
<PAGE>   1
                                                                     EXHIBIT 4.1


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                           BEVERLY ENTERPRISES, INC.


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



                                SENIOR INDENTURE



                          Dated as of __________, 1996


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


                               [NAME OF TRUSTEE]


                                    Trustee


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                               TABLE OF CONTENTS

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<S>                       <C>                                                                                          <C>
ARTICLE I

                                        DEFINITIONS AND INCORPORATION BY REFERENCE  . . . . . . . . . . . . . . . . .   1
     SECTION 1.1          Definitions   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
     SECTION 1.2          Other Definitions   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
     SECTION 1.3          Incorporation by Reference of Trust Indenture Act   . . . . . . . . . . . . . . . . . . . .   6
     SECTION 1.4          Rules of Construction   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6

ARTICLE II

                                                      THE SECURITIES  . . . . . . . . . . . . . . . . . . . . . . . .   7
     SECTION 2.1          Issuable in Series  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
     SECTION 2.2          Establishment of Terms of Series of Securities  . . . . . . . . . . . . . . . . . . . . . .   7
     SECTION 2.3          Execution and Authentication  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
     SECTION 2.4          Registrar and Paying Agent  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
     SECTION 2.5          Paying Agent to Hold Money in Trust   . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
     SECTION 2.6          Securityholder Lists  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
     SECTION 2.7          Transfer and Exchange   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
     SECTION 2.8          Mutilated, Destroyed, Lost and Stolen Securities  . . . . . . . . . . . . . . . . . . . . .  13
     SECTION 2.9          Outstanding Securities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
     SECTION 2.10         Treasury Securities   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
     SECTION 2.11         Temporary Securities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
     SECTION 2.12         Cancellation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
     SECTION 2.13         Defaulted Interest  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
     SECTION 2.14         Global Securities   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
     SECTION 2.15         CUSIP Numbers   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

ARTICLE III

                                                        REDEMPTION  . . . . . . . . . . . . . . . . . . . . . . . . .  18
     SECTION 3.1          Notice to Trustees  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
     SECTION 3.2          Selection of Securities to be Redeemed  . . . . . . . . . . . . . . . . . . . . . . . . . .  18
     SECTION 3.3          Notice of Redemption  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
     SECTION 3.4          Effect of Notice of Redemption  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
     SECTION 3.5          Deposit of Redemption Price   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
     SECTION 3.6          Securities Redeemed in Part   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

ARTICLE IV

                                                        COVENANTS   . . . . . . . . . . . . . . . . . . . . . . . . .  20
     SECTION 4.1          Payment of Principal and Interest   . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
     SECTION 4.2          SEC Reports   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
     SECTION 4.3          Compliance Certificate  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
     SECTION 4.4          Stay, Extension and Usury Laws  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
     SECTION 4.5          Corporate Existence   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
     SECTION 4.6          Taxes   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21

ARTICLE V

                                                        SUCCESSORS  . . . . . . . . . . . . . . . . . . . . . . . . .  21
</TABLE>





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     SECTION 5.1          When Company May Merge, Etc.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
     SECTION 5.2          Successor Corporation Substituted   . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

ARTICLE VI

                                                  DEFAULTS AND REMEDIES   . . . . . . . . . . . . . . . . . . . . . .  22
     SECTION 6.1          Events of Default   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
     SECTION 6.2          Acceleration of Maturity; Rescission and Annulment.   . . . . . . . . . . . . . . . . . . .  24
     SECTION 6.3          Collection of Indebtedness and Suits for Enforcement by Trustee   . . . . . . . . . . . . .  25
     SECTION 6.4          Trustee May File Proofs of Claim  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
     SECTION 6.5          Trustee May Enforce Claims Without Possession of Securities   . . . . . . . . . . . . . . .  27
     SECTION 6.6          Application of Money Collected  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
     SECTION 6.7          Limitation on Suits   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
     SECTION 6.8          Unconditional Right of Holders to Receive Principal and Interest  . . . . . . . . . . . . .  28
     SECTION 6.9          Restoration of Rights and Remedies  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
     SECTION 6.10         Rights and Remedies Cumulative  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
     SECTION 6.11         Delay or Omission Not Waiver  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
     SECTION 6.12         Control by Holders  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
     SECTION 6.13         Waiver of Past Defaults   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
     SECTION 6.14         Undertaking for Costs   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
     SECTION 6.15         Enforcement of Rights of Conversion by Holders  . . . . . . . . . . . . . . . . . . . . . .  30

ARTICLE VII

                                                        CONVERSION  . . . . . . . . . . . . . . . . . . . . . . . . .  31
     SECTION 7.1          Conversion Privilege  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
     SECTION 7.2          Conversion Procedure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
     SECTION 7.3          Fractional Shares   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
     SECTION 7.4          Taxes on Conversion   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
     SECTION 7.5          Company to Provide Stock  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
     SECTION 7.6          Adjustment for Change in Capital Stock  . . . . . . . . . . . . . . . . . . . . . . . . . .  33
     SECTION 7.7          Adjustment for Rights Issue   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
     SECTION 7.8          Adjustment for Other Distributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
     SECTION 7.9          Current Market Price  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
     SECTION 7.10         When Adjustment May be Deferred   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
     SECTION 7.11         When No Adjustment Required   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
     SECTION 7.12         Notice of Adjustment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
     SECTION 7.13         Voluntary Reduction   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
     SECTION 7.14         Notice of Certain Transactions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
     SECTION 7.15         Reorganization of Company   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
     SECTION 7.16         Company Determination Final   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
     SECTION 7.17         Trustee's Disclaimer  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38

ARTICLE VIII

                                                         TRUSTEE  . . . . . . . . . . . . . . . . . . . . . . . . . .  38
     SECTION 8.1          Duties of Trustee   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
     SECTION 8.2          Rights of Trustee   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39
     SECTION 8.3          Individual Rights of Trustee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40
     SECTION 8.4          Trustee's Disclaimer  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40
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     SECTION 8.5          Notice of Defaults  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40
     SECTION 8.6          Reports by Trustee to Holders   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  41
     SECTION 8.7          Compensation and Indemnity  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  41
     SECTION 8.8          Replacement of Trustee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
     SECTION 8.9          Successor Trustee by Merger, etc.   . . . . . . . . . . . . . . . . . . . . . . . . . . . .  43
     SECTION 8.10         Eligibility; Disqualification   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  43
     SECTION 8.11         Preferential Collection of Claims Against Company   . . . . . . . . . . . . . . . . . . . .  43

ARTICLE IX
                                                SATISFACTION AND DISCHARGE  . . . . . . . . . . . . . . . . . . . . .  44
     SECTION 9.1          Satisfaction and Discharge of Indenture   . . . . . . . . . . . . . . . . . . . . . . . . .  44
     SECTION 9.2          Application of Trust Funds; Indemnification   . . . . . . . . . . . . . . . . . . . . . . .  45
     SECTION 9.3          Satisfaction, Discharge and Defeasance of Securities of any Series  . . . . . . . . . . . .  45
     SECTION 9.4          Defeasance of Certain Obligations   . . . . . . . . . . . . . . . . . . . . . . . . . . . .  47
     SECTION 9.5          Repayment to Company  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  49

ARTICLE X

                                                  AMENDMENTS AND WAIVERS  . . . . . . . . . . . . . . . . . . . . . .  49
     SECTION 10.1         Without Consent of Holders  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  49
     SECTION 10.2         With Consent of Holders   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50
     SECTION 10.3         Limitations   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50
     SECTION 10.4         Compliance with Trust Indenture Act   . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
     SECTION 10.5         Revocation and Effect of Consents   . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
     SECTION 10.6         Notation on or Exchange of Securities   . . . . . . . . . . . . . . . . . . . . . . . . . .  51
     SECTION 10.7         Trustee Protected   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51

ARTICLE XI

                                                      MISCELLANEOUS   . . . . . . . . . . . . . . . . . . . . . . . .  53
     SECTION 11.1         Trust Indenture Act Controls  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
     SECTION 11.2         Notices   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
     SECTION 11.3         Communication by Holders with Other Holders   . . . . . . . . . . . . . . . . . . . . . . .  54
     SECTION 11.4         Certificate and Opinion as to Conditions Precedent  . . . . . . . . . . . . . . . . . . . .  54
     SECTION 11.5         Statements Required in Certificate or Opinion   . . . . . . . . . . . . . . . . . . . . . .  54
     SECTION 11.6         Rules by Trustee and Agents   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
     SECTION 11.7         Legal Holidays  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
     SECTION 11.8         No Recourse Against Others.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
     SECTION 11.9         Counterparts.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
     SECTION 11.10        Governing Laws  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
     SECTION 11.11        No Adverse Interpretation of Other Agreements   . . . . . . . . . . . . . . . . . . . . . .  55
     SECTION 11.12        Successors.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
     SECTION 11.13        Severability.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
     SECTION 11.14        Table of Contents, Headings, Etc.   . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
     SECTION 11.15        Securities in a Foreign Currency or in ECU  . . . . . . . . . . . . . . . . . . . . . . . .  56
     SECTION 11.16        Judgment Currency   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  57

ARTICLE XII

                                                      SINKING FUNDS   . . . . . . . . . . . . . . . . . . . . . . . .  57
     SECTION 12.1         Applicability of Article  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  57
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     SECTION 12.2         Satisfaction of Sinking Fund Payments with Securities   . . . . . . . . . . . . . . . . . .  58
     SECTION 12.3         Redemption of Securities for Sinking Fund   . . . . . . . . . . . . . . . . . . . . . . . .  58
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<PAGE>   6
            Indenture dated as of __________, 1996, between Beverly
Enterprises, Inc., a Delaware corporation ("Company"), and
_____________________ ("Trustee").

            Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Securities issued under
this Indenture.



                                   ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.1 Definitions.

            "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" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.

            "Agent" means any Registrar, Paying Agent or Service Agent.

            "Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day for at
least five days in each calendar week and of general circulation in the place
in connection with which the term is used.  If it shall be impractical in the
opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that
is made or given by the Trustee shall constitute a sufficient publication of
such notice.

            "Bankruptcy Law" means title 11, U.S. Code or any similar Federal
or State law for the relief of debtors.

            "Bearer" means anyone in possession from time to time of a Bearer
Security.

            "Bearer Security" means any Security that does not provide for the
identification of the Holder thereof.

            "Board of Directors" means the Board of Directors of the Company or
any duly authorized committee thereof.





<PAGE>   7
            "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been adopted by the
Board of Directors or pursuant to authorization by the Board of Directors and
to be in full force and effect on the date of the certificate and delivered to
the Trustee.

            "Business Day" means a day other than a Saturday, a Sunday or a day
which shall be in the City of New York a day on which banking institutions are
authorized or obligated by law or required by executive order to be closed.

            "Capitalized Lease" means any lease of property where the
obligations of the lessee thereunder are required to be classified and
accounted for as a capitalized lease on a balance sheet of such lessee under
generally accepted accounting principles.

            "Common Stock" means the Common Stock, $.01 par value per share, of
the Company.

            "Company" means the party named as such above until a successor
replaces it and thereafter means the successor.

            "Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer.

            "Company Request" means a written request signed in the name of the
Company by its 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 office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered.

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

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

            "Depository" means, with respect to the Securities of any Series
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depository" as used
with respect to the Securities of any Series shall mean the Depository with
respect to the Securities of such Series.

            "Discount Security" means any Security that provides for an amount
less than the stated principal amount thereof to be due





                                       2

<PAGE>   8
and payable upon declaration of acceleration of the maturity thereof pursuant
to Section 6.2.

            "Dollars" means the currency of the United States of America.

            "ECU" means the European Currency Unit as determined by the
Commission of the European Union.

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

            "Foreign Currency" means any currency issued by a government other
than the government of the United States of America.

            "Foreign Government Securities" means with respect to Securities of
any Series that are denominated in a Foreign Currency, noncallable (i) direct
obligations of the government that issued such Foreign Currency for the payment
of which obligations its full faith and credit is pledged or (ii) obligations
of a person controlled or supervised by and acting as an agency or
instrumentality of such government, the payment of which obligations is
unconditionally guaranteed as a full faith and credit obligation of such
government.

