     Securities of the series pursuant to any sinking fund or

                                     -29-
<PAGE>
 

     analogous provisions or at the option of a Holder thereof and the period or
     periods within which, the price or prices at which and the terms and
     conditions upon which Securities of the series shall be redeemed or
     purchased, in whole or in part, pursuant to such obligation;

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

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

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

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

                                     -30-
<PAGE>
 

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

          (14) whether the Securities of the series shall be issued in whole or
     in part in the form of one or more Global Securities and, in such case, the
     Depositary or Depositaries with respect to such Global Security or
     Securities and the circumstances under which any such Global Security may
     be registered for transfer or exchange, or authenticated and delivered, in
     the name of a Person other than such Depositary or its nominee, if other
     than as set forth in Section 305;

          (15) any other event or events of default applicable with respect to
     the Securities of the series in addition to those provided in Section
     501(1) through (7);

          (16) any other covenant or warranty included for the benefit of
     Securities of the series in addition to (and not inconsistent with) those
     included in this Indenture for the benefit of Securities of all series, or
     any other covenant or warranty included for the benefit of Securities of
     the series in lieu of any covenant or warranty included in this Indenture
     for the benefit of Securities of all series, or any provision that any
     covenant or warranty included in this Indenture for the benefit of
     Securities of all series shall not be for the benefit of Securities of all
     series shall not be for the benefit of Securities of such series, or any
     combination of such covenants, warranties or provisions;

                                     -31-
<PAGE>
 

          (17) the terms pursuant to which (i) the Company may consolidate with
     or merge into any other Person, (ii) any Subsidiary of the Company may
     consolidate with or merge into another Person in a transaction in which
     such Subsidiary remains a Subsidiary, (iii) any other Person may
     consolidate with or merge into any Subsidiary in which such Subsidiary
     remains a Subsidiary, or (iv) any other Person may, directly or indirectly,
     sell, assign, convey, transfer or lease its properties substantially as an
     entirety to the Company;

          (18) the terms pursuant to which the Securities will be made
     subordinate and subject in right of payment to the prior payment in full of
     all Senior Indebtedness of the Company, and the definition of any such
     Senior Indebtedness; and

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

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

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

                                     -32-
<PAGE>
 

Section 302.  Denominations.
              ------------- 

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

Section 303.  Execution, Authentication, Delivery and Dating.
              ----------------------------------------------

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

          Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

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

                                     -33-
<PAGE>
 

Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating,

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

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

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

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

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

                                     -34-
<PAGE>
 

tion of each Security of such series if such documents are delivered at or prior
to the authentication upon original issuance of the first Security of such
series to be issued.

          Each Security shall be dated the date of its authentication.

          No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.

Section 304.  Temporary Securities.
              -------------------- 

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

          If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the

                                     -35-
<PAGE>
 

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

Section 305.  Registration, Registration of Transfer and Exchange.
              ---------------------------------------------------

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

          Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.

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

                                     -36-
<PAGE>
 

and deliver, the Securities which the Holder making the exchange is entitled to
receive.

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

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

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

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

          Notwithstanding the foregoing, no Global Security shall be registered
for transfer or exchange, or authenticated and delivered, whether pursuant to
this Section, Section 304, 306, 906 or 1107 or otherwise, in the name of a
Person other than the Depositary for such Global Security or its nominee until
(i) the Depositary with

                                     -37-
<PAGE>
 

respect to a Global Security notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Security or the Depositary ceases to
be a clearing agency registered under the Exchange Act, (ii) the Company
executes and delivers to the Trustee a Company Order that such Global Security
shall be so transferable and exchangeable or (iii) there shall have occurred and
be continuing an Event of Default, or any event which after notice or lapse of
time, or both, would constitute an Event of Default, with respect to the
Securities of such series. Upon the occurrence in respect of any Global Security
of any series of any one or more of the conditions specified in clauses (i),
(ii) or (iii) of the preceding sentence or such other conditions as may be
specified as contemplated by Section 301 for such series, such Global Security
may be registered for transfer or exchange for Securities registered in the
names of, or authenticated and delivered to, such Persons as the Depositary with
respect to such series shall direct.

