Document:

<PAGE>   1
                                                                     EXHIBIT 4.1

                          FOURTH SUPPLEMENTAL INDENTURE

         FOURTH SUPPLEMENTAL INDENTURE, dated as of August 15, 2000 (this
"Fourth Supplemental Indenture"), among AMB PROPERTY, L.P., a Delaware limited
partnership (the "Operating Partnership"), AMB PROPERTY CORPORATION (the "Parent
Guarantor") and STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., as
Trustee hereunder (the "Trustee").

                              W I T N E S S E T H:

         WHEREAS, the Operating Partnership, the Parent Guarantor and the
Trustee executed and delivered an Indenture, dated as of June 30, 1998, as
supplemented by the First Supplemental Indenture, the Second Supplemental
Indenture and the Third Supplemental Indenture, each dated as of June 30, 1998
(as further supplemented hereby, the "Indenture"), to provide for the issuance
by the Operating Partnership of notes evidencing its unsecured indebtedness;

         WHEREAS, pursuant to Board Resolution, the Operating Partnership has
authorized the issuance of up to $400,000,000 of its Medium Term Notes due nine
months or more from the date of issuance (the "Medium Term Notes");

         WHEREAS, the Operating Partnership desires to establish the terms of
the Medium Term Notes in accordance with Section 301 of the Indenture and to
establish the form of the Medium Term Notes in accordance with Section 201 of
the Indenture.

                                    ARTICLE 1
                                      TERMS

         SECTION 101. TERMS OF SECURITIES. There is hereby established and
authorized for issuance by the Operating Partnership a series of Securities (as
defined in the Indenture), the terms of which shall be as follows:

                  (a) The Securities of the series shall be designated
         "Medium-Term Notes" (the "Notes").

                  (b) The aggregate principal amount of the Notes that may be
         authenticated and delivered under the Indenture from time to time
         (except for Notes authenticated and delivered upon registration of
         transfer of, or in exchange for, or in lieu of, other Notes pursuant to
         Sections 304, 305, 306, 906, or 1107 of the Indenture) shall be up to
         $400,000,000 or the equivalent thereof in other currencies, which
         amount may be increased from time to time by a Board Resolution or a
         supplemental indenture to the Indenture or an Officers' Certificate, in
         either case, pursuant to authority granted under a Board Resolution,
         and in accordance with Section 301 of the Indenture, and which amount
         is subject to decrease by the amount of any other debt securities
         issued after the date hereof pursuant to the Registration Statement No.
         333-68283, filed by the Operating Partnership and the Parent Guarantor
         with the Securities and Exchange Commission.

                  (c) Each Note shall mature on a date which shall be nine
         months or more from the date of issue of such Note and shall be
         specified by an officer of the Parent Guarantor, as general partner of
         the Operating Partnership, such officer to the Trustee in writing or by
         telephone

<PAGE>   2

         (telephonic instructions to be promptly confirmed in writing) and
         specified in the applicable pricing supplement.

                  (d) The interest rate or rates or the method of determination
         thereof, if any, the date or dates or the method of determination
         thereof from which such interest shall accrue, the date or dates on
         which such interest shall be payable, and the regular record date for
         the interest payable on any interest payment date, in each case for a
         particular Note, shall each be as specified by an officer of the Parent
         Guarantor, as general partner of the Operating Partnership, to the
         Trustee in writing or by telephone (telephonic instructions to be
         promptly confirmed in writing); provided, however, the interest rate or
         rates shall in no event be higher than the maximum rate permitted by
         New York law, as the same may be modified by United States law of
         general application.

                  (e) Unless stated to the contrary in the applicable pricing
         supplement, the payment of principal (and premium, if any) and interest
         on, a Note on any day, if the Holder of this Note is Depository Trust
         Company, a New York Corporation (or its nominee or other depository, a
         "Depository"), will be made in accordance with any applicable
         provisions of such written agreement between the Operating Partnership,
         the Trustee and the Depository (or its nominee) as may be in effect
         from time to time. Otherwise payment of principal (and premium, if any)
         and interest on the Notes shall be payable and Notes may be surrendered
         for the registration of transfer or exchange shall be at the office of
         the Trustee's affiliate, State Street Bank and Trust Company, at 61
         Broadway, 15th Floor, New York, New York 10006; provided, however, that
         at the option of the Operating Partnership, interest may be paid by
         check mailed to the address of the person entitled thereto as such
         address shall appear in the Operating Partnership's security register
         or by wire transfer to an account maintained by the payee located in
         the United States. The place where notices or demands to or upon the
         Operating Partnership in respect of the Notes and the Indenture may be
         served shall be the Corporate Trust Office of the Trustee at 633 West
         Fifth Street, 12th Floor, Los Angeles, California 90071.

                  (f) To receive payment of a U.S. dollar denominated Note upon
         redemption, if applicable, or at maturity, a Holder must make
         presentation and surrender of such Note on or before the Redemption
         Date or Maturity Date, if any, as specified on the face of any Note and
         in the applicable pricing supplement. To receive payment of a Note
         denominated in a foreign currency upon redemption or at maturity, a
         Holder must make presentation and surrender of such Note not less than
         two Business Days (as defined in the Notes) prior to the Redemption
         Date or Maturity Date, if any, as specified on the face of any Note and
         in the applicable pricing supplement. Upon presentation and surrender
         of a Note denominated in a foreign currency at any time after the date
         two Business Days prior to the Redemption Date or Maturity Date, if
         any, as specified on the face of any Note and in the applicable pricing
         supplement, the Operating Partnership will pay the principal amount
         (and premium, if any) of such Note, and any interest due upon
         redemption or at maturity (unless the Redemption Date or Maturity Date
         is an Interest Payment Date, as specified on the face of the Note and
         in the applicable pricing supplement), two Business Days after such
         presentation and surrender.

                  (g) Unless stated to the contrary on the face of any Note and
         in the applicable pricing supplement, a Note will not be subject to
         redemption prior to its Maturity Date. If stated on the face of a Note
         and in the applicable pricing supplement, such Note will be redeemable
         in whole or in part at the option of the Operating Partnership, in
         accordance with Article Eleven of the Indenture and the terms set forth
         in such Note and the applicable pricing supplement.

                                       2
<PAGE>   3

                  (h) Unless stated to the contrary on the face of any Note and
         in the applicable pricing supplement, such Note will not be subject to
         repayment prior to its Maturity Date. If stated on the face of a Note
         and in the applicable pricing supplement, such Note will be repayable
         by the Operating Partnership in whole or in part at the option of the
         Holder in accordance with the terms set forth in such Note and the
         applicable pricing supplement.

                  (i) Unless stated to the contrary on the face of a Note and in
         the applicable pricing supplement, Notes shall be issuable in
         denominations of (i) $1,000 and any amount in excess thereof which is
         an integral multiple of $1,000, if the Notes are denominated in U.S.
         Dollars, and (ii) if the Notes are denominated in a currency other than
         U.S. Dollars, the Notes will be issuable in a minimum denomination
         equivalent to U.S. $1,000, rounded to an integral multiple of 1,000
         units of the currency in which the Notes are denominated, and in any
         larger amount in integral multiples of 1,000 units of that currency.
         The principal amount of any particular Note shall be determined by an
         officer of the Parent Guarantor, as general partner of the Operating
         Partnership, and specified to the Trustee in writing or by telephone
         (telephonic instructions to be promptly confirmed in writing).