            "Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section 2.1
evidencing all or part of a Series of Securities, issued to the Depository for
such Series or its nominee, and registered in the name of such Depository or
nominee.

            "Holder" or "Securityholder" means a person in whose name a
Security is registered or the holder of a Bearer Security.

            "Indebtedness" means, with respect to any person, and without
duplication:

            (a)     any liability of such person (A) for borrowed money,
     or (B) for any letter of credit for the account of such person supporting
     obligations of such person or other persons, or (C) evidenced by a bond,
     note, debenture or similar instrument (including a purchase money
     obligation) given in connection with the acquisition of any businesses,
     properties or assets of any kind (other than a trade payable or a current
     liability arising in the ordinary course of business), or (D) for the
     payment of money relating to a Capitalized Lease;

            (b)     any liability of others described in the preceding
     clause (a) that the person has guaranteed or that is otherwise its legal
     liability; and





                                       3

<PAGE>   9
            (c)     any amendment, supplement, modification, deferral,
     renewal, extension or refunding of any liability of the types referred to
     in clauses (a) and (b) above.

            "Indenture" means this Indenture as amended from time to time and
shall include the form and terms of particular Series of Securities established
or contemplated hereunder.

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

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

            "Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the Company's principal executive officer, principal
financial officer or principal accounting officer.

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

            "person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.

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

            "Responsible Officer" when used with respect to the Trustee, means
the chairman or the vice-chairman of the board of directors or trustees, the
chairman or vice-chairman of the executive committee of the board of directors
or trustees, the president, any vice-president, the treasurer, the secretary,
any trust officer, any second or assistant vice-president or any officer or
assistant officer of the Trustee other than those specifically above mentioned
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with a
particular subject.

            "SEC" means the Securities and Exchange Commission.





                                       4

<PAGE>   10
            "Securities" means the debentures, notes or other debt instruments
of the Company of any Series authenticated and delivered under this Indenture.

            "Series" or "Series of Securities" means each series of debentures,
notes or other debt instruments of the Company created pursuant to Sections 2.1
and 2.2 hereof.

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

            "Subsidiary" of any specified person means (i) a corporation a
majority of whose capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such person or by such person and a subsidiary or subsidiaries of such
person or by a subsidiary or subsidiaries of such person or (ii) any other
person (other than a corporation) in which such person or such person and a
subsidiary or subsidiaries of such person or a subsidiary or subsidiaries of
such person directly or indirectly, at the date of determination thereof has at
least majority ownership interest.

            "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act as so amended.

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

            "U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America which are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that





                                       5

<PAGE>   11
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation evidenced by such depository receipt.

SECTION 1.2      Other Definitions.

<TABLE>
<CAPTION>
                                                             DEFINED IN
        TERM                                                  SECTION
        ----                                                 ----------
        <S>                                                      <C>
        "Event of Default" . . . . . . . . . . . . . . . . . .     6.1
        "Journal"  . . . . . . . . . . . . . . . . . . . . . .   11.15
        "Judgment Currency"  . . . . . . . . . . . . . . . . .   11.16
        "Legal Holiday"  . . . . . . . . . . . . . . . . . . .    11.7
        "mandatory sinking fund payment" . . . . . . . . . . .    12.1
        "Market Exchange Rate" . . . . . . . . . . . . . . . .   11.15
        "New York Banking Day" . . . . . . . . . . . . . . . .   11.16
        "optional sinking fund payment"  . . . . . . . . . . .    12.1
        "Paying Agent" . . . . . . . . . . . . . . . . . . . .     2.4
        "Registrar"  . . . . . . . . . . . . . . . . . . . . .     2.4
        "Required Currency"  . . . . . . . . . . . . . . . . .   11.16
        "Service Agent"  . . . . . . . . . . . . . . . . . . .     2.4
</TABLE>

SECTION 1.3      Incorporation by Reference of Trust Indenture Act.

                 Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:

                          "Commission" means the SEC.

                          "indenture securities" means the Securities.

                          "indenture security holder" means a Securityholder.

                          "indenture to be qualified" means this Indenture.

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

                          "obligor" on the indenture securities means the
         Company and any successor obligor upon the Securities.

                 All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA and not otherwise defined herein are used herein as so defined.

SECTION 1.4      Rules of Construction.

                 Unless the context otherwise requires:

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





                                       6

<PAGE>   12
                 (b)      an accounting term not otherwise defined has the
         meaning assigned to it in accordance with generally accepted
         accounting principles;

                 (c)      references to "generally accepted accounting
         principles" shall mean generally accepted accounting principles in
         effect as of the time when and for the period as to which such
         accounting principles are to be applied;

                 (d)      "or" is not exclusive;

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

                 (f)      provisions apply to successive events and
         transactions.

                                   ARTICLE II

                                 THE SECURITIES

SECTION 2.1      Issuable in Series.

                 The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited.  The Securities
may be issued in one or more Series.  All Securities of a Series shall be
identical except as may be provided in a Board Resolution and/or an Officers'
Certificate detailing the adoption of the terms thereof pursuant to the Board
Resolution or a supplemental indenture hereto.  In the case of Securities of a
Series to be issued from time to time, the Officers' Certificate may provide
for the method by which specified terms (such as interest rate, maturity date,
record date or date from which interest should accrue) are to be determined.
Securities may differ between Series, in respect of any matters; provided that
all Series of Securities shall be equally and ratably entitled to the benefits
of this Indenture.

         The Securities will rank equally with all other unsecured and
unsubordinated indebtedness of the Company.

SECTION 2.2      Establishment of Terms of Series of Securities.

                 At or prior to the issuance of any Securities within a Series,
the following shall be established (as to the Series generally, in the case of
Subsections 2.2.1 and 2.2.2 and either as to such Securities within the Series
or as to the Series generally in the case of Subsections 2.2.3 through 2.2.21)
by either a Board Resolution, a supplemental indenture hereto or an Officers'
Certificate pursuant to authority granted under a Board Resolution:

                          2.2.1          the title of the Series (which shall
         distinguish the Securities of that particular Series from the
         Securities of any other Series);





                                       7

<PAGE>   13
                          2.2.2    any limit upon the aggregate principal
         amount of the Securities of the Series which may be authenticated and
         delivered under this Indenture (except for Securities authenticated
         and delivered upon registration of transfer of, or in exchange for, or
         in lieu of, other Securities of the Series pursuant to Section 2.7,
         2.8 or 2.11);

                          2.2.3    the date or dates on which the principal of
         the Securities of the Series is payable;

                          2.2.4    the rate or rates at which the Securities of
         the Series shall bear interest, if any, or the formula or provision
         pursuant to which such rate or rates are determined including, but not
         limited to, any commodity, commodity index, stock exchange index or
         financial index, the date or dates from which such interest, if any,
         shall accrue, the dates on which such interest, if any, shall be
         payable and the record date for the interest payable on any interest
         payment date;

                          2.2.5    the place or places where the principal of,
         the premium, if any, and interest on the Securities of the Series will
         be payable, or the method of such payment, if by wire transfer, mail
         or other means;

                          2.2.6    the date, if any, after which the price or
         prices at which and the terms and conditions upon which the Securities
         of the Series may, pursuant to any optional or mandatory redemption
         provisions, be redeemed and the other detailed terms and provisions of
         any such optional or mandatory redemption provisions;

                          2.2.7    the person to whom any interest on the
         Securities of the Series shall be payable, if other than the person in
         whose name the Securities of the Series are registered at the close of
         business on the record date for such interest.

                          2.2.8    the obligation, if any, of the Company to
         redeem or purchase the Securities of the Series pursuant to any
         sinking fund or analogous provisions or at the option of a Holder
         thereof and the period or periods within which, the price or prices 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;

                          2.2.9    if other than denominations of $1,000 and
         any integral multiple thereof, the denominations in which the
         Securities of the Series shall be issuable;

                          2.2.10   if the amount of principal of or premium,
         if any, or interest on any of such Securities of the Series may be
         determined with reference to an index or pursuant to a formula, the
         manner in which such amounts will be determined;





                                       8

<PAGE>   14
                          2.2.11   if the principal amount payable at the
         Stated Maturity of any of the Securities of the Series will not be
         determinable as of any one or more dates prior to the stated maturity,
         the amount which will be deemed to be such principal amount as of any
         such date for any purpose, including the principal amount thereof
         which will be due and payable upon any maturity other than the stated
         maturity or which will be deemed to be outstanding as of any such date
         (or, in any such case, the manner in which such deemed principal
         amount is to be determined);

                          2.2.12   if applicable, that such Securities of the
         Series, in whole or any specified part, are defeasible pursuant to
         Article IX of this Indenture;

                          2.2.13   if other than the principal amount thereof,
         the portion of the principal amount of the Securities of the Series
         that shall be payable upon declaration of acceleration of the maturity
         thereof pursuant to Section 6.2;

                          2.2.14   the currency of denomination of the
         Securities of the Series, which may be Dollars, any Foreign Currency
         or composite currency, including, but not limited to, the ECU, and if
         such currency of denomination is a composite currency other than the
         ECU, the agency or organization, if any, responsible for overseeing
         such composite currency;

                          2.2.15    if other than the currency of the United
         States, the designation of the currency or currencies in which payment
         of the principal of, premium, if any, or interest on the Securities of
         the Series will be made, and the designation, if any, of the currency
         or currencies in which payment of the principal of, premium, if any,
         or interest on the Securities of the Series, at the election of a
         Holder thereof, may also be payable;

                          2.2.16   if the payments of principal of, premium, if
         any, or interest on the Securities of the Series are to be made in a
         Foreign Currency other than the currency in which such Securities are
         denominated, the currency, currencies or currency units in which
         payment of any such amount will be payable, the periods within which
         and the terms and conditions upon which such election is to be made
         and the amount so payable (or the manner in which such amount is to be
         determined);

                          2.2.17   if other than currency of the United States
         of America, the currency, currencies or currency units in which the
         principal of, premium, if any, or interest on the Securities of the
         Series may be determined with reference to an index, the manner in
         which such amounts shall be determined and payable (and the manner in
         which the equivalent of the principal amount thereof in the currency
         of the United States of America is to be determined for any purpose,
         including for





                                       9

<PAGE>   15
         the purpose of determining the principal amount deemed to be
         outstanding at any time);

                          2.2.18   the forms of the Securities of the Series in
         bearer or fully registered form (and, if in fully registered form,
         whether the Securities will be issuable in the form of one or more
         Global Securities); and

                          2.2.16   if issuable in the form of one or more
         Global Securities, the respective depositaries for such Global
         Securities, the form of any legend or legends to be borne by any such
         Global Securities, any circumstances under which any such Global
         Securities may be exchanged in whole or in part for Securities of the
         Series registered, any transfer of such Global Securities in whole or
         in part for Securities of the Series  registered, any transfer of such
         Global Securities in whole or in part may be registered, in the names
         of Persons other than the depository for such Global Securities or its
         nominee;

                          2.2.19   any depositories, interest rate calculation
         agents, exchange rate agents or other agents with respect to
         Securities of such Series if other than those appointed herein.

                          2.2.20   any terms by which any Securities of the
         Series and any change in the right of the trustee of the Holders to
         declare the principal amount of any of such Securities due and
         payable; and

                          2.2.21  any other terms of the Securities of the
         Series (including any additions to or changes in the covenants or the
         Events of Default contained in this Indenture applicable to any of
         such Securities of the Series).

                 All Securities of any one Series need not be issued at the
same time and may be issued from time to time, consistent with the terms of
this Indenture, if so provided by or pursuant to the Board Resolution or
Officers' Certificate referred to above or as set forth in a supplemental
indenture hereto, and, unless otherwise provided, the authorized principal
amount of any Series may be increased to provide for issuances of additional
Securities of such Series.

SECTION 2.3      Execution and Authentication.

                 One Officer shall sign the Securities for the Company by
manual or facsimile signature.  The Company's seal, which may be in facsimile
form, shall be reproduced on the Securities.

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





                                       10

<PAGE>   16
                 A Security shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.  The signature
shall be conclusive evidence that the Security has been authenticated under
this Indenture.