          Except as provided in the preceding paragraph, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any Global Security, whether pursuant to this Section,
Section 304, 306, 906 or 1107 or otherwise, shall also be a Global Security and
bear the legend specified in Section 204.

Section 306.  Mutilated, Destroyed, Lost and Stolen Securities.
              ------------------------------------------------

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

          If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the

                                     -38-
<PAGE>
 

Company shall execute and the Trustee shall authenticate and deliver, in lieu of
any such destroyed, lost or stolen Security, a new Security of the same series
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

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

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

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

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

Section 307.  Payment of Interest; Interest Rights Preserved.
              ----------------------------------------------

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

                                     -39-
<PAGE>
 

close of business on the Regular Record Date for such interest.

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

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

                                     -40-
<PAGE>
 

     shall cause notice of the proposed payment of such Defaulted Interest and
     the Special Record Date therefor to be mailed, first-class postage prepaid,
     to each Holder of Securities of such series at his address as it appears in
     the Security Register, not less than 10 days prior to such Special Record
     Date. Notice of the proposed payment of such Defaulted Interest and the
     Special Record Date therefor having been so mailed, such Defaulted Interest
     shall be paid to the Persons in whose names the Securities of such series
     (or their respective Predecessor Securities) are registered at the close of
     business on such Special Record Date and shall no longer be payable
     pursuant to the following Clause (2).

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

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

Section 308.  Persons Deemed Owners.
              --------------------- 

          Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such Secu-

                                     -41-
<PAGE>
 

rity for the purpose of receiving payment of principal of and any premium and
(subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

Section 309.  Cancellation.
              ------------ 

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

Section 310.  Computation of Interest.
              ----------------------- 

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

                                     -42-
<PAGE>
 

                                 ARTICLE FOUR

                          Satisfaction and Discharge

Section 401.  Satisfaction and Discharge of Indenture.
              ---------------------------------------

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

          (1) either

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

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

              (i)  have become due and payable, or

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

              (iii) are to be called for redemption within one year under
          arrangements satisfactory to the Trustee for the giving of notice of
          redemption by the

                                     -43-
<PAGE>
 

          Trustee in the name, and at the expense, of the Company,

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

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

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

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

Section 402.  Application of Trust Money.
              -------------------------- 

          Subject to provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any

                                     -44-
<PAGE>
 

Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money has been deposited with the
Trustee.

                                 ARTICLE FIVE

                                   Remedies

Section 501.  Events of Default.
              ----------------- 

          "Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of Article
Thirteen or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

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

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

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

          (4) default in the performance, or breach, of any covenant of the
     Company in this Indenture (other than a covenant a default in whose
     performance or whose breach is elsewhere in this Section specifically dealt
     with or which has expressly been included in this Indenture solely for the

                                     -45-
<PAGE>
 

     benefit of series of Securities other than that series), and continuance of
     such default or breach for a period of 60 days after there has been given,
     by registered or certified mail, to the Company by the Trustee or to the
     Company and the Trustee by the Holders of at least 25% in principal amount
     of the Outstanding Securities of that series a written notice specifying
     such default or breach and requiring it to be remedied and stating that
     such notice is a "Notice of Default" hereunder; or

          (5) a default under any Indebtedness by the Company (including a
     default with respect to Securities of any series other than that series) or
     under any bond, debenture, note, mortgage, indenture or instrument under
     which there may be issued or by which there may be secured or evidenced any
     Indebtedness by the Company (including this Indenture) with a principal
     amount then outstanding in excess of $30,000,000, whether such Indebtedness
     now exists or shall hereafter be created, which default shall constitute a
     failure to pay the principal of such Indebtedness at final maturity or
     shall have resulted in such Indebtedness becoming or being declared due and
     payable prior to the date on which it would otherwise have become due and
     payable, without such Indebtedness having been discharged, or such
     acceleration having been rescinded or annulled, within a period of 10 days
     after there shall have been given, by registered or certified mail, to the
     Company by the Trustee or to the Company and the Trustee by the Holders of
     at least 25% in principal amount of the Outstanding Securities of that
     Series a written notice specifying such default and requiring the Company
     to cause such Indebtedness to be discharged or cause such acceleration to
     be