                  (j) Initially, unless otherwise stated to the contrary on the
         face of any Note and in the applicable pricing supplement, the Trustee
         shall be the registrar, transfer agent, authenticating agent, exchange
         rate agent, calculation agent and paying agent for the Notes. The
         Operating Partnership may from time to time name other or additional
         registrars, paying agents, authenticating agents, exchange rate agents,
         calculation agents or transfer agents..

                  (k) Unless stated to the contrary on the face of a Note and in
         the applicable pricing supplement, such Note shall be issuable only in
         registered form without coupons in book-entry form, represented by one
         or more global notes recorded in the book-entry system maintained by
         The Depository Trust Company. If specified on the face thereof, Notes
         may be issued in certificated form issued to, and registered in the
         name of, the beneficial owner or its nominee.

                  (l) The Notes are not convertible into any other security of
         the Operating Partnership or the Parent Guarantor. The Notes shall
         constitute senior unsecured and unsubordinated obligations of the
         Operating Partnership and will rank equally with all other unsecured
         and unsubordinated indebtedness of the Operating Partnership from time
         to time outstanding.

                  (m) There are no restrictive covenants pertaining to the Notes
         other than those contained in the Indenture. Unless stated to the
         contrary on the face of any Note and in the applicable pricing
         supplement, the holders of the Notes shall have no special rights in
         addition to those provided in the Indenture upon the occurrence of any
         particular events. The Notes shall have no additional Events of Default
         in addition to the Events of Default set forth in Article Five of the
         Indenture.

                  (n) The Notes will be unconditionally guaranteed on an
         unsecured basis by the Parent Guarantor and, if required by Section
         1013 of the Indenture, the Subsidiary Guarantors.

         SECTION 102. FORM OF NOTES. The Notes shall be in the form of, and
shall have the terms set forth in, the specimens thereof attached hereto as
Exhibits A and B in fully registered fixed rate and floating rate form,
respectively, with applicable blank terms completed and additional terms added
to reflect settlement and other specific information, which terms shall be
specified by an officer of the Parent Guarantor, as general partner of the
Operating Partnership to the Trustee in writing or by

                                       3
<PAGE>   4

telephone (telephonic instructions to be promptly confirmed in writing) and
specified in the applicable pricing supplement.

         SECTION 103. FORM OF SUBSIDIARY GUARANTEE. The form of the Subsidiary
Guarantee which shall be executed if required pursuant to Section 1013 of the
Indenture is attached hereto as Exhibit C.

         SECTION 104. FORM OF GUARANTEES. There are hereby authorized for
issuance by the Parent Guarantor Guarantees (as defined in the Indenture) of the
Notes, which Guarantees shall be in the form of, and shall have the terms set
forth in, the specimen of "Parent Guarantee" endorsed on the specimen Notes
attached hereto as Exhibits A and B.

         SECTION 105. PROCEDURES. The Trustee is hereby instructed to
authenticate and deliver from time to time the Notes, with Guarantees endorsed
thereon, pursuant to the following procedures:

                  (a) the procedures set forth in the Administrative Procedures
attached as Exhibit B to the Distribution Agreement, as amended from time to
time; and

                  (b) each advice of settlement information with respect to any
of the Notes issued pursuant to (a) above will be deemed an instruction by the
Operating Partnership and the Parent Guarantor to authenticate and deliver such
Notes and Guarantees.

                                   ARTICLE II
                                  MISCELLANEOUS

         SECTION 201. DEFINITIONS. Capitalized terms used but not defined in
this Fourth Supplemental Indenture shall have the meanings ascribed thereto in
the Indenture.

         SECTION 202. CONFIRMATION OF INDENTURE. The Indenture, as heretofore
supplemented and amended by this Fourth Supplemental Indenture, is in all
respects ratified and confirmed, and the Indenture, this Fourth Supplemental
Indenture and all indentures supplemental thereto shall be read, taken and
construed as one and the same instrument.

         SECTION 203. CONCERNING THE TRUSTEE. The Trustee assumes no duties,
responsibilities or liabilities by reason of this Fourth Supplemental Indenture
other than as set forth in the Indenture and, in carrying out its
responsibilities hereunder, shall have all of the rights, protections and
immunities which it possesses under the Indenture.

         SECTION 204. GOVERNING LAW. This Fourth Supplemental Indenture, the
Indenture and the Medium Term Notes shall be governed by and construed in
accordance with the internal laws of the State of New York.

         SECTION 205. SEPARABILITY. In case any provision in this Fourth
Supplemental Indenture shall for any reason be held to 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 206. COUNTERPARTS. This Fourth Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.

                                       4
<PAGE>   5

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

                                       AMB PROPERTY, L.P.

                                       By: AMB PROPERTY CORPORATION,
                                           as General Partner

                                           By: /s/ W. Blake Baird
                                              ---------------------------------
                                              Name: W. Blake Baird
                                                   ----------------------------
                                              Title: President
                                                    ---------------------------

                                       AMB PROPERTY CORPORATION

                                       By: /s/ W. Blake Baird
                                          -------------------------------------
                                           Name: W. Blake Baird
                                                -------------------------------
                                           Title: President
                                                 ------------------------------

                                       STATE STREET BANK AND TRUST
                                       COMPANY OF CALIFORNIA, N.A., AS TRUSTEE

                                       By: /s/ Stephen Rivero
                                          -------------------------------------
                                           Name: Stephen Rivero
                                                -------------------------------
                                           Title: Vice President
                                                 ------------------------------