                 The Trustee shall at any time, and from time to time,
authenticate Securities for original issue in the principal amount provided in
the Board Resolution or Officers' Certificate detailing the adoption of terms
pursuant to the Board Resolution, upon receipt by the Trustee of a Company
Order.  If provided for in such procedures, such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from
the Company or its duly authorized agent or agents, which oral instructions
shall be promptly confirmed in writing.  Each Security shall be dated the date
of its authentication unless otherwise provided by Board Resolution or
supplemental indenture hereto.

                 The aggregate principal amount of Securities of any Series
outstanding at any time may not exceed any limit upon the maximum principal
amount for such Series set forth in the Board Resolution or Officers'
Certificate or supplemental indenture hereto delivered pursuant to Section 2.2,
except as provided in Section 2.8.

                 Prior to the issuance of Securities of any Series, the Trustee
shall have received and (subject to Section 8.2) shall be fully protected in
relying on:  (a) the Board Resolution or Officers' Certificate detailing the
adoption of terms pursuant to the Board Resolution or a supplemental indenture
hereto establishing the form of the Securities of that Series or of Securities
within that Series and the terms of the Securities of that Series or of
Securities within that Series, (b) an Officers' Certificate complying with
Section 11.4, and (c) an Opinion of Counsel complying with Section 11.4.

                 The Trustee shall have the right to decline to authenticate
and deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors and/or vice-presidents shall
determine that such action would expose the Trustee to personal liability to
Holders of any then outstanding Series of Securities.

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

SECTION 2.4      Registrar and Paying Agent.





                                       11

<PAGE>   17
                 The Company shall maintain, with respect to each Series of
Notes, at the place or places specified with respect to such Series pursuant to
Section 2.2, an office or agency where Securities of such Series may be
presented or surrendered for payment of principal, premium, if any, and
interest thereon (except that at the option of the Company, payment of any
interest may be made by check mailed to the address of the person entitled
thereto as such address appears in the security register) ("Paying Agent"),
where Securities of such Series may be surrendered for registration of transfer
or exchange ("Registrar") and where notices and demands to or upon the Company
in respect of the Securities of such Series and this Indenture may be served
("Service Agent").  The Registrar shall keep a register with respect to each
Series of Securities and to their transfer and exchange.  The Company will give
prompt written notice to the Trustee of the name and address, and any change in
the name or address, of each Registrar, Paying Agent or Service Agent.  If at
any time the Company shall fail to maintain any such required Registrar, Paying
Agent or Service Agent or shall fail to furnish the Trustee with the name and
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
co-registrars, additional paying agents or additional service agents 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
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.2 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 name or address of
any such co-registrar, additional paying agent or additional service agent.
The term "Registrar" includes any co-registrar; the term "Paying Agent"
includes any additional paying agent; and the term "Service Agent" includes any
additional service agent.

                 The Company hereby appoints the Trustee the initial Registrar,
Paying Agent and Service Agent for each Series unless another Registrar, Paying
Agent or Service Agent, as the case may be, is appointed prior to the time
Securities of that Series are first issued.

SECTION 2.5      Paying Agent to Hold Money in Trust.

                 The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust, for the
benefit of Securityholders of any Series of Securities, or the Trustee, all
money held by the Paying Agent for the payment of principal or interest on the
Series of Securities, and will notify the Trustee of any default by the Company
in making any such payment.  While any such default continues, the Trustee





                                       12

<PAGE>   18
may require a Paying Agent to pay all money held by it to the Trustee.  The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee.  Upon payment over to the Trustee, the Paying Agent (if other than
the Company or a Subsidiary) shall have no further liability for the money.  If
the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of Securityholders of any Series of
Securities all money held by it as Paying Agent.

SECTION 2.6      Securityholder Lists.

                 The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders of each Series of Securities and shall otherwise
comply with TIA Section  312(a).  If the Trustee is not the Registrar, the
Company shall furnish to the Trustee at least ten days before each interest
payment date and at such other times as the Trustee may request in writing a
list, in such form and as of such date as the Trustee may reasonably require,
of the names and addresses of Securityholders of each Series of Securities.

SECTION 2.7      Transfer and Exchange.

                 Where Securities of a Series are presented to the Registrar or
a co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of the same Series and date of maturity of
other denominations, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met.  To permit
registrations of transfers and exchanges, the Trustee shall authenticate
Securities at the Registrar's request.  No service charge shall be made for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.11 or 10.6).

                 Except in connection with a conversion pursuant to Article
VII, neither the Company nor the Registrar shall be required (a) to issue,
register the transfer of, or exchange Securities of any Series for the period
beginning at the opening of business fifteen days immediately preceding the
mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.

SECTION 2.8      Mutilated, Destroyed, Lost and Stolen Securities.





                                       13

<PAGE>   19
                 If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security  of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.

                 If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the Trustee
shall authenticate and make available for delivery, 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 (unless the Holder
elects conversion pursuant to Article VII).

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

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

SECTION 2.9      Outstanding Securities.

                 The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding.





                                       14

<PAGE>   20
                 If a Security is replaced pursuant to Section 2.8, it ceases
to be outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

                 If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds on the Maturity date of Securities of a
Series money sufficient to pay such Securities payable on that date, then on
and after that date such Securities of the Series cease to be outstanding and
interest on them ceases to accrue.

                 A Security does not cease to be outstanding because the
Company or an Affiliate holds the Security.

                 In determining whether the Holders of the requisite principal
amount of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes
shall be the amount of the principal thereof that would be due and payable as
of the date of such determination upon a declaration of acceleration of the
Maturity thereof pursuant to Section 6.2.

SECTION 2.10     Treasury Securities.

                 In determining whether the Holders of the required principal
amount of Securities of a Series have concurred in any direction, waiver or
consent, Securities of a Series owned by the Company or an Affiliate shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities of a Series that the Trustee knows are so owned shall be so
disregarded.

SECTION 2.11     Temporary Securities.

                 Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities
upon a Company Order.  Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities.  Without unreasonable delay, the Company
shall prepare and the Trustee upon request shall authenticate definitive
Securities of the same Series and date of maturity in exchange for temporary
Securities.  Until so exchanged, temporary securities shall have the same
rights under this Indenture as the definitive Securities.

SECTION 2.12     Cancellation.

                 The Company at any time may deliver Securities to the Trustee
for cancellation.  The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for





                                       15

<PAGE>   21
registration of transfer, exchange or payment.  The Trustee shall cancel all
Securities surrendered for transfer, exchange, payment, replacement or
cancellation and shall destroy such cancelled Securities (subject to the record
retention requirement of the Exchange Act) and deliver a certificate of such
destruction to the Company, unless the Company otherwise directs.  The Company
may not issue new Securities to replace Securities that it has paid or
delivered to the Trustee for cancellation.

SECTION 2.13     Defaulted Interest.

                 If the Company defaults in a payment of interest on a Series
of Securities, it shall pay the defaulted interest, plus, to the extent
permitted by law, any interest payable on the defaulted interest, to the
persons who are Securityholders of the Series on a subsequent special record
date.  The Company shall fix the record date and payment date.  At least 30
days before the record date, the Company shall mail to the Trustee and to each
Securityholder of the Series a notice that states the record date, the payment
date and the amount of interest to be paid.  The Company may pay defaulted
interest in any other lawful manner.

SECTION 2.14     Global Securities.

                 2.14.1   Terms of Securities.  A supplemental indenture or a
         Board Resolution (and, to the extent not set forth in the Board
         Resolution, an Officers' Certificate detailing the adoption of terms
         pursuant to the Board Resolution) shall establish whether the
         Securities of a Series shall be issued in whole or in part in the form
         of one or more Global Securities and the Depository for such Global
         Security or Securities.

                 2.14.2   Transfer and Exchange.  Notwithstanding any
         provisions to the contrary contained in Section 2.7 of this Indenture
         and in addition thereto, any Global Security shall be exchangeable
         pursuant to Section 2.7 of this Indenture for securities registered in
         the names of Holders other than the Depository for such Security or
         its nominee only if (i) such Depository notifies the Company that it
         is unwilling or unable to continue as Depository for such Global
         Security or if at any time such Depository ceases to be a clearing
         agency registered under the Exchange Act, and, in either case the
         Company fails to appoint a successor Depository within 90 days of such
         event, (ii) the Company executes and delivers to the Trustee an
         Officers' Certificate to the effect that such Global Security shall be
         so exchangeable, (ii) an event shall have happened and be continuing
         which is or after notice or lapse of time or both, would be, an Event
         of Default with respect to the Securities represented by such Global
         Security, (iii) there shall exist such circumstances, if any, in
         addition to or in lieu of those described above as may be described in
         a supplemental indenture or a Board Resolution establishing the
         Securities of a Series.  Any Global Security





                                       16

<PAGE>   22
         that is exchangeable pursuant to the preceding sentence shall be
         exchangeable for Securities registered in such names as the Depository
         shall direct in writing in an aggregate principal amount equal to the
         principal amount of the Global Security with like tenor and terms.

                 Except as provided in this Section 2.14.2, a Global Security
         may not be transferred except as a whole by the Depository with
         respect to such Global Security to a nominee of such Depository, by a
         nominee of such Depository to such Depository or another nominee of
         such Depository or by the Depository or any such nominee to a
         successor Depository or a nominee of such a successor Depository.

                 2.14.3   Legend.  Any Global Security issued 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 the Depository or a nominee of the Depository.  This
         Security is exchangeable for Securities registered in the name of a
         person other than the Depository or its nominee only in the limited
         circumstances described in the Indenture, and may not be transferred
         except as a whole by the Depository to a nominee of the Depository, by
         a nominee of the Depository to the Depository or another nominee of
         the Depository or by the Depository or any such nominee to a successor
         Depository or a nominee of such a successor Depository."

                 2.14.4   Acts of Holders.  The Depository, as a Holder, may
         appoint agents and otherwise authorize participants to give or take
         any request, demand, authorization, direction, notice, consent, waiver
         or other action which a Holder is entitled to give or take under this
         Indenture.

                 2.14.5   Payments.  Notwithstanding the other provisions of
         this Indenture, unless otherwise specified as contemplated by Section
         2.2, payment of the principal of and interest on any Global Security
         shall be made to the person specified therein.

                 2.14.6   Consents, Declaration and Directions.  Except as
         provided in Section 2.14.5, the Company, the Trustee and any Agent
         shall treat a person as the Holder of such principal amount of
         outstanding Securities of such Series represented by a Global Security
         as shall be specified in a written statement of the Depository with
         respect to such Global Security, for purposes of obtaining any
         consents, declarations or directions required to be given by the
         Holders pursuant to this Indenture.

SECTION 2.15     CUSIP Numbers.





                                       17

<PAGE>   23
                 The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers
in notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other elements of
identification printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.

                                  ARTICLE III

                                   REDEMPTION

SECTION 3.1      Notice to Trustees.

                 The Company may, with respect to any Series of Securities,
reserve the right to redeem and pay the Series of Securities or may covenant to
redeem and pay the Series of Securities or any part thereof before maturity at
such time and on such terms as provided for in such Securities.  If a Series of
Securities is redeemable and the Company wants or is obligated to redeem prior
to the Stated Maturity thereof all or part of the Series of Securities pursuant
to the terms of such Securities, it shall notify the Trustee of the redemption
date and the principal amount of Series of Securities to be redeemed.  The
Company shall give the notice at least 60 days before the redemption date (or
such shorter notice as may be acceptable to the Trustee).

SECTION 3.2      Selection of Securities to be Redeemed.

                 Unless otherwise indicated for a particular Series by Board
Resolution or by a supplemental indenture hereto (or to the extent not set
forth in such Board Resolution or supplemental indenture, in an Officers'
Certificate so indicating pursuant to the Board Resolution), if less than all
the Securities of a Series are to be redeemed, the Trustee shall select the
Securities of the Series to be redeemed in any manner that the Trustee deems
fair and appropriate.  The Trustee shall make the selection from Securities of
the Series outstanding not previously called for redemption.  The Trustee may
select for redemption portions of the principal of Securities of the Series
that have denominations larger than $1,000.  Securities of the Series and
portions of them it selects shall be in amounts of $1,000 or whole multiples of
$1,000 or, with respect to Securities of any Series issuable in other
denominations pursuant to Section 2.2.9, the minimum principal denomination for
each Series and integral multiples thereof.  Provisions of this Indenture that
apply to Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.