                                     -46-
<PAGE>
 

     rescinded or annulled and stating that such notice is a "Notice of Default"
     hereunder; or

          (6) the entry by a court having jurisdiction in the premises of (A) a
     decree or order for relief in respect of the Company in an involuntary case
     or proceeding under any applicable Federal or State bankruptcy, insolvency,
     reorganization or other similar law or (B) a decree or order adjudging the
     Company a bankrupt or insolvent, or approving as properly filed a petition
     seeking reorganization, arrangement, adjustment or composition of or in
     respect of the Company under any applicable Federal or State law, or
     appointing a custodian, receiver, liquidator, assignee, trustee,
     sequestrator or other similar official of the Company or of any substantial
     part of its property, or ordering the winding up or liquidation of its
     affairs, and the continuance of any such decree or order for relief or any
     such other decree or order unstayed and in effect for a period of 90
     consecutive days; or

          (7) the commencement by the Company of a voluntary case or proceeding
     under any applicable Federal or State bankruptcy, insolvency,
     reorganization or other similar law or of any other case or proceeding to
     be adjudicated a bankrupt or insolvent, or the consent by it to the entry
     of a decree or order for relief in respect of the Company in an involuntary
     case or proceeding under any applicable Federal or State bankruptcy,
     insolvency, reorganization or other similar law or to the commencement of
     any bankruptcy or insolvency case or proceeding against it, or the filing
     by it of a petition or answer or consent seeking reorganization or relief
     under any applicable Federal or State law, or the consent by it to the
     filing of such petition or to the appointment of or taking

                                     -47-
<PAGE>
 

     possession by a custodian, receiver, liquidator, assignee, trustee,
     sequestrator or other similar official of the Company or of any substantial
     part of its property, or the making by it of a general assignment for the
     benefit of creditors, or the admission by it in writing of its inability to
     pay its debts generally as they become due, or the taking of corporate
     action by the Company in furtherance of any such action; or

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

Section 502.  Acceleration of Maturity; Rescission and Annulment.
              --------------------------------------------------

          If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company and the Co-Agents (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become due and payable five Business Days
after the receipt by the Company and the Co-Agents of such written notice,
provided such Event of Default is then continuing; provided, however, that the
preceding proviso shall not restrict the availability of other rights or
remedies that the Trustee or the Holders may have.

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

                                     -48-
<PAGE>
 

written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if

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

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

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

              (C) interest upon overdue interest at the rate or rates prescribed
          therefor in such Securities, and

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

and

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

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

                                     -49-
<PAGE>
 
Section 503.  Collection of Indebtedness and Suits
              for Enforcement by Trustee.
              ------------------------------------

     The Company covenants that if

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

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

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

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

Section 504.  Trustee May File Proofs of Claim.
              -------------------------------- 

     In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust

                                     -50-
<PAGE>
 
Indenture Act in order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.

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

Section 505.  Trustee May Enforce Claims Without
              Possession of Securities.
              ----------------------------------

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

                                     -51-
<PAGE>
 
Section 506.  Application of Money Collected.
              ------------------------------ 

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

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

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

Section 507.  Limitation on Suits.
              ------------------- 

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

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

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

                                     -52-
<PAGE>
 
     (3)  such Holder or Holders have offered to the Trustee reasonable
  indemnity against the costs, expenses and liabilities to be incurred in
  compliance with such request;

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

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

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

Section 508.  Unconditional Right of Holders to
              Receive Principal, Premium and Interest.
              --------------------------------------- 

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

                                     -53-
<PAGE>
 
Section 509.  Restoration of Rights and Remedies.
              ---------------------------------- 

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

Section 510.  Rights and Remedies Cumulative.
              ------------------------------ 

     Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

Section 511.  Delay or Omission Not Waiver.
              ---------------------------- 