<PAGE>   6
                                                                       EXHIBIT A

                      FORM OF FIXED RATE MEDIUM TERM NOTES

                                       A-1

<PAGE>   7

                                                                       EXHIBIT B

                     FORM OF FLOATING RATE MEDIUM TERM NOTES

                                     B-1

<PAGE>   8

                                                                       EXHIBIT C

                         FORM OF SUBSIDIARY GUARANTEE

         FOR VALUE RECEIVED, the undersigned hereby jointly and severally with
the Parent Guarantor pursuant to the Parent Guarantee and any other Subsidiary
Guarantors under their respective Subsidiary Guarantees, unconditionally
guarantees to the Holder of the accompanying Medium Term Note (the "Note")
issued by AMB Property, L.P. (the "Operating Partnership") under an Indenture
dated as of June 30, 1998 (together with the First Supplemental Indenture, the
Second Supplemental Indenture and the Third Supplemental Indenture, each dated
as of June 30, 1998 and the Fourth Supplemental Indenture dated as of August 15,
2000, the "Indenture") among the Operating Partnership, AMB Property
Corporation, and State Street Bank and Trust Company of California, N.A., as
trustee (the "Trustee"), (a) the full and prompt payment of the principal of and
premium, if any, on such Note when and as the same shall become due and payable,
whether at the Maturity Date (as defined in the Note), by acceleration, by
redemption, repurchase or otherwise, and (b) the full and prompt payment of the
interest on such Note when and as the same shall become due and payable,
according to the terms of such Note and of the Indenture. In case of the failure
of the Operating Partnership punctually to pay any such principal, premium or
interest, the undersigned hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, whether at the
Maturity Date, upon acceleration, by redemption or repayment or otherwise, and
as if such payment were made by the Operating Partnership. The undersigned
hereby agrees, jointly and severally with the Parent Guarantor pursuant to the
Parent Guarantee and any other Subsidiary Guarantors under their respective
Subsidiary Guarantees, that its obligations hereunder shall be as principal and
not merely as surety, and shall be absolute and unconditional, and shall not be
affected, modified or impaired by the following: (a) the failure to give notice
to the Guarantors of the occurrence of an Event of Default under the Indenture;
(b) the waiver, surrender, compromise, settlement, release or termination of the
payment, performance or observance by the Operating Partnership or the
Guarantors of any or all of the obligations, covenants or agreements of any of
them contained in the Indenture or any Note; (c) the acceleration, extension or
any other changes in the time for payment of any principal of or interest or any
premium on any Note or for any other payment under the Indenture or of the time
for performance of any other obligations, covenants or agreements under or
arising out of the Indenture or any Note; (d) the modification or amendment
(whether material or otherwise) of any obligation, covenant or agreement set
forth in the Indenture or any Note; (e) the taking or the omission of any of the
actions referred to in the Indenture and in any of the actions under any Note;
(f) any failure, omission, delay or lack on the part of the Trustee to enforce,
assert or exercise any right, power or remedy conferred on the Trustee in the
Indenture, or any other action or acts on the part of the Trustee or any of the
Holders from time to time of any Note; (g) the voluntary or involuntary
liquidation, dissolution, sale or other disposition of all or substantially all
the assets, marshaling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with creditors or readjustment of, or other similar
proceedings affecting the Guarantors or the Operating Partnership or any of the
assets of any of them, or any allegation or contest of the validity of this
Subsidiary Guarantee in any such proceeding; (h) to the extent permitted by law,
the release or discharge by operation of law of the Guarantors from the
performance or observance of any obligation, covenant or agreement contained in
the Indenture; (i) to the extent permitted by law, the release or discharge by
operation of law of the Operating Partnership from the performance or observance
of any obligation, covenant or agreement contained in the Indenture; (j) the
default or failure of the Operating Partnership Trustee fully to perform any of
its obligations set forth in the Indenture or any Note; (k) the invalidity,
irregularity or unenforceability of the Indenture or any Note or any part of any
thereof; (l) any judicial or governmental action affecting the Operating
Partnership or any Note or consent or indulgence granted to the Operating
Partnership by the Holders or by the Trustee; or (m) the recovery of any
judgment against the Operating Partnership or any action to enforce the same or
any other circumstance which might constitute a legal or equitable discharge of
a surety or guarantor. The undersigned hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of merger, sale,
lease or conveyance of all or substantially all of its assets, insolvency or
bankruptcy of any Guarantor or the Operating Partnership, any right to require a
proceeding first against any other Guarantor or the Operating Partnership,
protest or notice with respect to such Note or the indebtedness evidenced
thereby and all demands whatsoever, and covenants that this Subsidiary Guarantee
will not be discharged except by complete performance of the obligations
contained in such Note and in this Subsidiary Guarantee.

         No reference herein to such Indenture and no provision of this
Subsidiary Guarantee or of such Indenture shall alter or impair the guarantee of
the undersigned, which is absolute and unconditional, of the full and prompt
payment of the principal of and premium, if any, and interest on the Note.

         THIS SUBSIDIARY GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                                      C-1
<PAGE>   9

         The validity and enforceability of this Subsidiary Guarantee shall not
be affected by the fact that it is not affixed to any particular Note.

         An Event of Default under the Indenture or any Note shall constitute an
event of default under this Subsidiary Guarantee, and shall entitle the Holder
of any Note to accelerate the obligations of the undersigned hereunder in the
same manner and to the same extent as the obligations of the Operating
Partnership.

         Notwithstanding any other provision of this Subsidiary Guarantee to the
contrary, the undersigned hereby waives any claims or other rights which it may
now have or hereafter acquire against any Guarantor or the Operating Partnership
that arise from the existence or performance of its obligations under this
Subsidiary Guarantee (all such claims and rights are referred to as "Guarantor's
Conditional Rights"), including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, or indemnification, any right to
participate in any claim or remedy against any Guarantor or the Operating
Partnership, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, by any payment made hereunder or
otherwise, including without limitation, the right to take or receive from any
Guarantor or the Operating Partnership, directly or indirectly, in cash or other
property or by setoff or in any other manner, payment or security on account of
such claim or other rights. The undersigned hereby agrees not to exercise any
rights which may be acquired by way of contribution under this Subsidiary
Guarantee or any other agreement, by any payment made hereunder or otherwise,
including, without limitation, the right to take or receive from any other
guarantor, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such contribution rights.
If, notwithstanding the foregoing provisions, any amount shall be paid to the
undersigned party on account of any such Guarantor's Conditional Rights and
either (i) such amount is paid to such undersigned party at any time when the
indebtedness shall not have been paid or performed in full, or (ii) regardless
of when such amount is paid to the undersigned, any payment made by any
Guarantor or the Operating Partnership to a Holder that is at any time
determined to be a Preferential Payment (as defined below), then such amount
paid to the undersigned shall be held in trust for the benefit of the Holders
and shall forthwith be paid such Holder to be credited and applied upon the
indebtedness, whether matured or unmatured. Any such payment is herein referred
to as a "Preferential Payment" to the extent any Guarantor or the Operating
Partnership makes any payment to Holder in connection with the Note, and any or
all of such payment is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid or paid over to a trustee,
receiver or any other entity, whether under any bankruptcy act or otherwise.

         To the extent that any of the provisions of the immediately preceding
paragraph shall not be enforceable, the undersigned agrees that until such time
as the indebtedness has been paid and performed in full and the period of time
has expired during which any payment made by any Guarantor or the Operating
Partnership or the undersigned to a Holder may be determined to be a
Preferential Payment, Guarantor's Conditional Rights to the extent not validly
waived shall be subordinate to Holders' right to full payment and performance of
the indebtedness and the undersigned shall not enforce any of its respective
portion of the Guarantors' Conditional Rights until such time as the
indebtedness has been paid and performed in full and the period of time has
expired during which any payment made by any Guarantor or the Operating
Partnership or the undersigned to Holders may be determined to be a Preferential
Payment.

         The undersigned's liability (the "Base Guaranty Liability") shall be
that amount from time to time equal to the aggregate liability of the
undersigned hereunder, but shall be limited to the lesser of (A) the aggregate
amount of the obligation as stated in the second sentence of Section 1401 of the
Indenture, and (B) the amount, if any, which would not have (i) rendered the
undersigned "insolvent" (as such term is defined in Section 101(29) of the
Federal Bankruptcy Code and in Section 271 of the Debtor and Creditor Law of the
State of New York, as each is in effect at the date of the Indenture) or (ii)
left the undersigned with unreasonably small capital at the time this Subsidiary
Guarantee was entered into, after giving effect to the incurrence of existing
Debt (as defined in the Indenture) immediately prior to such time, provided
that, it shall be a presumption in any lawsuit or other proceeding in which the
undersigned is a party that the amount guaranteed is the amount set forth in (A)
above unless a creditor, or representative of creditors of the undersigned or a
trustee in bankruptcy of the undersigned, as debtor in possession, otherwise
proves in such a lawsuit that the aggregate liability of the undersigned is
limited to the amount set forth in (B). In making any determination as to the
solvency or sufficiency of capital of the undersigned in accordance with the
previous sentence, the right of the undersigned to contribution from the other
Guarantors, to subrogation and any other rights the undersigned may have,
contractual or otherwise, shall be taken into account.

                                      C-2
<PAGE>   10

         The obligations of the undersigned to the Holder of any Note and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 14 of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Subsidiary Guarantee and all of the other
provisions of the Indenture to which this Subsidiary Guarantee relates.

         Capitalized terms in this Subsidiary Guarantee which are not defined
herein shall have the meanings assigned to them in the Indenture.