                                       18

<PAGE>   24
SECTION 3.3      Notice of Redemption.

                 Unless otherwise indicated for a particular Series by Board
Resolution or by a supplemental indenture hereto, at least 30 days but not more
than 60 days before a redemption date, the Company shall mail a notice of
redemption by first-class mail to each Holder whose Securities are to be
redeemed and if any Bearer Securities are outstanding, publish on one occasion
a notice in an Authorized Newspaper.

                 The notice shall identify the Securities of the Series to be
redeemed and shall state:

                 (a)      the redemption date;

                 (b)      the redemption price;

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

                 (d)      that Securities of the Series called for redemption
         must be surrendered to the Paying Agent to collect the redemption
         price;

                 (e)      that interest on Securities of the Series called for
         redemption ceases to accrue on and after the redemption date; and

                 (f)      any other information as may be required by the terms
         of the particular Series or the Securities of a Series being redeemed.

                 At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.

SECTION 3.4      Effect of Notice of Redemption.

                 Once notice of redemption is mailed or published as provided
in Section 3.3, Securities of a Series called for redemption (and not converted
in accordance with the provisions of Article VII by the close of business on
the Business Day immediately preceding the date of redemption fixed in the
notice) become due and payable on the redemption date and at the redemption
price.  A notice of redemption may not be conditional.  Upon surrender to the
Paying Agent, such Securities shall be paid at the redemption price plus
accrued interest to the redemption date.

SECTION 3.5      Deposit of Redemption Price.

                 On or before the redemption date, the Company shall deposit
with the Paying Agent money sufficient to pay the redemption price of and
accrued interest on all Securities to be redeemed on that date.

SECTION 3.6      Securities Redeemed in Part.





                                       19

<PAGE>   25
                 Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security of the same Series and
the same maturity equal in principal amount to the unredeemed portion of the
Security surrendered.

                                   ARTICLE IV

                                   COVENANTS

SECTION 4.1      Payment of Principal 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
interest on the Securities of that Series in accordance with the terms of such
Securities and this Indenture.

SECTION 4.2      SEC Reports.

                 The Company shall deliver to the Trustee within 15 days after
it files them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which the Company
is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act.  The Company also shall comply with the other provisions of TIA
Section 314(a).

SECTION 4.3      Compliance Certificate.

                 The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company, an Officers' Certificate stating
that a review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge).

                 The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee within 90 days of becoming aware of (i) any
Default, Event of Default or default in the performance of any covenant,
agreement or condition contained in this Indenture or (ii) any event of default
referred to in Section 6.1(e), an Officers' Certificate specifying such
Default, Event of Default or default.

SECTION 4.4      Stay, Extension and Usury Laws.





                                       20

<PAGE>   26
                 The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not, by resort to any
such law, 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 has been enacted.

SECTION 4.5      Corporate Existence.

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

SECTION 4.6      Taxes.

                 The Company shall pay prior to delinquency all taxes,
assessments and governmental levies, except as contested in good faith and by
appropriate proceedings.

                                   ARTICLE V

                                   SUCCESSORS

SECTION 5.1      When Company May Merge, Etc.

                 The Company shall not consolidate or merge with or into, or 
sell, lease, convey or otherwise dispose of all or substantially all of its
assets to, any person unless:

                 (a)      the corporation formed by or surviving any such
         consolidation or merger (if other than the Company), or to which such
         sale, lease, conveyance or other disposition shall have been made,
         assumes by supplemental indenture or Board Resolution, all the
         obligations of the Company under the Securities and this Indenture;
         and

                 (b)      immediately after the transaction no Default or Event
         of Default exists.

                 The Company shall deliver to the Trustee prior to the 
consummation of the proposed transaction an Officers' Certificate





                                       21

<PAGE>   27
to the foregoing effect and an Opinion of Counsel stating that the proposed
transaction and such supplemental indenture comply with this Indenture.

SECTION 5.2      Successor Corporation Substituted.

                 Upon any consolidation or merger, or any sale, lease, 
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.1, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition 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 has been named
as the Company herein; provided, however, that the predecessor Company in the
case of a sale, lease, conveyance or other disposition shall not be released
from the obligation to pay the principal of and interest on the Securities.

                                   ARTICLE VI

                             DEFAULTS AND REMEDIES

SECTION 6.1      Events of Default.

                 "Event of Default," wherever used herein with respect to
Securities of any Series, means any one of the following events, except the
events set forth in clause (e) below, which shall not apply for the benefit of
Securities of a Series as to which, pursuant to Section 2.2.21 in the
establishing Board Resolution and Officers' Certificate or supplemental
indenture hereto, it is provided that such Series shall not have the benefit of
said Event of Default (whatever the reason for such Event of Default and
whether it shall 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):

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

                 (b)      default in the payment of principal, or premium, if
         any, of any Security of that Series at its Stated Maturity; or

                 (c)      default for 30 days in payment of any interest on any
         Securities of that Series; or

                 (d)      default in the payment of principal, premium, if any,
         of any Security of that Series within 30 days following redemption or
         purchase by the Company at the option of Holder (if such redemption or
         purchase provision is provided in the supplemental indenture or Board
         Resolution applicable to the Securities of such Series; or





                                       22

<PAGE>   28
                 (e)      default in the deposit of any sinking fund payment,
         when and as due by the terms of a Security of that Series; or

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

                 (g) a default, not being contested by the Company in good
         faith, under any mortgage, indenture or instrument under which there
         may be issued, secured or evidenced any Indebtedness for money
         borrowed by the Company, whether such Indebtedness now exists or shall
         be created hereafter, if (a) either (i) such default results from the
         failure to pay any such Indebtedness at its stated final maturity or
         (ii) relates to an obligation other than the obligation to pay such
         Indebtedness at its stated final maturity and results in the holder or
         holders of such Indebtedness causing such Indebtedness to become due
         prior to its stated maturity and (b) the principal amount of such
         Indebtedness, together with the principal amount of any other such
         Indebtedness in default for failure to pay principal at stated final
         maturity or the maturity of which has been so accelerated, aggregates
         in excess of an amount specified in a supplemental indenture or a
         Board Resolution applicable to the Securities of such Series; or

                 (h)      the Company pursuant to or within the meaning of any
         Bankruptcy Law:

                          (i)     commences a voluntary case,

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

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

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

                          (v)     generally is unable to pay its debts as the
                 same become due; or





                                       23

<PAGE>   29
                 (i)      a court of competent jurisdiction enters an order or
         decree under any Bankruptcy Law that:

                          (i)     is for relief against the Company in an
                 involuntary case,

                          (ii)    appoints a Custodian of the Company or for
                 all or substantially all of its property, or

                          (iii)   orders the liquidation of the Company,

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

                 (j)      any other Event of Default provided with respect to
         Securities of that Series.

SECTION 6.2      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 Securities of that Series are Discount Securities, such portion of the
principal amount as may be specified in the terms of such Securities) of all of
the Securities of that Series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable.  If an Event of Default specified in Section
6.1(f) or (g) shall occur, the principal amount (or specified amount) of all
outstanding Securities shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.

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

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

                          (i)     all overdue interest on all Securities of
                 that Series,

                          (ii)    the principal of any Securities of that
                 Series which have become due otherwise than by such
                 declaration





                                       24

<PAGE>   30
                 of acceleration and interest thereon at the rate or rates 
                 prescribed therefor in such Securities,

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

                          (iv)    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
                 (b)      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 6.13.

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

SECTION 6.3      Collection of Indebtedness and Suits for Enforcement by
                 Trustee.

                 The Company covenants that if

                 (a)      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 60 days, or

                 (b)      default is made in the payment of principal of any
         Security at the Maturity thereof, or

                 (c)      default is made in the deposit of any sinking fund
         payment when and as due by the terms of a Security,

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 interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal or 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 the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same





                                       25

<PAGE>   31
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or deemed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.

                 If an Event of Default with respect to any 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 6.4      Trustee May File Proofs of Claim.

                 In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor upon
the Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,

                 (a)      to file and prove a claim for the whole amount of
         principal and interest owing and unpaid in respect of the Securities
         and to file such other papers or documents as may be necessary or
         advisable in order to have the claims of the Trustee (including any
         claim for the reasonable compensation, expenses, disbursements and
         advances of the Trustee, its agents and counsel) and of the Holders
         allowed in such judicial proceeding, and

                 (b)      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 8.7.

                 Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of





                                       26

<PAGE>   32
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

SECTION 6.5      Trustee May Enforce Claims Without Possession of Securities.

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

SECTION 6.6      Application of Money Collected.

                 Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or 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 8.7; and

                          Second:    To the payment of the amounts then due and
         unpaid for principal of 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 interest,
         respectively; and

                          Third:     To the Company.

SECTION 6.7        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

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

                   (b)    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





                                       27

<PAGE>   33
         in respect of such Event of Default in its own name as Trustee
         hereunder;

                   (c)    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;

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

                   (e)    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 such
Holders.

SECTION 6.8        Unconditional Right of Holders to Receive Principal 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 interest on such
Security on the Stated Maturity or Stated 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 or to demand conversion of its
Securities pursuant to Article VII, and such rights shall not be impaired
without the consent of such Holder.

SECTION 6.9        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.





                                       28

<PAGE>   34
SECTION 6.10       Rights and Remedies Cumulative.

                   Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in Section 2.8,
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 6.11       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.

SECTION 6.12       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

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

                   (b)    the Trustee may take any other action deemed proper
         by the Trustee which is not inconsistent with such direction, and

                   (c)    subject to the provisions of Section 6.1, the Trustee
         shall have the right to decline to follow any such direction if the
         Trustee in good faith shall, by a Responsible Officer of the Trustee,
         determine that the proceeding so directed would involve the Trustee in
         personal liability.

SECTION 6.13       Waiver of Past Defaults.

                   The Holders of not less than a majority in aggregate
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





                                       29

<PAGE>   35
of or interest on any Security of such Series, (2) under Article VII or (3) in
respect of a covenant or provision hereof which under Article X 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.

SECTION 6.14       Undertaking for Costs.

                   All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, 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, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the outstanding Securities of any Series, to
any suit instituted by any Holder for the enforcement of the payment of the
principal of or interest on any Security on or after the Stated Maturity or
Stated Maturities expressed in such Security (or, in the case of redemption, on
or after the redemption date), or for the enforcement of the right to convert
the Securities of any Series as provided in Article VII.

SECTION 6.15       Enforcement of Rights of Conversion by Holders.

                   Anything in this Indenture to the contrary notwithstanding,
the Holder of the Securities of any Series, without reference to and without
the consent of either the Trustee or the Holder of any other Securities, in his
own behalf and for his own benefit may enforce, and may institute and maintain
any proceedings suitable to enforce, his right to convert his Securities into
Common Stock or other securities as provided in Article VII.





                                       30

<PAGE>   36
                                  ARTICLE VII

                                   CONVERSION

SECTION 7.1        Conversion Privilege.

                   Holders of the Securities of any Series shall have the
conversion rights set forth in this Article VII if the supplemental indenture
or Board Resolution applicable to the Securities of such Series so designates.

                   A Holder of the Securities of any Series may convert such
Securities into Common Stock or any other securities specified in the
supplemental indenture or Board Resolution applicable to the Securities of such
Series at any time prior to the close of business on a date to be designated in
such supplemental indenture or Board Resolution.  If Securities of any Series
are called for redemption, the Holder may convert such Securities at any time
before the close of business on the Business Day immediately preceding the
redemption date, unless the Company defaults in making the payment due upon
redemption.

                   The initial conversion price shall be set forth in the
applicable supplemental indenture or Board Resolution.  The conversion price is
subject to adjustment.

                   "Common Stock" means the Company's common stock, $___ par
value per share, as it exists on the date of this Indenture as originally
signed.

SECTION 7.2        Conversion Procedure.