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

                                     -54-
<PAGE>
 
Section 512.  Control by Holders.
              ------------------ 

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

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

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

Section 513.  Waiver of Past Defaults.
              ----------------------- 

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

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

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

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

                                     -55-
<PAGE>
 
Section 514.  Undertaking for Costs.
              --------------------- 

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

Section 515.  Waiver of Usury, Stay or Extension Laws.
              --------------------------------------- 

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


                                  ARTICLE SIX

                                  The Trustee

Section 601.  Certain Duties and Responsibilities.
              ----------------------------------- 

     The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds

                                     -56-
<PAGE>
 
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

Section 602.  Notice of Defaults.
              ------------------ 

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

Section 603.  Certain Rights of Trustee.
              ------------------------- 

     Subject to the provisions of Section 601:

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

     (b)  any request or direction of the Company mentioned herein shall be
  sufficiently evidenced by a Company Request or Company Order and any
  resolution of the

                                     -57-
<PAGE>
 
  Board of Directors may be sufficiently evidenced by a Board Resolution;

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

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

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

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

                                     -58-
<PAGE>
 
  such further inquiry or investigation, it shall be entitled to examine the
  books, records and premises of the Company, personally or by agent or
  attorney; and

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

Section 604.  Not Responsible for Recitals or
              Issuance of Securities.
              -------------------------------

     The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.

Section 605.  May Hold Securities.
              ------------------- 

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

Section 606.  Money Held in Trust.
              ------------------- 

     Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent
                                
                                     -59-
<PAGE>
 
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.

Section 607.  Compensation and Reimbursement.
              ------------------------------ 

     The Company agrees

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

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

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

Section 608.  Disqualification; Conflicting
              Interests.
              -----------------------------

     If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the

                                     -60-
<PAGE>
 
Trustee shall either eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust Indenture Act
and this Indenture.

Section 609.  Corporate Trustee Required;
              Eligibility.
              ---------------------------

     There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and having its Corporate
Trust Office in the City of Chicago, State of Illinois, in the Borough of
Manhattan, The City of New York or in the City of Cincinnati, State of Ohio. If
such Person publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.

Section 610.  Resignation and Removal;
              Appointment of Successor.
              ------------------------ 

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

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

                                     -61-
<PAGE>
 
     (c)  The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.

     (d)  If at any time:

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

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

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

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

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

                                     -62-
<PAGE>
 
series (it being understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any Series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any Series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.

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

Section 611.  Acceptance of Appointment by
              Successor.
              ----------------------------

     (a)  In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the

                                     -63-
<PAGE>
 
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.

     (b)  In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any

                                     -64-
<PAGE>
 
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates; but, on request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates.

     (c)  Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) and (b) of this Section, as the case may be.

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

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

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

                                     -65-
<PAGE>
 
Section 613.  Preferential Collection of Claims
              Against Company.
              ---------------------------------

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

Section 614.  Appointment of Authenticating Agent.
              ----------------------------------- 

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

                                     -66-
<PAGE>
 
resign immediately in the manner and with the effect specified in this Section.

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

     An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

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

                                     -67-
<PAGE>
 
     If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:

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


                                    ------------------------,
                                                   As Trustee



                                    By
                                      ----------------------,
                                      As Authenticating Agent



                                    By
                                      ----------------------
                                          Authorized Officer


                                 ARTICLE SEVEN

               Holders' Lists and Reports by Trustee and Company

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

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

     (a)  semi-annually, either (i) not later than _________________ and
  ____________________ in each year in the case of Original Issue Discount
  Securities of any series which by their terms bear interest only after
  Maturity, or (ii) not more than 15 days after each Regular Record Date in the
  case of Securities of any other series, a list of each series of Securities,
  in such form as the

                                     -68-
<PAGE>
 
  Trustee may reasonably require, of the names and addresses of the Holders of
  each such series as of the preceding _____________ or _______________ or
  Regular Record Date, as the case may be, and