         IN WITNESS WHEREOF, the undersigned has caused this Subsidiary
Guarantee to be duly executed.

Dated:
       ------------------

                                       [NAME OF SUBSIDIARY]

                                       By:
                                           -------------------------------

                                      C-3<PAGE>   1

                                                                     Exhibit 4.2

                            PHELPS DODGE CORPORATION

                                       TO

                       FIRST UNION NATIONAL BANK, TRUSTEE

                             SUBORDINATED INDENTURE

                          DATED AS OF AUGUST 11, 2000

                            PROVIDING FOR ISSUANCE OF

                  JUNIOR SUBORDINATED DEBT SECURITIES IN SERIES

<PAGE>   2

Reconciliation and tie between Subordinated Indenture, dated as of August 11,
2000, and the Trust Indenture Act of 1939, as amended.

       Trust Indenture Act of 1939 Section     Indenture Section
       -----------------------------------     -----------------

       310(a)(1).........................      6.12
            (a)(2).......................      6.12
            (a)(3).......................      TIA
            (a)(4).......................      Not applicable
            (a)(5).......................      TIA
            (b)..........................      6.10; 6.12(b); TIA
       311(a)............................      TIA
            (b)..........................      TIA
       312(a)............................      6.8
            (b)..........................      TIA
            (c)..........................      TIA
       313(a)............................      6.7; TIA
            (b)..........................      TIA
            (c)..........................      TIA
            (d)..........................      TIA
       314(a)............................      9.6; 9.7; TIA
            (b)..........................      Not Applicable
            (c)(1).......................      1.2
            (c)(2).......................      1.2
            (c)(3).......................      Not Applicable
            (d)..........................      Not Applicable
            (e)..........................      TIA
            (f)..........................      TIA
       315(a)............................      6.1
            (b)..........................      6.6
            (c)..........................      6.1
            (d)(1).......................      TIA
            (d)(2).......................      TIA
            (d)(3).......................      TIA
            (e)..........................      TIA
       316(a)(last sentence).............      1.1
            (a)(1)(A)....................      5.2; 5.8
            (a)(1)(B)....................      5.7
            (b)..........................      5.9; 5.10
            (c)..........................      TIA

                                       1
<PAGE>   3

       Trust Indenture Act of 1939 Section     Indenture Section
       -----------------------------------     -----------------
       317(a)(1).........................      5.3
            (a)(2).......................      5.4
            (b)..........................      9.3
       318(a)............................      1.11
            (b)..........................      TIA
            (c)..........................      1.11; TIA

----------

This reconciliation and tie section does not constitute part of the Subordinated
Indenture.

                                       2
<PAGE>   4

                                Table of Contents

<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                        <C>                                                                                  <C>
ARTICLE 1                  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION................................1
     Section 1.1           Definitions............................................................................1
     Section 1.2           Compliance Certificates and Opinions..................................................10
     Section 1.3           Form of Documents Delivered to Trustee................................................11
     Section 1.4           Acts of Holders.......................................................................11
     Section 1.5           Notices, etc., to Trustee and Company.................................................13
     Section 1.6           Notice to Holders; Waiver.............................................................13
     Section 1.7           Headings and Table of Contents........................................................14
     Section 1.8           Successor and Assigns.................................................................14
     Section 1.9           Separability..........................................................................14
     Section 1.10          Benefits of Indenture.................................................................14
     Section 1.11          Governing Law.........................................................................14
     Section 1.12          Legal Holidays........................................................................14

ARTICLE 2                  SECURITY FORMS........................................................................15
     Section 2.1           Forms Generally.......................................................................15
     Section 2.2           Form of Trustee's Certificate of Authentication.......................................16
     Section 2.3           Securities in Global Form.............................................................16
     Section 2.4           Form of Legend for Securities in Global Form..........................................17

ARTICLE 3                  THE SECURITIES........................................................................17
     Section 3.1           Amount Unlimited; Issuable in Series..................................................17
     Section 3.2           Denominations.........................................................................21
     Section 3.3           Execution, Authentication, Delivery and Dating........................................21
     Section 3.4           Temporary Securities..................................................................24
     Section 3.5           Registration, Transfer and Exchange...................................................25
     Section 3.6           Replacement Securities................................................................28
     Section 3.7           Payment of Interest; Interest Rights Preserved........................................30
     Section 3.8           Persons Deemed Owners.................................................................32
     Section 3.9           Cancellation..........................................................................32
     Section 3.10          Computation of Interest...............................................................33
     Section 3.11          CUSIP Numbers.........................................................................33
     Section 3.12          Currency and Manner of Payment in Respect of Securities...............................33
     Section 3.13          Appointment and Resignation of Exchange Rate Agent....................................37

ARTICLE 4                  SATISFACTION, DISCHARGE AND DEFEASANCE................................................38
     Section 4.1           Termination of Company's Obligations Under the Indenture..............................38
     Section 4.2           Application of Trust Funds............................................................39
     Section 4.3           Applicability of Defeasance Provisions; Company's Option to Effect Defeasance or
                           Covenant Defeasance...................................................................40
     Section 4.4           Defeasance and Discharge..............................................................40
     Section 4.5           Covenant Defeasance...................................................................41
</TABLE>

                                       i
<PAGE>   5

                                Table of Contents
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                        <C>                                                                                  <C>
     Section 4.6           Conditions to Defeasance or Covenant Defeasance.......................................41
     Section 4.7           Deposited Money and Government Obligations to Be Held in Trust........................43
     Section 4.8           Repayment to Company..................................................................43
     Section 4.9           Indemnity for Government Obligations..................................................43

ARTICLE 5                  DEFAULTS AND REMEDIES.................................................................44
     Section 5.1           Events of Default.....................................................................44
     Section 5.2           Acceleration; Rescission and Annulment................................................45
     Section 5.3           Collection of Indebtedness and Suits for Enforcement by Trustee.......................45
     Section 5.4           Trustee May File Proofs of Claim......................................................46
     Section 5.5           Trustee May Enforce Claims Without Possession of Securities...........................46
     Section 5.6           Delay or Omission Not Waiver..........................................................46
     Section 5.7           Waiver of Past Defaults...............................................................46
     Section 5.8           Control by Majority...................................................................47
     Section 5.9           Limitation on Suits by Holders........................................................47
     Section 5.10          Rights of Holders to Receive Payment..................................................48
     Section 5.11          Application of Money Collected........................................................48
     Section 5.12          Restoration of Rights and Remedies....................................................48
     Section 5.13          Rights and Remedies Cumulative........................................................49

ARTICLE 6                  THE TRUSTEE...........................................................................49
     Section 6.1           Certain Duties and Responsibilities of the Trustee....................................49
     Section 6.2           Rights of Trustee.....................................................................49
     Section 6.3           Trustee May Hold Securities...........................................................50
     Section 6.4           Money Held in Trust...................................................................50
     Section 6.5           Trustee's Disclaimer..................................................................50
     Section 6.6           Notice of Defaults....................................................................50
     Section 6.7           Reports by Trustee to Holders.........................................................51
     Section 6.8           Securityholder Lists..................................................................51
     Section 6.9           Compensation and Indemnity............................................................51
     Section 6.10          Replacement of Trustee................................................................52
     Section 6.11          Acceptance of Appointment by Successor................................................54
     Section 6.12          Eligibility; Disqualification.........................................................55
     Section 6.13          Merger, Conversion, Consolidation or Succession to Business...........................55
     Section 6.14          Appointment of Authenticating Agent...................................................56