                   To convert the Securities of any Series, a Holder must (1)
complete and sign the conversion notice attached to the Securities, (2)
surrender the Securities to the Company at the office or agency to be
maintained by the Company, (3) furnish appropriate endorsements and transfer
documents if required by the Company, and (4) pay any transfer or similar tax
if required.  The date on which the Holder satisfies all those requirements is
the conversion date.  As soon as practical after the conversion date, the
Company shall deliver a certificate for the number of full shares of Common
Stock, or other Securities as applicable, issuable upon the conversion and a
check for any fractional share of Common Stock or other securities as
applicable.  The person in whose name the certificate is registered shall be
treated as a stockholder of record on and after the conversion date.

                   No payment or adjustment will be made for accrued interest
on the converted Securities of any Series.  If the Securities of a Series not
called for redemption are converted between a record date for the payment of
interest and the next succeeding interest payment date, such Securities must be
accompanied by funds equal to the interest payable on such interest payment
date on the principal amount so converted.  Nothing in this





                                       31

<PAGE>   37
Section shall affect the right of a person in whose name the Securities of a
Series are registered at the close of business on any record date with respect
to any interest payment date to receive the interest payable thereon on such
interest payment date in accordance with the terms of the applicable
supplemental indenture or Board Resolution.

                   If a Holder converts more than one Security of a Series at
the same time, the number of full shares of Common Stock or other securities
issuable upon the conversion shall be based on the total principal amount of
the Securities converted.

                   Upon surrender of a Security of a Series that is converted
in part, the trustee shall authenticate for the Holder a new Security of a
Series equal in principal amount to the unconverted portion of the Security of
the Series surrendered.

SECTION 7.3        Fractional Shares.

                   The Company will not issue a fractional share of Common
Stock, or other securities as applicable, upon conversion of the Securities of
any Series.  Instead the Company will deliver its check for the current market
value of the fractional share, or other securities as applicable.  The current
market value of a fraction of a share, or other securities as applicable, is
determined by multiplying the current market price of a full share, or other
securities as applicable, by the fraction and rounding the result to the
nearest cent.

                   For purposes of this Section 7.3, but not of Sections 7.7
and 7.8 the current market price of a share of Common Stock is the last
reported sale price of the Common Stock on the New York Stock
Exchange--Composite Tape on the last trading day prior to the conversion date.
In the absence of such quotation, the Company shall determine the current
market price on the basis of such quotations as it considers appropriate.

SECTION 7.4        Taxes on Conversion.

                   Conversion price adjustments or omissions in making such
adjustments may, under certain circumstances, be deemed to be distributions
that could be taxable as dividends under the Internal Revenue Code to Holders
of Securities or holders of Common Stock.

                   If a Holder of the Securities of a Series converts its
Securities, the Company shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of shares of Common Stock upon the conversion.
However, the Holder shall pay any such tax which is due.

SECTION 7.5        Company to Provide Stock.

                   The Company shall reserve out of its authorized but unissued
Common Stock or its Common Stock held in treasury enough





                                       32

<PAGE>   38
shares of Common Stock to permit the conversion of the Securities of any
Series.

                   All shares of Common Stock which may be issued upon
conversion of the Securities of any Series shall be fully paid and
non-assessable.

                   The Company will endeavor to comply with all securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
the Securities of any Series and will endeavor to list such shares on each
national securities exchange on which the Common Stock is then listed.

SECTION 7.6        Adjustment for Change in Capital Stock.

                   The conversion price will be subject to adjustment in case
of certain events, including:

                   (a)   the subdivision, combination or reclassification of the
outstanding Common Stock of the Company,

                   (b)   the issuance of Common Stock as a dividend or
distribution on Common Stock,

                   (c)   the issuance of rights or warrants (expiring within 45
days after the record date) to all holders of Common Stock entitling them to
acquire shares of Common Stock (or securities convertible into or exchangeable
for Common Stock) at less than the then current market price (as defined in the
supplemental indenture) of the Common Stock,

                   (d)   the distribution to all holders of Common Stock of
shares of any class other than Common Stock, or debt securities or assets
(excluding regular quarterly cash dividends or distributions) or rights or
warrants to purchase assets or securities of the Company (other than those
referred to above),

                   (e)   the issuance (with certain exceptions) of Common Stock
or securities convertible into, or exchangeable for, Common Stock at less than
the current market price of the Common Stock or

                   (f)   certain mergers, consolidations or sales of assets.

                   The conversion privilege and the conversion price in effect
immediately prior to such action shall be adjusted so that the Holder of the
Securities of a Series thereafter converted may receive the number of shares of
capital stock of the Company which he would have owned immediately following
such action if he had converted the Securities immediately prior to such
action.

                   The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.





                                       33

<PAGE>   39
                   If after an adjustment a Holder of the Securities of any
Series upon conversion of such Securities may receive shares of two or more
classes of capital stock of the Company, the Company shall determine the
allocation of the adjusted conversion price between the classes of capital
stock.  After such allocation, the conversion privilege and the conversion
price of each class of capital stock shall thereafter be subject to adjustment
on terms comparable to those applicable to Common Stock in this Article.

SECTION 7.7        Adjustment for Rights Issue.

                   If the Company (a) distributes any rights or warrants to all
holders of its Common Stock entitling them for a period expiring within 45 days
after the record date mentioned below to purchase shares of Common Stock or
securities convertible into or exchangeable for Common Stock at a price per
share (or having a conversion or exchange price per share) less than the
current market price (as defined in Section 7.9) per share on that record date,
or (b) issues shares of Common Stock for cash or securities convertible into or
exchangeable for Common Stock to any person at a price per share (or having a
conversion or exchange price per share) less than the current market price (as
defined in Section 7.9) per share on the date of issuance, the conversion price
shall be adjusted in accordance with the formula:

                                         N x P
                                         -----
                                          O  +  M
                              C' = C x ----------
                                    O  +  N

                                     where:

                   C' =   the adjusted conversion price.

                   C  =   the current conversion price.

                   O  =   the number of shares of Common Stock outstanding on
                          the record date or issuance date, as applicable.

                   N  =   the number of additional shares of Common Stock
                          offered or issuable upon conversion or exchange.

                   P  =   the offering, conversion or exchange price per share
                          of the additional shares.

                   M  =   the current market price per share of Common Stock on
                          the record date or issuance date as applicable.

                   Under clause (a) above, the adjustment shall become
effective immediately after the record date for the determination of
stockholders entitled to receive the rights or warrants.  Under





                                       34

<PAGE>   40
clause (b) above, the adjustment shall be made whenever any such securities are
issued and shall become effective on the date of such issuance.

SECTION 7.8        Adjustment for Other Distributions.

                   If the Company distributes to all holders of its Common
Stock any of its assets or debt securities or any rights or warrants to
purchase assets or securities of the Company, the conversion price shall be
adjusted in accordance with the formula:

                                          M - F
                                 C' = C X -----     
                                       M

                                     where:

                   C' =   the adjusted conversion price.

                   C  =   the current conversion price.

                   M  =   the current market price (as defined in Section 7.9)
                          per share of Common Stock on the record date
                          mentioned below.

                   F  =   the fair market value on the record date of the
                          assets, securities, rights or warrants applicable to
                          one share of Common Stock.  The Company shall
                          determine the fair market value.

                   The adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
distribution.

                   This Section does not apply to quarterly cash dividends or
cash distributions paid out of consolidated current or retained earnings as
shown on the books of the Company.  Also, this Section does not apply to rights
or warrants referred to in Section 7.7.

SECTION 7.9        Current Market Price.

                   In Sections 7.7 and 7.8 the current market price per share
of Common Stock on any date is the average of the last reported sales prices of
the Common Stock on the New York Stock Exchange--Composite Tape for thirty
consecutive trading days commencing 45 trading days before the date in
question.  In the absence of one or more such quotations, the Company shall
determine the current market price on the basis of such quotations as it
considers appropriate.

SECTION 7.10       When Adjustment May be Deferred.

                   No adjustment in the conversion price need be made unless
the adjustment would require a decrease or an increase (to





                                       35

<PAGE>   41
the extent permitted by Section 7.11) of at least 1% in the conversion price.
Any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment.

                   All calculations under this Article shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may be.

SECTION 7.11       When No Adjustment Required.

                   No upward adjustment in the conversion price will be made
except in the event of a reverse stock split.

                   No adjustment need be made for issuances of shares of Common
Stock (a) to officers, directors or employees of the Company pursuant to any
benefit plan now in existence or hereafter approved by the stockholders of the
Company or (b) pursuant to the Company's plan for reinvestment of dividends, as
now in effect and as the same may be amended in accordance with its terms.

                   No adjustment need be made in the conversion price of less
than 1% of such price, but the same will be carried forward and taken into
account in the computation of any subsequent adjustment.

                   No adjustment need be made for a change in the par value of
the Common Stock.

                   To the extent the Securities of a Series become convertible
into cash, no adjustment need be made thereafter as to the cash.  Interest will
not accrue on the cash.

SECTION 7.12       Notice of Adjustment.

                   Whenever the conversion price is adjusted, the Company shall
promptly mail to Holders a notice of the adjustment.  The Company shall file
with the Trustee a certificate from the Company's independent public
accountants briefly stating the facts requiring the adjustment and the manner
of computing it.  The certificate shall be conclusive evidence that the
adjustment is correct.

SECTION 7.13       Voluntary Reduction.

                   The Company from time to time may reduce the conversion
price by any amount for any period of time if the period is at least 20 days
and if the reduction is irrevocable during the period.

                   Whenever the conversion price is reduced, the Company shall
mail to Holders a notice of the reduction.  The Company shall mail the notice
at least 15 days before the date the reduced





                                       36

<PAGE>   42
conversion price takes effect.  The notice shall state the reduced conversion
price and the period it will be in effect.

                   A reduction of the conversion price does not change or
adjust the conversion price otherwise in effect for purposes of calculating the
adjustments required by Sections 7.6 through 7.8.

SECTION 7.14       Notice of Certain Transactions.

                   If:

                   (1)    the Company takes any action that would require an
         adjustment in the conversion price pursuant to Sections 7.6, 7.7 or
         7.8,

                   (2)    the Company takes any action that would require a
         supplemental indenture or Board Resolution pursuant to Section 7.15,
         or

                   (3)    there is a liquidation or dissolution of the Company,

the Company shall mail to Holders a notice stating the proposed record date for
a dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer, liquidation or
dissolution.  The Company shall mail the notice at least 15 days before such
date.  Failure to mail the notice or any defect in it shall not affect the
validity of the transaction.

SECTION 7.15       Reorganization of Company.

                   If the Company is a party to a transaction subject to
Section 5.1 or a merger which reclassifies or changes its outstanding Common
Stock, the person obligated to deliver securities, cash or other assets upon
conversion of the Securities of any Series shall enter into a supplemental
indenture.  If the issuer of securities deliverable upon conversion of such
Securities is an Affiliate of the surviving or transferee corporation, that
issuer shall join in the supplemental indenture.

                   The applicable supplemental indenture or Board Resolution
shall provide that the Holder of a Security of any Series may convert it into
the kind and amount of securities, cash or other assets which he would have
owned immediately after the consolidation, merger or transfer if he had
converted the Security immediately before the effective date of the
transaction.  The applicable supplemental indenture or Board Resolution shall
provide for adjustments which shall be as nearly equivalent as may be practical
to the adjustments provided for in this Article.  The successor company shall
mail to Holders a notice briefly describing the supplemental indenture.

                   If this Section applies, Section 7.6 does not apply.





                                       37

<PAGE>   43
SECTION 7.16       Company Determination Final.

                   Any determination that the Company or the Board of Directors
must make pursuant to Section 7.3, 7.6, 7.7, 7.8, 7.9 or 7.11 is conclusive.

SECTION 7.17       Trustee's Disclaimer.

                   The Trustee has no duty to determine when an adjustment
under this Article should be made, how it should be made or what it should be.
The Trustee has no duty to determine whether any provisions of a supplemental
indenture under Section 7.15 are correct.  The Trustee makes no representation
as to the validity or value of any securities or assets issued upon conversion
of the Securities of any Series.  The Trustee shall not be responsible for the
Company's failure to comply with this Article.  Each conversion agent other
than the Company shall have the same protection under this Section as the
Trustee.