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

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

Section 702.  Preservation of Information;
              Communications to Holders.
              ----------------------------

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

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

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

                                     -69-
<PAGE>
 

Section 703.  Reports by Trustee.
              ------------------ 

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

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

Section 704.  Reports by Company.
              ------------------ 

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

                                     -70-
<PAGE>
 

                                 ARTICLE EIGHT

             Consolidation, Merger, Conveyance, Transfer or Lease

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

          The Company (a) shall not consolidate with or merge into any other
Person or, directly or indirectly, transfer, convey, sell, lease or otherwise
dispose of all or substantially all of its properties and assets as an entirety
to any Person; (b) shall not permit any Subsidiary to consolidate with or merge
into another Person (other than a Wholly-owned Subsidiary) in a transaction in
which such Subsidiary remains a Subsidiary; (c) shall not permit (i) any other
Person to consolidate with or merge into the Company or (ii) any other Person
(other than a Wholly-owned Subsidiary) to consolidate with or merge into any
Subsidiary in a transaction in which such Subsidiary remains a Subsidiary; and
(d) shall not permit any other Person to, directly or indirectly, sell, assign,
convey, transfer or lease its properties substantially as an entirety to the
Company except as provided pursuant to Section 301(17).

Section 802.  Successor Substituted.
              --------------------- 

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

                                     -71-
<PAGE>
 

                                 ARTICLE NINE

                            Supplemental Indentures

Section 901.  Supplemental Indentures Without
              Consent of Holders.
              -------------------------------

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

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

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

          (3) to add any additional Events of Default; or

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

          (5) to add to, change or eliminate any of the provisions of this
     Indenture in

                                     -72-
<PAGE>
 

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

          (6) to secure the Securities; or

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

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

          (9) to cure any ambiguity, to correct or supplement any provision
     herein which may be inconsistent with any other provision herein, or to
     make any other provisions with respect to matters or questions arising
     under this Indenture, provided that such action pursuant to this clause (9)
     shall not adversely affect the interests of the Holders of Securities of
     any series in any material respect.

Section 902.  Supplemental Indentures with Consent of Holders.
              -----------------------------------------------

          With the consent of the Holders of not less than 50% in principal
amount of the Outstanding Securities of

                                     -73-
<PAGE>
 

each series affected by such supplemental indenture, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected
thereby,
          (1) change the Stated Maturity of the principal of, or any instalment
     of principal of or interest on, any Security, or reduce the principal
     amount thereof or (unless otherwise specified as contemplated by Section
     301) the rate of interest thereon or any premium payable upon the
     redemption thereof, or reduce the amount of the principal of an Original
     Issue Discount Security that would be due and payable upon a declaration of
     acceleration of the Maturity thereof pursuant to Section 502, or change any
     Place of Payment where, or the coin or currency in which, any Security or
     any premium or interest thereon is payable, or impair the right to
     institute suit for the enforcement of any such payment on or after the
     Stated Maturity thereof (or, in the case of redemption, on or after the
     Redemption Date) or modify the provisions of this Indenture with respect to
     the subordination of the Securities of any series in a manner adverse to
     the Holders, or

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

                                     -74-
<PAGE>
 

     defaults hereunder and their consequences) provided for in this Indenture,
     or

          (3) modify any of the provisions of this Section, Section 513 or
     Section 1008, except to increase any such percentage or to provide that
     certain other provisions of this Indenture cannot be modified or waived
     without the consent of the Holder of each Outstanding Security affected
     thereby, provided, however, that this clause shall not be deemed to require
     the consent of any Holder with respect to changes in the references to "the
     Trustee" and concomitant changes in this Section and Section 1008, or the
     deletion of this proviso, in accordance with the requirements of Sections
     611(b) and 901(8).