ARTICLE 7                  CONSOLIDATION, MERGER OR SALE BY THE COMPANY..........................................57
     Section 7.1           Consolidation, Merger or Sale of Assets Permitted.....................................57

ARTICLE 8                  SUPPLEMENTAL INDENTURES...............................................................58
     Section 8.1           Supplemental Indentures Without Consent of Holders....................................58
     Section 8.2           Supplemental Indentures With Consent of Holders.......................................59
     Section 8.3           Compliance with Trust Indenture Act...................................................61
     Section 8.4           Execution of Supplemental Indentures..................................................61
</TABLE>

                                       ii
<PAGE>   6

                                Table of Contents
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
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     Section 8.5           Effect of Supplemental Indentures.....................................................61
     Section 8.6           Reference in Securities to Supplemental Indentures....................................61

ARTICLE 9                  COVENANTS.............................................................................61
     Section 9.1           Payment of Principal, Premium, if Any, and Interest...................................61
     Section 9.2           Maintenance of Office or Agency.......................................................62
     Section 9.3           Money for Securities Payments to Be Held in Trust; Unclaimed Money....................63
     Section 9.4           Corporate Existence...................................................................64
     Section 9.5           Insurance.............................................................................64
     Section 9.6           Reports by the Company................................................................65
     Section 9.7           Annual Review Certificate.............................................................65
     Section 9.8           Books of Record and Account...........................................................65
     Section 9.9           Limitation on Liens...................................................................66
     Section 9.10          Limitation on Sale and Lease-Back.....................................................68

ARTICLE 10                 REDEMPTION............................................................................69
     Section 10.1          Applicability of Article..............................................................69
     Section 10.2          Election to Redeem; Notice to Trustee.................................................69
     Section 10.3          Selection of Securities to Be Redeemed................................................70
     Section 10.4          Notice of Redemption..................................................................70
     Section 10.5          Deposit of Redemption Price...........................................................71
     Section 10.6          Securities Payable on Redemption Date.................................................72
     Section 10.7          Securities Redeemed in Part...........................................................72

ARTICLE 11                 SINKING FUNDS.........................................................................73
     Section 11.1          Applicability of Article..............................................................73
     Section 11.2          Satisfaction of Sinking Fund Payments with Securities.................................73
     Section 11.3          Redemption of Securities for Sinking Fund.............................................73

ARTICLE 12                 SUBORDINATION.........................................................................74
     Section 12.1          Agreement to Subordinate..............................................................74
     Section 12.2          Certain Definitions...................................................................74
     Section 12.3          Liquidation; Dissolution; Bankruptcy; Etc.............................................74
     Section 12.4          Default on Senior Indebtedness........................................................75
     Section 12.5          When Distribution Must Be Paid Over...................................................75
     Section 12.6          Notice by Company.....................................................................76
     Section 12.7          Subrogation...........................................................................76
     Section 12.8          Relative Rights.......................................................................77
     Section 12.9          Subordination May Not Be Impaired by Company..........................................77
     Section 12.10         Distribution..........................................................................77
     Section 12.11         Rights of Trustee and Paying Agent....................................................77
     Section 12.12         Authorization to Effect Subordination.................................................78
     Section 12.13         Certain Conversions or Exchanges Deemed Payment.......................................78
</TABLE>

                                      iii
<PAGE>   7

         SUBORDINATED INDENTURE, dated as of August 11, 2000, from PHELPS DODGE
CORPORATION, a New York corporation (the "Company"), to FIRST UNION NATIONAL
BANK, a national banking association, as trustee (the "Trustee").

                                    Recitals

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

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

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

                                   ARTICLE 1

             Definitions and Other Provisions of General Application

         Section 1.1 Definitions.

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

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

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

                  (3) all accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with generally accepted
         accounting principles; and

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

         "Affiliate" of any specified Person means any Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with such

<PAGE>   8

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

         "Agent" means any Paying Agent or Registrar.

         "Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 6.14.

         "Authorized Newspaper" means a newspaper of general circulation, in the
official language of the country of publication or in the English language,
customarily published on each Business Day whether or not published on
Saturdays, Sundays or holidays. Whenever successive publications in an
Authorized Newspaper are required hereunder they may be made (unless otherwise
expressly provided herein) on the same or different days of the week and in the
same or different Authorized Newspapers.

         "Bearer Security" means any Security issued hereunder which is payable
to bearer.

         "Board" or "Board of Directors" means the Board of Directors of the
Company, the Executive Committee or any other duly authorized committee thereof.

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

         "Business Day", when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 3.1, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in that Place of Payment or particular
location are authorized or obligated by law or executive order to close.

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

                                       2
<PAGE>   9

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

         "Company Order" and "Company Request" mean, respectively, a written
order or request signed in the name of the Company by two Officers, one of whom
must be the Chairman of the Board, the President, the chief financial officer,
the Treasurer, the Assistant Treasurer, the Controller or a Vice-President of
the Company.

         "Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the issuer of such currency and for the settlement of transactions by a
central bank or other public institutions of or within the international banking
community, (ii) the ECU both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Communities or (iii) any currency unit other than the ECU for the purposes for
which it was established.

         "Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 5847 San Felipe,
Suite 1050, Houston, Texas 77057.

         "currency unit" for all purposes of this Indenture shall include any
composite currency.

         "Debt" means indebtedness for money borrowed.

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

         "Depositary", when used with respect to the Securities of or within any
series issuable or issued in whole or in part in global form, means the Person
designated as Depositary by the Company pursuant to Section 3.1 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter shall mean or include each Person
which is then a Depositary hereunder, and if at any time there is more than one
such Person, shall be a collective reference to such Persons.

         "Dollar" means the currency of the United States as at the time of
payment is legal tender for the payment of public and private debts.

         "ECU" means the European Currency Unit as defined and revised from time
to time by the Council of the European Communities.

         "Equity Securities" means all or any of the following, authorized from
time to time: (i) the Company's common shares, $6.25 par value per share; (ii)
the Company's

                                       3
<PAGE>   10

preferred shares, $1.00 par value per share; and (iii) any other equity
securities of the Company.

         "European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.

         "European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.

         "Exchange Rate Agent", when used with respect to Securities of or
within any series, means, unless otherwise specified with respect to any
Securities pursuant to Section 3.1, a New York Clearing House bank designated
pursuant to Section 3.1 or Section 3.13.

         "Exchange Rate Officer's Certificate" means a certificate setting forth
(i) the applicable Market Exchange Rate or the applicable bid quotation and (ii)
the Dollar or Foreign Currency amounts of principal (and premium, if any) and
interest, if any (on an aggregate basis and on the basis of a Security having
the lowest denomination principal amount in the relevant currency or currency
unit), payable with respect to a Security of any series on the basis of such
Market Exchange Rate or the applicable bid quotation, signed by the chief
financial officer, the Treasurer, the Controller, any Vice President or the
Assistant Treasurer of the Company.

         "Foreign Currency" means any currency issued by the government of one
or more countries other than the United States or by any recognized
confederation or association of such governments.

         "Government Obligations" means securities which are (i) direct
obligations of the United States or, if specified as contemplated by Section
3.1, the government which issued the currency in which the Securities of a
particular series are payable, 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 or, if specified
as contemplated by Section 3.1, such government which issued the foreign
currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States or such other government, which, in either case, 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 Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation evidenced by such depository
receipt.