                                  ARTICLE VIII

                                    TRUSTEE

SECTION 8.1        Duties of Trustee.

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

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

                          (i)        The Trustee need perform only those duties
                   that are specifically set forth in this Indenture and no
                   others.

                          (ii)       In the absence of bad faith on its part,
                   the Trustee may conclusively rely, as to the truth of the
                   statements and the correctness of the opinions expressed
                   therein, upon Officers' Certificates or Opinions of Counsel
                   furnished to the Trustee and conforming to the requirements
                   of this Indenture; however, in the case of any such
                   Officers' Certificates or Opinions of Counsel which by any
                   provisions hereof are specifically required to be furnished
                   to the Trustee, the Trustee shall examine such Officers'
                   Certificates and Opinions of Counsel to determine whether or
                   not they conform to the requirements of this Indenture.





                                       38

<PAGE>   44
                   (c)    The Trustee may not be relieved from liability for
         its own negligent action, its own negligent failure to act or its own
         willful misconduct, except that:

                          (i)        This paragraph does not limit the effect 
                   of paragraph (b) of this Section.

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

                          (iii)      The Trustee shall not be liable with
                   respect to any action taken, suffered or omitted to be taken
                   by it with respect to Securities of any Series in good faith
                   in accordance with the direction of the Holders of a
                   majority in principal amount of the outstanding Securities
                   of such Series relating to the time, method and place of
                   conducting any proceeding for any remedy available to the
                   Trustee, or exercising any trust or power conferred upon the
                   Trustee, under this Indenture with respect to the Securities
                   of such Series.

                   (d)    Every provision of this Indenture that in any way
         relates to the Trustee is subject to paragraph (a), (b) and (c) of
         this Section.

                   (e)    The Trustee may refuse to perform any duty or
         exercise any right or power unless it receives indemnity satisfactory
         to it against any loss, liability or expense.

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

                   (g)    No provision of this Indenture shall require the
         Trustee to risk its own funds or otherwise incur any financial
         liability in the performance of any of its duties, or in the exercise
         of any of its rights or powers, if it shall have reasonable grounds
         for believing that repayment of such funds or adequate indemnity
         against such risk is not reasonably assured to it.

                   (h)    The Paying Agent, the Registrar and any
         authenticating agent shall be entitled to the protections, immunities
         and standard of care as are set forth in paragraphs (a), (b) and (c)
         of this Section with respect to the Trustee.

SECTION 8.2        Rights of Trustee.

                   (a)    The Trustee may rely on and shall be protected in
acting or refraining from acting upon any





                                       39

<PAGE>   45
         document believed by it to be genuine and to have been signed or
         presented by the proper person.  The Trustee need not investigate any
         fact or matter stated in the document.

                   (b)    Before the Trustee acts or refrains from acting, it
         may require an Officers' Certificate or an Opinion of Counsel.  The
         Trustee shall not be liable for any action it takes or omits to take
         in good faith in reliance on such Officers' Certificate or Opinion of
         Counsel.

                   (c)    The Trustee may act through agents and shall not be
         responsible for the misconduct or negligence of any agent appointed
         with due care.  No Depository shall be deemed an agent of the Trustee
         and the Trustee shall not be responsible for any act or omission by
         any Depository.

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

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

                   (f)    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 of Securities 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.

SECTION 8.3        Individual Rights of Trustee.

                   The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities and may otherwise deal with the
Company or an Affiliate with the same rights it would have if it were not
Trustee.  Any Agent may do the same with like rights.  However, the Trustee is
subject to Sections 8.10 and 8.11.

SECTION 8.4        Trustee's Disclaimer.

                   The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its authentication.





                                       40

<PAGE>   46
SECTION 8.5        Notice of Defaults.

                   If a Default or Event of Default occurs and is continuing
with respect to the Securities of any Series and if it is known to a
Responsible Officer of the Trustee, the Trustee shall mail to each
Securityholder of the Securities of that Series and, if any Bearer Securities
are outstanding, publish on one occasion in an Authorized Newspaper, notice of
a Default or Event of Default within 90 days after it occurs or, if later,
after a Responsible Officer of the Trustee has knowledge of such Default or
Event of Default.  Except in the case of a Default or Event of Default in
payment on any Security of any Series, the Trustee may withhold the notice if
and so long as its corporate trust committee or a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Securityholders of that Series.

SECTION 8.6        Reports by Trustee to Holders.

                   Within 60 days after May 15 in each year, the Trustee shall
transmit by mail to all Securityholders, as their names and addresses appear on
the Security Register, and, if any Bearer Securities are outstanding, publish
in an Authorized Newspaper, a brief report dated as of such May 15, in
accordance with, and to the extent required under, TIA Section  313.

                   A copy of each report at the time of its mailing to
Securityholders of any Series shall be filed with the SEC and each stock
exchange on which the Securities of that Series are listed.  The Company shall
promptly notify the Trustee when Securities of any Series are listed on any
stock exchange.

SECTION 8.7        Compensation and Indemnity.

                   The Company shall pay to the Trustee from time to time
reasonable compensation for its services.  The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust.  The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it.  Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents and counsel.

                   The Company shall indemnify the Trustee (including the cost
of defending itself) against any loss, liability or expense incurred by it
except as set forth in the next paragraph in the performance of its duties
under this Indenture as Trustee or Agent.  The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity.  The Company shall
defend the claim and the Trustee shall cooperate in the defense.  The Trustee
may have separate counsel and the Company shall pay the reasonable fees and
expenses of such counsel.  The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.  This
indemnification shall apply to





                                       41

<PAGE>   47
officers, directors, employees, shareholders and agents of the Trustee.

                   The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee or by any officer,
director, employee, shareholder or agent of the Trustee through negligence or
bad faith.

                   To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities of any Series on all
money or property held or collected by the Trustee, except that held in trust
to pay principal and interest on particular Securities of that Series.

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

SECTION 8.8        Replacement of Trustee.

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

                   The Trustee may resign with respect to the Securities of one
or more Series by so notifying the Company.  The Holders of a majority in
principal amount of the Securities of any Series may remove the Trustee with
respect to that Series by so notifying the Trustee and the Company.  The
Company may remove the Trustee with respect to Securities of one or more Series
if:

                   (a)    the Trustee fails to comply with Section 8.10;

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

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

                   (d)    the Trustee becomes incapable of acting.

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





                                       42

<PAGE>   48
                   If a successor Trustee with respect to the Securities of any
one or more Series does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of at least 10% in principal amount of the Securities of the applicable Series
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.

                   If the Trustee with respect to the Securities of any one or
more Series fails to comply with Section 8.10, any Securityholder of the
applicable Series may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

                   A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company.  Immediately after
that, the retiring Trustee shall transfer all property held by it as Trustee to
the successor Trustee subject to the lien provided for in Section 8.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture.  A successor Trustee shall mail a notice of its
succession to each Securityholder of each such Series and if any Bearer
Securities are outstanding, publish such notice on one occasion in an
Authorized Newspaper.  Notwithstanding replacement of the Trustee pursuant to
this Section 8.8, the Company's obligations under Section 8.7 hereof shall
continue for the benefit of the retiring trustee with respect to expenses and
liabilities incurred by it prior to such replacement.

SECTION 8.9        Successor Trustee by Merger, etc.

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

SECTION 8.10       Eligibility; Disqualification.

                   This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section  310(a)(1), (2) and (5).  The Trustee shall always
have a combined capital and surplus of at least $__________ as set forth in its
most recent published annual report of condition.  The Trustee shall comply
with TIA Section  310(b).

SECTION 8.11       Preferential Collection of Claims Against Company.

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

                                   ARTICLE IX





                                       43

<PAGE>   49
                           SATISFACTION AND DISCHARGE

SECTION 9.1        Satisfaction and Discharge of Indenture.

                   This Indenture shall upon Company Order 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

                   (a)    either

                          (i)        all Securities theretofore authenticated
                   and delivered (other than Securities that have been
                   destroyed, lost or stolen and that have been replaced or
                   paid) have been delivered to the Trustee for cancellation;
                   or

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

                                     (1) have become due and payable, or

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

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

                                     (4) are deemed paid and discharged pursuant
                          to Section 9.3, as applicable;

                   and the Company, in the case of (1), (2) or (3) above, has
                   deposited or caused to be deposited with the Trustee as
                   trust funds in trust in an amount sufficient for the purpose
                   of paying and discharging the entire indebtedness on such
                   Securities not theretofore delivered to the Trustee for
                   cancellation, for principal and interest to the date of such
                   deposit (in the case of Securities which become due and
                   payable) or to the Stated Maturity or redemption date, as
                   the case may be;

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

                   (c)    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





                                       44

<PAGE>   50
         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 8.7,
and, if money shall have been deposited with the Trustee pursuant to clause (a)
of this Section or if money or obligations shall have been deposited with or
received by the Trustee pursuant to Section 9.3, the obligations of the Trustee
under Section 9.2 and Section 9.5 shall survive.

SECTION 9.2        Application of Trust Funds; Indemnification.

                   (a)    Subject to the provisions of Section 9.5, all money
         deposited with the Trustee pursuant to Section 9.1, all money and U.S.
         Government Obligations or Foreign Government Securities deposited with
         the Trustee pursuant to Section 9.3 or 9.4 and all money received by
         the Trustee in respect of U.S. Government Obligations or Foreign
         Government Securities deposited with the Trustee pursuant to Section
         9.3 or 9.4, shall be held in trust and applied by it, in accordance
         with the provisions of the Securities and this Indenture, to the
         payment, either directly or through any Paying Agent (including the
         Company acting as its own Paying Agent) as the Trustee may determine,
         to the persons entitled thereto, of the principal and interest for
         whose payment such money has been deposited with or received by the
         Trustee or to make mandatory sinking fund payments or analogous
         payments as contemplated by Sections 9.3 or 9.4.

                   (b)    The Company shall pay and shall indemnify the Trustee
         against any tax, fee or other charge imposed on or assessed against
         U.S. Government Obligations or Foreign Government Securities deposited
         pursuant to Sections 9.3 or 9.4 or the interest and principal received
         in respect of such obligations other than any payable by or on behalf
         of Holders.

                   (c)    The Trustee shall deliver or pay to the Company from
         time to time upon Company Request any U.S.  Government Obligations or
         Foreign Government Securities or money held by it as provided in
         Sections 9.3 or 9.4 which, in the opinion of a nationally recognized
         firm of independent certified public accountants expressed in a
         written certification thereof delivered to the Trustee, are then in
         excess of the amount thereof which then would have been required to be
         deposited for the purpose for which such Obligations or Foreign
         Government Securities or money were deposited or received.  This
         provision shall not authorize the sale by the Trustee of any U.S.
         Government Obligations or Foreign Government Securities held under
         this Indenture.

SECTION 9.3        Satisfaction, Discharge and Defeasance of Securities of any 
                   Series.