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

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

Section 903.  Execution of Supplemental Indentures.
              ------------------------------------ 

          In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not

                                     -75-
<PAGE>
 

be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

Section 904.  Effect of Supplemental Indentures.
              --------------------------------- 

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

Section 905.  Conformity with Trust Indenture Act.
              ----------------------------------- 

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

Section 906.  Reference in Securities to Supplemental Indentures.
              --------------------------------------------------

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

                                     -76-
<PAGE>
 

                                  ARTICLE TEN

                                   Covenants

Section 1001.  Payment of Principal, Premium and Interest.
               ------------------------------------------ 

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

Section 1002.  Maintenance of Office or Agency.
               ------------------------------- 

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

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

                                     -77-
<PAGE>
 

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

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

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

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

          The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which

                                     -78-
<PAGE>
 

such sums were held by the Company or such Paying Agent; and, upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.

          Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

Section 1004.  Statement by Officers as to Default.
               ----------------------------------- 

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

                                      -79-
<PAGE>
 

Section 1005.  Existence.
               --------- 

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

Section 1006.  Maintenance of Properties.
               ------------------------- 

          The Company will cause all properties used or useful in the conduct of
its business or the business of any material Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary.

Section 1007.  Payment of Taxes and Other Claims.
               --------------------------------- 

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

                                     -80-
<PAGE>
 

faith by appropriate proceedings, if a reserve or other appropriate provision
shall have been made therefor in accordance with generally accepted accounting
principles.

Section 1008.  Waiver of Certain Covenants.
               --------------------------- 

          The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1006 to 1007, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.

                                ARTICLE ELEVEN

                           Redemption of Securities

Section 1101.  Applicability of Article.
               ------------------------ 

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

Section 1102.  Election to Redeem; Notice to Trustee.
               ------------------------------------- 

          The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 35 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date, of

                                     -81-
<PAGE>
 

the principal amount of Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.

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

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

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

          For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the

                                     -82-
<PAGE>
 

portion of the principal amount of such Securities which has been or is to be
redeemed.

Section 1104.  Notice of Redemption.
               -------------------- 

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

          All notices of redemption shall state:

          (1)  the Redemption Date,

          (2)  the Redemption Price,

          (3)  if less than all the Outstanding Securities of any series are to
     be redeemed, the identification (and, in the case of partial redemption of
     any Securities, the principal amounts) of the particular Securities to be
     redeemed,

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

          (5)  the place or places where such Securities are to be surrendered
     for payment of the Redemption Price, and

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

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

                                     -83-
<PAGE>
 

Section 1105.  Deposit of Redemption Price.
               --------------------------- 

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

Section 1106.  Securities Payable on Redemption Date.
               ------------------------------------- 

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

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

Section 1107.  Securities Redeemed in Part.
               --------------------------- 

          Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory

                                     -84-
<PAGE>
 

to the Company and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series and of like
tenor, of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.

                                ARTICLE TWELVE

                                 Sinking Funds

Section 1201.  Applicability of Article.
               ------------------------ 

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

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

Section 1202.  Satisfaction of Sinking Fund Payments with Securities.
               -----------------------------------------------------

          The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through

                                     -85-
<PAGE>
 

the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such series required to
be made pursuant to the terms of such Securities as provided for by the terms of
such series; provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.

Section 1203.  Redemption of Securities for Sinking Fund.
               ----------------------------------------- 

          Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 45 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.

                               ARTICLE THIRTEEN

                          Subordination of Securities

Section 1301.  Securities Subordinate to Senior Indebtedness.
               --------------------------------------------- 

                                     -86-
<PAGE>
 

          The Company covenants and agrees, and each Holder of a Security of any
series, by his acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner set forth pursuant to Section 301(18) hereof, the
indebtedness represented by the Securities of such series and the payment of the
principal of (and premium, if any) and interest on each of all of the Securities
of such series are hereby expressly made subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness.

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


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


                                     -87-
<PAGE>
 

          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.


                              THE KROGER CO.



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

Attest:


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


                              ..............................,
                                as Trustee



                              By.............................
 
Attest:


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


                                     -88-
<PAGE>
 

STATE OF OHIO      )
                   )  ss.:
COUNTY OF HAMILTON )


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



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


STATE OF . . .     )
                   )  ss.:
COUNTY OF . . . .  )

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



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

                                     -89-