                                       4
<PAGE>   11

         "Holder" means, with respect to a Bearer Security, a bearer thereof or
of a coupon appertaining thereto and, with respect to a Registered Security, a
person in whose name a Security is registered on the Register.

         "Indenture" means this Subordinated Indenture as originally executed or
as amended or supplemented from time to time and shall include the forms and
terms of particular series of Securities established as contemplated hereunder.

         "Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.

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

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

         "Market Exchange Rate" means, unless otherwise specified with respect
to any Securities pursuant to Section 3.1, (i) for any conversion involving a
currency unit on the one hand and Dollars or any Foreign Currency on the other,
the exchange rate between the relevant currency unit and Dollars or such Foreign
Currency calculated by the method specified pursuant to Section 3.1 for the
Securities of the relevant series, (ii) for any conversion of Dollars into any
Foreign Currency, the noon buying rate for such Foreign Currency for cable
transfers quoted in New York City as certified for customs purposes by the
Federal Reserve Bank of New York and (iii) for any conversion of one Foreign
Currency into Dollars or another Foreign Currency, the spot rate at noon local
time in the relevant market at which, in accordance with normal banking
procedures, the Dollars or Foreign Currency into which conversion is being made
could be purchased with the Foreign Currency from which conversion is being made
from major banks located in New York City, London or any other principal market
for Dollars or such purchased Foreign Currency, in each case determined by the
Exchange Rate Agent. Unless otherwise specified with respect to any Securities
pursuant to Section 3.1, in the event of the unavailability of any of the
exchange rates provided for in the foregoing clauses (i), (ii) and (iii), the
Exchange Rate Agent shall use, in its sole discretion and without liability on
its part, such quotation of the Federal Reserve Bank of New York as of the most
recent available date, or quotations from one or more major banks in New York
City, London or other principal market for such currency or currency unit in
question (which may include any such bank acting as Trustee under this
Indenture), or such other quotations as the Exchange Rate Agent shall deem
appropriate. Unless otherwise specified by the Exchange Rate Agent, if there is
more than one market for dealing in any currency or currency unit by reason of
foreign exchange regulations or otherwise, the market to be used in respect of
such currency or currency unit shall be that upon which a

                                       5
<PAGE>   12

nonresident issuer of securities designated in such currency or currency unit
would purchase such currency or currency unit in order to make payments in
respect of such securities.

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

         "Officer" means the Chairman, President and Chief Executive Officer,
any Senior Vice President, any Vice President, any Assistant Treasurer or any
Assistant Secretary of the Company.

         "Officers' Certificate", when used with respect to the Company, means a
certificate signed by two Officers, one of whom must be the Chairman, President
and Chief Executive Officer, a Senior Vice President, a Vice President, or an
Assistant Treasurer of the Company.

         "Opinion of Counsel" means a written opinion from the general counsel
of the Company or other legal counsel who is reasonably acceptable to the
Trustee. Such counsel may be an employee of or counsel to the Company.

         "Original Issue Discount Security" means any Security which provides
for an amount less than the stated principal amount thereof to be due and
payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 5.2.

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

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

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

                                       6
<PAGE>   13

                  (iii) Securities, except to the extent provided in Sections
         4.4 and 4.5, with respect to which the Company has effected defeasance
         and/or covenant defeasance as provided in Article 4; and

                  (iv) Securities which have been paid pursuant to Section 3.6
         or in exchange for or in lieu of which other Securities have been
         authenticated and delivered pursuant to this Indenture, other than any
         such Securities in respect of which there shall have been presented to
         the Trustee proof satisfactory to it that such Securities are held by a
         bona fide purchaser in whose hands such Securities are valid
         obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, or whether
sufficient funds are available for redemption or for any other purpose, and for
the purpose of making the calculations required by section 313 of the Trust
Indenture Act, (w) the principal amount of any Original Issue Discount
Securities that may be counted in making such determination or calculation and
that shall be deemed to be Outstanding for such purpose shall be equal to the
amount of principal thereof that would be (or shall have been declared to be)
due and payable, at the time of such determination, upon a declaration of
acceleration of the maturity thereof pursuant to Section 5.2, (x) the principal
amount of any Security denominated in a Foreign Currency that may be counted in
making such determination or calculation and that shall be deemed Outstanding
for such purpose shall be equal to the Dollar equivalent, determined as of the
date such Security is originally issued by the Company as set forth in an
Exchange Rate Officers' Certificate delivered to the Trustee, of the principal
amount (or, in the case of an Original Issue Discount Security, the Dollar
equivalent as of such date of original issuance of the amount determined as
provided in clause (w) above) of such Security, (y) the principal amount of any
Indexed Security that may be counted in making such determination or calculation
and that shall be deemed outstanding for such purpose shall be equal to the
principal face amount of such Indexed Security at original issuance, unless
otherwise provided with respect to such Security pursuant to Section 3.1, and
(z) Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in making such calculation or in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.

                                       7
<PAGE>   14

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

         "Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including, without
limitation, the rate or rates of interest or formula for determining the rate or
rates of interest thereon, if any, the Maturity thereof and the redemption
provisions, if any, with respect thereto, are to be determined by the Company
upon the issuance of such Securities.

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

         "Place of Payment", when used with respect to the Securities of or
within any series, means the place or places where the principal of, premium, if
any, and interest on such Securities are payable as specified as contemplated by
Sections 3.1 and 9.2.

         "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

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

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

         "Registered Security" means any Security issued hereunder and
registered as to principal and interest in the Register.

         "Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of or within any series means the date specified for that
purpose as contemplated by Section 3.1.

         "Responsible Officer", when used with respect to the Trustee, shall
mean any vice president, any second vice president, the assistant secretary, the
assistant treasurer, any senior trust officer, any trust officer, or any officer
of the Trustee 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.

                                       8
<PAGE>   15

         "Security" or "Securities" has the meaning stated in the first recital
of this Indenture and more particularly means a Security or Securities of the
Company issued, authenticated and delivered under this Indenture.

         "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.

         "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 or in a coupon representing such installment of interest 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 Person means any Person of which at least a
majority of capital stock having ordinary voting power for the election of
directors or other governing body of such Person is owned by such Person
directly or through one or more Subsidiaries of such Person.

         "Trust Indenture Act" means the Trust Indenture Act of 1939 as in
effect on the date of this Indenture, except as provided in Section 8.3.

         "Trustee" means the party named as such in the first paragraph of this
Indenture until a successor Trustee replaces it pursuant to the applicable
provisions of this Indenture, and thereafter means such successor Trustee and
if, at any time, there is more than one Trustee, "Trustee" as used with respect
to the Securities of any series shall mean the Trustee with respect to the
Securities of that series.

         "United States" means, unless otherwise specified with respect to the
Securities of any series as contemplated by Section 3.1, the United States of
America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction.

         "U.S. Person" means, unless otherwise specified with respect to the
Securities of any series as contemplated by Section 3.1, a citizen, national or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust, the income of which is subject to
United States federal income taxation regardless of its source.

         "Yield to Maturity" means the yield to maturity, calculated by the
Company at the time of issuance of a series of Securities or, if applicable, at
the most recent determination of interest on such series, in accordance with
accepted financial practice.