                                       45

<PAGE>   51
                   Unless this Section 9.3 is otherwise specified, pursuant to
Section 2.2.21, to be inapplicable to Securities of any Series, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
outstanding Securities of any such Series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such outstanding Securities of any such Series,
shall no longer be in effect (and the Trustee, at the expense of the Company,
shall, at Company Request, execute proper instruments acknowledging the same),
except as to:

                   (a)    the rights of Holders of Securities of such Series to
         receive, from the trust funds described in subparagraph (d) hereof,
         (i) payment of the principal of and each installment of principal of
         or interest on the outstanding Securities of such Series on the Stated
         Maturity of such principal or installment of principal or interest and
         (ii) the benefit of any mandatory sinking fund payments applicable to
         the Securities of such Series on the day on which such payments are
         due and payable in accordance with the terms of this Indenture and the
         Securities of such Series;

                   (b)    the Company's obligations with respect to such
         Securities of such Series under Sections 2.4, 2.7 and 2.8; and

                   (c)    the rights, powers, trust and immunities of the
         Trustee hereunder and the duties of the Trustee under Section 9.2 and
         the duty of the Trustee to authenticate Securities of such Series
         issued on registration of transfer or exchange;

provided that, the following conditions shall have been satisfied:

                   (d)    the Company shall have deposited or caused to be
         deposited irrevocably with the Trustee as trust funds in trust for the
         purpose of making the following payments, specifically pledged as
         security for and dedicated solely to the benefit of the Holders of
         such Securities (i) in the case of Securities of such Series
         denominated in Dollars, cash in Dollars (or such other money or
         currencies as shall then be legal tender in the United States) and/or
         U.S. Government Obligations, or (ii) in the case of Securities of such
         Series denominated in a Foreign Currency (other than a composite
         currency), money and/or Foreign Government Securities in the same
         Foreign Currency, which through the payment of interest and principal
         in respect thereof, in accordance with their terms, will provide (and
         without reinvestment and assuming no tax liability will be imposed on
         such Trustee), not later than one day before the due date of any
         payment of money, an amount in cash, sufficient, in the opinion of a
         nationally recognized firm of independent public accountants expressed
         in a written certification thereof delivered to the Trustee, to pay
         and discharge each installment of principal, (including mandatory
         sinking fund or analogous payments) of and any interest on all





                                       46

<PAGE>   52
         the Securities of such Series on the dates such installments of
         interest or principal are due;

                   (e)    such deposit will not result in a breach or violation
         of, or constitute a default under, this Indenture or any other
         agreement or instrument to which the Company is a party or by which it
         is bound;

                   (f)    such provision would not cause any outstanding
         Securities of such Series then listed on the New York Stock Exchange
         or other securities exchange to be delisted as a result thereof;

                   (g)    no Default or Event of Default with respect to the
         Securities of such Series shall have occurred and be continuing on the
         date of such deposit or during the period ending on the 91st day after
         such date;

                   (h)    the Company shall have delivered to the Trustee an
         Opinion of Counsel to the effect that (i) the Company has received
         from, or there has been published by, the Internal Revenue Service a
         ruling, or (ii) since the date of execution of this Indenture, there
         has been a change in the applicable Federal income tax law, in either
         case to the effect that, and based thereon such opinion shall confirm
         that, the Holders of the Securities of such Series will not recognize
         income, gain or loss for Federal income tax purposes as a result of
         such deposits, defeasance and discharge and will be subject to Federal
         income tax on the same amount and in the same manner and at the same
         times as would have been the case if such deposit, defeasance and
         discharge had not occurred;

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

                   (j)    the Company shall have delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that all
         conditions precedent provided for relating to the defeasance
         contemplated by this Section have been complied with.

SECTION 9.4        Defeasance of Certain Obligations.

                   Unless this Section 9.4 is otherwise specified pursuant to
Section 2.2.21 to be inapplicable to Securities of any Series, on and after the
91st day after the date of the deposit referred to in subparagraph (a) hereof,
the Company may omit to comply with any term, provision or condition set forth
under Sections 4.2 (except as to corporate existence), 4.3, 4.4, 4.5, 4.6 and
5.1 (and the





                                       47

<PAGE>   53
failure to comply with any such provisions shall not constitute a Default or
Event of Default under Section 6.1) and the occurrence of any event described
in clause (e) of Section 6.1 shall not constitute a Default or Event of Default
hereunder, with respect to the Securities of such Series, provided that the
following conditions shall have been satisfied:

                   (a)    With reference to this Section 9.4, the Company has
         deposited or caused to be irrevocably deposited (except as provided in
         Section 9.3) with the Trustee as trust funds in trust, specifically
         pledged as security for, and dedicated solely to, the benefit of the
         Holders of such Securities (i) in the case of Securities of such
         Series denominated in Dollars, cash in Dollars (or such other money or
         currencies as shall then be legal tender in the United States) and/or
         U.S. Government Obligations, or (ii) in the case of Securities of such
         Series denominated in a Foreign Currency (other than a composite
         currency), money and/or Foreign Government Securities in the same
         Foreign Currency, which through the payment of interest and principal
         in respect thereof, in accordance with their terms, will provide (and
         without reinvestment and assuming no tax liability will be imposed on
         such Trustee), not later than one day before the due date of any
         payment of money, an amount in cash, sufficient, in the opinion of a
         nationally recognized firm of independent certified public accountants
         expressed in a written certification thereof delivered to the Trustee,
         to pay and discharge each installment of principal (including
         mandatory sinking fund or analogous payments) and premium, if any, of
         and any interest on all the Securities of such Series on the dates
         such installments of interest or principal are due;

                   (b)    Such deposit will not result in a breach or violation
         of, or constitute a default under, this Indenture or any other
         agreement or instrument to which the Company is a party or by which it
         is bound;

                   (c)    No Default or Event of Default with respect to the
         Securities of such Series shall have occurred and be continuing on the
         date of such deposit or during the period ending on the 91st day after
         such date;

                   (d)    the Company shall have delivered to the Trustee an
         Opinion of Counsel confirming that Holders of the Securities of such
         Series will not recognize income, gain or loss for federal income tax
         purposes as a result of such deposit and defeasance of certain
         obligations and will be subject to federal income tax on the same
         amount, in the same manner and at the same times as would have been
         the case if such deposit and defeasance had not occurred;

                   (e)    the Company shall have delivered to the Trustee an
         Officers' Certificate stating the deposit was not made by the Company
         with the intent of preferring the Holders





                                       48

<PAGE>   54
         of the Securities of such Series over any other creditors of the
         Company or with the intent of defeating, hindering, delaying or
         defrauding any other creditors of the Company; and

                   (f)    The Company shall have delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that all
         conditions precedent herein provided for relating to the defeasance
         contemplated by this Section have been complied with.

SECTION 9.5        Repayment to Company.

                   The Trustee and the Paying Agent shall pay to the Company
upon request any money held by them for the payment of principal and interest
that remains unclaimed for two years.  After that, Securityholders entitled to
the money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.

                                   ARTICLE X

                             AMENDMENTS AND WAIVERS

SECTION 10.1       Without Consent of Holders.

                   The Company and the Trustee may amend or supplement this
Indenture or the Securities of one or more Series without the consent of any
Securityholder:

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

                   (b)    to comply with Article V;

                   (c)    to provide for uncertificated Securities in addition
         to or in place of certificated Securities; provided that such
         amendment or supplement does not adversely affect the rights of any
         Securityholders;

                   (d)    to make any change that does not adversely affect the
         rights of any Securityholder;

                   (e)    to provide for the issuance of and establish the form
         and terms and conditions of Securities of any Series as permitted by
         this Indenture;

                   (f)    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; or





                                       49

<PAGE>   55
                   (g)    to comply with requirements of the SEC in order to
         effect or maintain the qualification of this Indenture under the TIA.

SECTION 10.2       With Consent of Holders.

                   The Company and the Trustee may enter into a supplemental
indenture with the written consent of the Holders of at least a majority in
aggregate principal amount of the outstanding Securities of each Series
affected by such supplemental indenture, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Securityholders of each such Series, except as provided in
Section 6.13, the Holders of at least a majority in aggregate principal amount
of the outstanding Securities of each Series affected by such waiver by notice
to the Trustee may waive compliance by the Company with any provision of this
Indenture or the Securities with respect to such Series.

                   It shall not be necessary for the consent of the Holders of
Securities under this Section 10.2 to approve the particular form of any
proposed supplemental indenture or waiver, but it shall be sufficient if such
consent approves the substance thereof.  After a supplemental indenture or
waiver under this section becomes effective, the Company shall mail to the
Holders of Securities affected thereby and, if any Bearer Securities affected
thereby are outstanding, publish on one occasion in an Authorized Newspaper, a
notice briefly describing the supplemental indenture or waiver.  Any failure by
the Company to mail or publish such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture or waiver.

SECTION 10.3       Limitations.

                   Without the consent of each Securityholder affected, an
amendment or waiver may not:

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

                   (b)    reduce the rate of or extend the time for payment of
         interest (including default interest) on any Security; or

                   (c)    reduce the principal or premium, if any, or change
         the Stated Maturity of any Security or reduce the amount of, or
         postpone the date fixed for, the payment of any sinking fund or
         analogous obligation; or

                   (d)    waive a Default or Event of Default in the
         payment of the principal of or interest on any Security (except a
         recission of acceleration of the Securities of any Series by the
         Holders of at least a majority in aggregate principal amount of the
         then outstanding Securities of such





                                       50

<PAGE>   56
         Series and a waiver of the payment default that resulted from such
         acceleration); or

                   (e)    make the Security payable in currency other than that
         stated in the Security; or

                   (f)    make any change in Sections 6.8, 6.13, 10.3 (this
         sentence), 11.15 or 11.16; or

                   (g)    waive a redemption payment with respect to any
         Security or change any of the provisions with respect to the
         redemption of any Securities; or

                   (h)    make any change that adversely affects the right to
         convert or the conversion price of the Securities of any Series.

SECTION 10.4       Compliance with Trust Indenture Act.

                   Every amendment to this Indenture or the Securities of one
or more Series shall be set forth in a supplemental indenture hereto that
complies with the TIA as then in effect.

SECTION 10.5       Revocation and Effect of Consents.

                   Until an amendment or waiver becomes effective, a consent to
it by a Holder of a Security is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security, even if notation of the consent
is not made on any Security.  However, any such Holder or subsequent Holder may
revoke the consent as to his Security or portion of a Security if the Trustee
receives the notice of revocation before the date the amendment or waiver
becomes effective.

                   Any amendment or waiver once effective shall bind every
Securityholder of each Series affected by such amendment or waiver unless it is
of the type described in any of clauses (a) through (g) of Section 10.3.  In
that case, the amendment or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.

SECTION 10.6       Notation on or Exchange of Securities.

                   The Trustee may place an appropriate notation about an
amendment or waiver on any Security of any Series thereafter authenticated.
The Company in exchange for Securities of that Series may issue and the Trustee
shall authenticate upon request new Securities of that Series that reflect the
amendment or waiver.

SECTION 10.7       Trustee Protected.

                   In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the





                                       51

<PAGE>   57
modifications thereby of the trusts created by this Indenture, the Trustee
shall be entitled to receive, and (subject to Section 8.1) 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 shall sign all supplemental indentures, except that the Trustee need
not sign any supplemental indenture that adversely affects its rights.





                                       52

<PAGE>   58
                                   ARTICLE XI

                                 MISCELLANEOUS

SECTION 11.1       Trust Indenture Act Controls.

                   If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required or deemed to be included in
this Indenture by the TIA, such required or deemed provision shall control.

SECTION 11.2       Notices.

                   Any notice or communication by the Company or the Trustee to
the other is duly given if in writing and delivered in person or mailed by
first-class mail:

                   if to the Company:

                          Beverly Enterprises, Inc.
                          5111 Rogers Avenue, Suite 40-A
                          Fort Smith, Arkansas 72919-0155
                          Attention: Robert W. Pommerville, 
                                     Executive Vice President,
                                     General Counsel and Secretary

                   if to the Trustee:

                          [Name of Trustee]
                          [address]

                          Attention: ____________, [title]

                   The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.

                   Any notice or communication to a Securityholder shall be
mailed by first-class mail to his address shown on the register kept by the
Registrar and, if any Bearer Securities are outstanding, published in an
Authorized Newspaper.  Failure to mail a notice or communication to a
Securityholder of any Series or any defect in it shall not affect its
sufficiency with respect to other Securityholders of that or any other Series.

                   If a notice or communication is mailed or published in the
manner provided above, within the time prescribed, it is duly given, whether or
not the Securityholder receives it.

                   If the Company mails a notice or communication to
Securityholders, it shall mail a copy to the Trustee and each Agent at the same
time.





                                       53

<PAGE>   59
SECTION 11.3       Communication by Holders with Other Holders.

                   Securityholders of any Series may communicate pursuant to
TIA Section  312(b) with other Securityholders of that Series or any other
Series with respect to their rights under this Indenture or the Securities of
that Series or all Series.  The Company, the Trustee, the Registrar and anyone
else shall have the protection of TIA Section  312(c).

SECTION 11.4       Certificate and Opinion as to Conditions Precedent.

                   Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company shall furnish to
the Trustee:

                   (a)    an Officers' Certificate stating that, in the opinion
         of the signers, all conditions precedent, if any, provided for in this
         Indenture relating to the proposed action have been complied with; and

                   (b)    an Opinion of Counsel stating that, in the opinion of
         such counsel, all such conditions precedent have been complied with.

SECTION 11.5       Statements Required in Certificate or Opinion.

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

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

                   (b)    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;

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

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





                                       54

<PAGE>   60
SECTION 11.6       Rules by Trustee and Agents.

                   The Trustee may make reasonable rules for action by or a
meeting of Securityholders of one or more Series.  Any Agent may make
reasonable rules and set reasonable requirements for its functions.

SECTION 11.7       Legal Holidays.

                   Unless otherwise provided by Board Resolution or
supplemental indenture hereto for a particular Series, a "Legal Holiday" is a
Saturday, a Sunday, or a day on which banking institutions are not required to
be open.  If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.

SECTION 11.8       No Recourse Against Others.

                   A director, officer, employee or stockholder, as such, of
the Company shall not have any liability for any obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation.  Each Securityholder by
accepting a Security waives and releases all such liability.  The waiver and
release are part of the consideration for the issue of the Securities.

SECTION 11.9       Counterparts.

                   This Indenture may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.

SECTION 11.10      Governing Laws.

                   THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS
INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISION
THEREOF.

SECTION 11.11      No Adverse Interpretation of Other Agreements.

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

SECTION 11.12      Successors.

         All agreements of the Company in this Indenture and the Securities
shall bind its successor.  All agreements of the Trustee in this Indenture
shall bind its successor.





                                       55

<PAGE>   61
SECTION 11.13      Severability.

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

SECTION 11.14      Table of Contents, Headings, Etc.

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

SECTION 11.15      Securities in a Foreign Currency or in ECU.

                   Unless otherwise specified in an Officers' Certificate
delivered pursuant to Section 2.2 of this Indenture with respect to a
particular Series of Securities, whenever for purposes of this Indenture any
action may be taken by the Holders of a specified percentage in aggregate
principal amount of Securities of all Series or all Series affected by a
particular action at the time outstanding and, at such time, there are
outstanding Securities of any Series which are denominated in a coin or
currency other than Dollars (including ECUs), then the principal amount of
Securities of such Series which shall be deemed to be outstanding for the
purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount at the Market Exchange Rate at such time.  For
purposes of this Section 11.15, "Market Exchange Rate" shall mean the noon
Dollar buying rate in New York City for cable transfers of that currency as
published by the Federal Reserve Bank of New York; provided, however, in the
case of ECUs, Market Exchange Rate shall mean the rate of exchange determined
by the Commission of the European Union (or any successor thereto) as published
in the Official Journal of the European Union (such publication or any
successor publication, the "Journal").  If such Market Exchange Rate is not
available for any reason with respect to such currency, the Trustee shall use,
in its sole discretion and without liability on its part, such quotation of the
Federal Reserve Bank of New York or, in the case of ECUs, the rate of exchange
as published in the Journal, as of the most recent available date, or
quotations or, in the case of ECUs, rates of exchange from one or more major
banks in The City of New York or in the country of issue of the currency in
question or, in the case of ECUs, in Luxembourg or such other quotations or, in
the case of ECUs, rates of exchange as the Trustee, upon consultation with the
Company, shall deem appropriate.  The provisions of this paragraph shall apply
in determining the equivalent principal amount in respect of Securities of a
Series denominated in currency other than Dollars in connection with any action
taken by Holders of Securities pursuant to the terms of this Indenture.

                   All decisions and determinations of the Trustee regarding
the Market Exchange Rate or any alternative determination





                                       56

<PAGE>   62
provided for in the preceding paragraph shall be in its sole discretion and
shall, in the absence of manifest error, be conclusive to the extent permitted
by law for all purposes and irrevocably binding upon the Company and all
Holders.

SECTION 11.16      Judgment Currency.

                   The Company agrees, to the fullest extent that it may
effectively do so under applicable law, that (a) if for the purpose of
obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of or interest or other amount on the Securities of
any Series (the "Required Currency") into a currency in which a judgment will
be rendered (the "Judgment Currency"), the rate of exchange used shall be the
rate at which in accordance with normal banking procedures the Trustee could
purchase in The City of New York the Required Currency with the Judgment
Currency on the day on which final unappealable judgment is entered, unless
such day is not a New York Banking Day, then, to the extent permitted by
applicable law, the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the New
York Banking Day preceding the day on which final unappealable judgment is
entered and (b) its obligations under this Indenture to take payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, any
recovery pursuant to any judgment (whether or not entered in accordance with
subsection (a)), in any currency other than the Required Currency, except to
the extent that such tender or recovery shall result in the actual receipt, by
the payee, of the full amount of the Required Currency expressed to be payable
in respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable, and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture.  For purposes of the foregoing, "New York Banking Day" means
any day except a Saturday, Sunday or a legal holiday in The City of New York on
which banking institutions are authorized or required by law, regulation or
executive order to close.

                                  ARTICLE XII

                                 SINKING FUNDS

SECTION 12.1       Applicability of Article.

                   The provisions of this Article shall be applicable to any
sinking fund for the retirement of the Securities of a Series, except as
otherwise permitted or required by any form of Security of such Series issued
pursuant to this Indenture.

                   The minimum amount of any sinking fund payment provided for
by the terms of the Securities of any Series is herein referred to as a
"mandatory sinking fund payment" and any other amount





                                       57

<PAGE>   63
provided for by the terms of Securities of such 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 12.2.  Each sinking fund payment shall be
applied to the redemption of Securities of any Series as provided for by the
terms of the Securities of such Series.

SECTION 12.2       Satisfaction of Sinking Fund Payments with Securities.

                   The Company may, in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such Series to be made
pursuant to the terms of such Securities (1) deliver outstanding Securities of
such Series to which such sinking fund payment is applicable (other than any of
such Securities previously called for mandatory sinking fund redemption) and
(2) apply as credit Securities of such Series to which such sinking fund
payment is applicable and which have been redeemed either at the election of
the Company pursuant to the terms of such Series of Securities (except pursuant
to any mandatory sinking fund) or through the application of permitted optional
sinking fund payments or other optional redemptions pursuant to the terms of
such Securities, provided that such Securities have not been previously so
credited.  Such Securities shall be received by the Trustee, together with an
Officers' Certificate with respect thereto, not later than 15 days prior to the
date on which the Trustee begins the process of selecting Securities for
redemption, and shall be credited for such purpose by the Trustee at the 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.
If as a result of the delivery or credit of Securities in lieu of cash payments
pursuant to this Section 12.2, the principal amount of Securities of such
Series to be redeemed in order to exhaust the aforesaid cash payment shall be
less than $100,000, the Trustee need not call Securities of such Series for
redemption, except upon receipt of a Company Order that such action be taken,
and such cash payment shall be held by the Trustee or a Paying Agent and
applied to the next succeeding sinking fund payment, provided, however, that
the Trustee or such Paying Agent shall from time to time upon receipt of a
Company Order pay over and deliver to the Company any cash payment so being
held by the Trustee or such Paying Agent upon delivery by the Company to the
Trustee of Securities of that Series purchased by the Company having an unpaid
principal amount equal to the cash payment required to be released to the
Company.

SECTION 12.3       Redemption of Securities for Sinking Fund.

                   Not less than 60 days (unless otherwise indicated in the
Board Resolution or Officers' Certificate or supplemental indenture in respect
of a particular Series of Securities) 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 mandatory
sinking fund payment for that





                                       58

<PAGE>   64
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 of Securities of that Series
pursuant to Section 12.2, and the optional amount, if any, to be added in cash
to the next ensuing mandatory sinking fund payment, and the Company shall
thereupon be obligated to pay the amount therein specified.  Not less than 45
days (unless otherwise indicated in the Board Resolution or Officers'
Certificate or supplemental indenture in respect of a particular Series of
Securities) before each such sinking fund payment date the Trustee shall select
the Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 3.2 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 3.3.  Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
3.4, 3.5 and 3.6.

                   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.


                                        BEVERLY ENTERPRISES, INC.
                                        
                                        
                                        
                 (SEAL)                 By:
                                            ----------------------------------
                                        Name:
                 Attest:                Title:
                                        
                                        
                                        
                                        
                                        
                                        [NAME OF TRUSTEE]
                                        
                                        
                                        
                                        By:
                                            ----------------------------------
                                        Name:
                                        Title:
                                        




                                       59

<PAGE>   65
                           BEVERLY ENTERPRISES, INC.

         Reconciliation and tie between Trust Indenture Act of 1939 and
                 Indenture, dated as of ________________, 1996

<TABLE>
<S>                                                                    <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . .      8.10
           (a)(2) . . . . . . . . . . . . . . . . . . . . . . . .      8.10
           (a)(3) . . . . . . . . . . . . . . . . . . . . . . . .      Not Applicable
           (a)(4) . . . . . . . . . . . . . . . . . . . . . . . .      Not Applicable
           (a)(5) . . . . . . . . . . . . . . . . . . . . . . . .      8.10
           (b)    . . . . . . . . . . . . . . . . . . . . . . . .      8.10
                                                                 
Section 311(a)    . . . . . . . . . . . . . . . . . . . . . . . .      8.11
           (b)    . . . . . . . . . . . . . . . . . . . . . . . .      8.11
           (c)    . . . . . . . . . . . . . . . . . . . . . . . .      Not Applicable
                                                                 
Section 312(a)    . . . . . . . . . . . . . . . . . . . . . . . .      2.6
           (b)    . . . . . . . . . . . . . . . . . . . . . . . .      11.3
           (c)    . . . . . . . . . . . . . . . . . . . . . . . .      11.3
                                                                 
Section 313(a)    . . . . . . . . . . . . . . . . . . . . . . . .      8.6
           (b)(1) . . . . . . . . . . . . . . . . . . . . . . . .      8.6
           (b)(2) . . . . . . . . . . . . . . . . . . . . . . . .      8.6
           (c)(1) . . . . . . . . . . . . . . . . . . . . . . . .      8.6
           (d)    . . . . . . . . . . . . . . . . . . . . . . . .      8.6
                                                                 
Section 314(a)    . . . . . . . . . . . . . . . . . . . . . . . .      4.2, 11.5
           (b)    . . . . . . . . . . . . . . . . . . . . . . . .      Not Applicable
           (c)(1) . . . . . . . . . . . . . . . . . . . . . . . .      11.4
           (c)(2) . . . . . . . . . . . . . . . . . . . . . . . .      11.4
           (c)(3) . . . . . . . . . . . . . . . . . . . . . . . .      Not Applicable
           (d)    . . . . . . . . . . . . . . . . . . . . . . . .      Not Applicable
           (e)    . . . . . . . . . . . . . . . . . . . . . . . .      11.5
           (f)    . . . . . . . . . . . . . . . . . . . . . . . .      Not Applicable
                                                                 
Section 315(a)    . . . . . . . . . . . . . . . . . . . . . . . .      8.1
           (b)    . . . . . . . . . . . . . . . . . . . . . . . .      8.5
           (c)    . . . . . . . . . . . . . . . . . . . . . . . .      8.1
           (d)    . . . . . . . . . . . . . . . . . . . . . . . .      8.1
           (e)    . . . . . . . . . . . . . . . . . . . . . . . .      6.14
                                                                 
Section 316(a)        . . . . . . . . . . . . . . . . . . . . . .      2.10
           (a)(1)(A)  . . . . . . . . . . . . . . . . . . . . . .      6.2
                      . . . . . . . . . . . . . . . . . . . . . .      6.12
           (a)(1)(B)  . . . . . . . . . . . . . . . . . . . . . .      6.13
           (b)        . . . . . . . . . . . . . . . . . . . . . .      6.8
</TABLE>                                                         
                                                                 
                                                                 
                                                                 
                                                                 
                                                                 

<PAGE>   66
<TABLE>                                                          
<S>                                                                    <C>
Section  317(a)(1)  . . . . . . . . . . . . . . . . . . . . . . .      6.3
            (a)(2)  . . . . . . . . . . . . . . . . . . . . . . .      6.4
            (b)     . . . . . . . . . . . . . . . . . . . . . . .      2.5
                                                                 
Section  318(a)     . . . . . . . . . . . . . . . . . . . . . . .      11.1
</TABLE>                                                         


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