         (b) The following terms shall have the meanings specified in the
Sections referred to opposite such term below:

                                       9
<PAGE>   16

                      Term                                 Section
                      ----                                 -------
             "Act"                                          1.4(a)
             "Attributable Debt"                            9.9(c)
             "Bankruptcy Law"                               5.1
             "Component Currency"                           3.12(h)
             "Conversion Date"                              3.12(d)
             "Custodian"                                    5.1
             "Defaulted Interest"                           3.7(b)
             "Election Date"                                3.12(h)
             "Event of Default"                             5.1
             "Principal Property"                           9.9(c)
             "Register"                                     3.5
             "Registrar"                                    3.5
             "Restricted Subsidiary"                        9.9(c)
             "Sale and Lease-Back Transaction"              9.10
             "Senior Indebtedness"                          12.2
             "Valuation Date"                               3.12(c)

Section 1.2 Compliance Certificates and Opinions. Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Sections 2.3 and 9.7) shall include:

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

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

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

                                       10
<PAGE>   17

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

         Section 1.3 Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.

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

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

         Section 1.4 Acts of Holders.

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

         (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate

                                       11
<PAGE>   18

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

         (c) The ownership of Bearer Securities may be proved by the production
of such Bearer Securities or by a certificate executed by any trust company,
bank, banker or other depository, wherever situated, if such certificate shall
be deemed by the Trustee to be satisfactory, showing that at the date therein
mentioned such Person had on deposit with such depository, or exhibited to it,
the Bearer Securities therein described; or such facts may be proved by the
certificate or affidavit of the Person holding such Bearer Securities, if such
certificate or affidavit is deemed by the Trustee to be satisfactory. The
Trustee and the Company may assume that such ownership of any Bearer Security
continues until (i) another such certificate or affidavit bearing a later date
issued in respect of the same Bearer Security is produced, (ii) such Bearer
Security is produced to the Trustee by some other Person, (iii) such Bearer
Security is surrendered in exchange for a Registered Security or (iv) such
Bearer Security is no longer Outstanding. The ownership of Bearer Securities may
also be proved in any other manner which the Trustee deems sufficient.

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

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

         (f) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders of Registered Securities entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of Registered Securities of record at the close of business on such record date
shall be deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall

                                       12
<PAGE>   19

be computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.

         Section 1.5 Notices, etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,

                  (1) the Trustee by any Holder or by the Company shall be
         sufficient for every purpose hereunder (unless otherwise herein
         expressly provided) if in writing and mailed, first-class postage
         prepaid, to the Trustee at its Corporate Trust Office, Attention:
         [Corporate Trust Administration], or

                  (2) the Company by the Trustee or by any Holder shall be
         sufficient for every purpose hereunder (unless otherwise herein
         expressly provided) if in writing and mailed, first-class postage
         prepaid, to the Company addressed to it at Phelps Dodge Corporation,
         2600 N. Central Avenue, Phoenix, Arizona 85004-3014, Attention: General
         Counsel or at any other address previously furnished in writing to the
         Trustee by the Company.

         Section 1.6 Notice to Holders; Waiver. Where this Indenture provides
for notice to Holders of any event, (i) if any of the Securities affected by
such event are Registered Securities, such notice to the Holders thereof shall
be sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each such Holder affected by such
event, at his address as it appears in the Register, within the time prescribed
for the giving of such notice and, (ii) if any of the Securities affected by
such event are Bearer Securities, notice to the Holders thereof shall be
sufficiently given (unless otherwise herein or in the terms of such Bearer
Securities expressly provided) if published once in an Authorized Newspaper in
New York, New York, and in such other city or cities, if any, as may be
specified as contemplated by Section 3.1.

         In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. In any case where notice
is given to Holders by publication, neither the failure to publish such notice,
nor any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein. Any
notice mailed to a Holder in the manner herein prescribed shall be conclusively
deemed to have been received by such Holder, whether or not such Holder actually
receives such notice.

                                       13
<PAGE>   20

         If by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice as provided above,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder. If it is
impossible or, in the opinion of the Trustee, impracticable to give any notice
by publication in the manner herein required, then such publication in lieu
thereof as shall be made with the approval of the Trustee shall constitute a
sufficient publication of such notice.

         Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.

         Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

         Section 1.7 Headings and Table of Contents. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.

         Section 1.8 Successor and Assigns. All covenants and agreements in this
Indenture by the Company shall bind its successor and assigns, whether so
expressed or not.

         Section 1.9 Separability. In case any provision of this Indenture or
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 1.10 Benefits of Indenture. Nothing in this Indenture or in the
Securities, expressed or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.

         Section 1.11 Governing Law. THIS INDENTURE, THE SECURITIES AND ANY
COUPONS APPERTAINING THERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. This Indenture is subject to the Trust
Indenture Act and if any provision hereof limits, qualifies or conflicts with
the Trust Indenture Act, the Trust Indenture Act shall control.

         Section 1.12 Legal Holidays. In any case where any Interest Payment
Date, Redemption Date, sinking fund payment date, Stated Maturity or Maturity of
any

                                       14
<PAGE>   21

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

                                   ARTICLE 2

                                 Security Forms

         Section 2.1 Forms Generally. The Securities of each series and the
coupons, if any, to be attached thereto shall be in substantially such form as
shall be established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities
and coupons, if any, as evidenced by their execution of the Securities and
coupons, if any. If temporary Securities of any series are issued as permitted
by Section 3.4, the form thereof also shall be established as provided in the
preceding sentence. If the forms of Securities and coupons, if any, of any
series are established by, or by action taken pursuant to, a Board Resolution, a
copy of the Board Resolution together with an appropriate record of any such
action taken pursuant thereto, including a copy of the approved form of
Securities or coupons, if any, shall be certified by the Corporate Secretary or
an Assistant Secretary of the Company and delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by Section 3.3 for the
authentication and delivery of such Securities.

         Unless otherwise specified as contemplated by Section 3.1, Bearer
Securities shall have interest coupons attached.

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

                                       15
<PAGE>   22

         Section 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:

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

                                       FIRST UNION NATIONAL BANK
                                            as Trustee

                                       By
                                            Authorized Signatory

         Section 2.3 Securities in Global Form. If Securities of or within a
series are issuable in whole or in part in global form, any such Security may
provide that it shall represent the aggregate or specified amount of Outstanding
Securities from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced or increased to reflect exchanges. Any endorsement of a Security
in global form to reflect the amount, or any increase or decrease in the amount,
or changes in the rights of Holders, of Outstanding Securities represented
thereby, shall be made in such manner and by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 3.3 or 3.4. Subject to the provisions of Section 3.3 and, if
applicable, Section 3.4, the Trustee shall deliver and redeliver any security in
permanent global form in the manner and upon instructions given by the Person or
Persons specified therein or in the applicable Company Order. Any instructions
by the Company with respect to endorsement or delivery or redelivery of a
Security in global form shall be in writing but need not comply with Section 1.2
hereof and need not be accompanied by an Opinion of Counsel.

         The provisions of the last paragraph of Section 3.3 shall apply to any
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 1.2 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last paragraph of Section 3.3.

         Notwithstanding the provisions of Section 2.1 and 3.7, unless otherwise
specified as contemplated by Section 3.1, payment of principal of, premium, if
any, and interest on any Security in permanent global form shall be made to the
Person or Persons specified therein.

                                       16
<PAGE>   23

         Section 2.4 Form of Legend for Securities in Global Form. Any Security
in global form authenticated and delivered hereunder shall bear a legend in
substantially the following form:

         This Security is in global form within the meaning of the Indenture
         hereinafter referred to and is registered in the name of a Depositary
         or a nominee of a Depositary. Unless and until it is exchanged in whole
         or in part for Securities in certificated form, this Security may not
         be transferred except as a whole by the Depositary to a nominee of the
         Depositary or by a nominee of the Depositary to the Depositary or
         another nominee of the Depositary or by the Depositary or any such
         nominee to a successor Depositary or a nominee of such successor
         Depositary.

                                    ARTICLE 3

                                 The Securities

         Section 3.1 Amount Unlimited; Issuable in Series.

         (a) The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued from time to time in one or more series.

         (b) The following matters shall be established with respect to each
series of Securities issued hereunder (i) by a Board Resolution, (ii) by action
taken pursuant to a Board Resolution and (subject to Section 3.3) set forth, or
determined in the manner provided, in an Officers' Certificate or (iii) in one
or more indentures supplemental hereto:

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

                  (2) any limit upon the aggregate principal amount of the
         Securities of the series which may be authenticated and delivered under
         this Indenture (which limit shall not pertain to 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 3.4, 3.5, 3.6, 8.6, or 10.7);

                  (3) the date or dates on which the principal of and premium,
         if any, on the Securities of the series is payable or the method of
         determination thereof;

                  (4) the rate or rates at which the Securities of the series
         shall bear interest, if any, or the method of calculating such rate or
         rates of interest, the date or dates from which such interest shall
         accrue or the method by which such date or dates

                                       17
<PAGE>   24

         shall be determined, the Interest Payment Dates on which any such
         interest shall be payable and, with respect to Registered Securities,
         the Regular Record Date, if any, for the interest payable on any
         Registered Security on any Interest Payment Date;

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

                  (6) the period or periods within which, the price or prices at
         which, the currency or currencies (including currency unit or units) in
         which, and the other terms and conditions upon which, Securities of the
         series may be redeemed, in whole or in part, at the option of the
         Company and, if other than as provided in Section 10.3, the manner in
         which the particular Securities of such series (if less than all
         Securities of such series are to be redeemed) are to be selected for
         redemption;

                  (7) the right, if any, to extend the interest payment periods
         and any conditions to the payment or resumption of payment of interest
         before, during or after any such extension;

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

                  (9) if other than denominations of $1,000 and any integral
         multiple thereof, if Registered Securities, and if other than the
         denomination of $5,000, if Bearer Securities, the denominations in
         which Securities of the series shall be issuable;

                  (10) if other than Dollars, the currency or currencies
         (including currency unit or units) in which the principal of, premium,
         if any, and interest, if any, on the Securities of the series shall be
         payable, or in which the Securities of the series shall be denominated,
         and the particular provisions applicable thereto in accordance with, in
         addition to, or in lieu of the provisions of Section 3.12;

                  (11) if the payments of principal of, premium, if any, or
         interest, if any, on the Securities of the series are to be made, at
         the election of the Company or a Holder, in a currency or currencies
         (including currency unit or units) other than that in which such
         Securities are denominated or designated to be payable, the currency or
         currencies (including composite currency, currency unit or units) in

                                       18
<PAGE>   25

         which such payments are to be made, the terms and conditions of such
         payments and the manner in which the exchange rate with respect to such
         payments shall be determined, and the particular provisions applicable
         thereto in accordance with, in addition to, or in lieu of the
         provisions of Section 3.12;

                  (12) if the amount of payments of principal of, premium, if
         any, and interest, if any, on the Securities of the series shall be
         determined with reference to an index, formula or other method (which
         index, formula or method may be based, without limitation, on a
         currency or currencies (including currency unit or units) other than
         that in which the Securities of the series are denominated or
         designated to be payable), the index, formula or other method by which
         such amounts shall be determined;

                  (13) if other than the principal amount thereof, the portion
         of the principal amount of such Securities of the series which shall be
         payable upon declaration of acceleration thereof pursuant to Section
         5.2 or the method by which such portion shall be determined;

                  (14) if other than as provided in Section 3.7, the Person to
         whom any interest on any Registered Security of the series shall be
         payable and the manner in which, or the Person to whom, any interest on
         any Bearer Securities of the series shall be payable;

                  (15) provisions, if any, granting special rights to the
         Holders of Securities of the series upon the occurrence of such events
         as may be specified;

                  (16) any deletions from, modifications of or additions to the
         Events of Default set forth in Section 5.1 or covenants of the Company
         set forth in Article 9 pertaining to the Securities of the series;

                  (17) under what circumstances, if any, the Company will pay
         additional amounts on the Securities of that series held by a Person
         who is not a U.S. Person in respect of taxes or similar charges
         withheld or deducted and, if so, whether the Company will have the
         option to redeem such Securities rather than pay such additional
         amounts (and the terms of any such option);

                  (18) whether Securities of the series shall be issuable as
         Registered Securities or Bearer Securities (with or without interest
         coupons), or both, and any restrictions applicable to the offering,
         sale or delivery of Bearer Securities and, if other than as provided in
         Section 3.5, the terms upon which Bearer Securities of a series may be
         exchanged for Registered Securities of the same series and vice versa;

                                       19
<PAGE>   26

                  (19) the date as of which any Bearer Securities of the series
         and any temporary global Security representing Outstanding Securities
         of the series shall be dated if other than the date of original
         issuance of the first Security of the series to be issued;

                  (20) the forms of the Securities and coupons, if any, of the
         series;

                  (21) the applicability, if any, to the Securities of or within
         the series of Sections 4.4 and 4.5, or such other means of defeasance
         or covenant defeasance as may be specified for the Securities and
         coupons, if any, of such series, and whether, for the purpose of such
         defeasance or covenant defeasance, the term "Government Obligations"
         shall include obligations referred to in the definition of such term
         which are not obligations of the United States or an agency or
         instrumentality of the United States;

                  (22) if other than the Trustee, the identity of the Registrar
         and any Paying Agent;

                  (23) the designation of the initial Exchange Rate Agent, if
         any;

                  (24) if the Securities of the series shall be issued in whole
         or in part in global form, (i) the Depositary for such global
         Securities, (ii) whether beneficial owners of interests in any
         Securities of the series in global form may exchange such interests for
         certificated Securities of such series and of like tenor of any
         authorized form and denomination, and (iii) if other than as provided
         in Section 3.5, the circumstances under which any such exchange may
         occur;

                  (25) the designation of the initial Depositary;

                  (26) any restrictions on the registration, transfer or
         exchange of the Securities;

                  (27) the relative degree, if any, to which the Securities of
         the series shall be senior or subordinated to other series of
         Securities in right of payment, whether such other series of Securities
         are Outstanding or not;

                  (28) the terms of any right to convert or exchange Securities
         of the series into or for Equity Securities of the Company or other
         securities or property; and

                  (29) any other terms of the series (which terms shall not be
         inconsistent with the provisions of this Indenture) including any terms
         which may be required by or advisable under United States laws or
         regulations or advisable in connection with the marketing of Securities
         of the series.

                                       20
<PAGE>   27

         (c) All Securities of any one series and coupons, if any, appertaining
to any Bearer Securities of such series shall be substantially identical except,
in the case of Registered Securities, as to denomination and except as may
otherwise be provided (i) by a Board Resolution, (ii) by action taken pursuant
to a Board Resolution and (subject to Section 3.3) set forth, or determined in
the manner provided, in the related Officers' Certificate or (iii) in an
indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders, for issuances of additional
Securities of such series.

         (d) If any of the terms of the Securities of any series are established
by action taken pursuant to a Board Resolution, a copy of such Board Resolution
shall be certified by the Corporate Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth, or providing the manner for determining,
the terms of the Securities of such series, and an appropriate record of any
action taken pursuant thereto in connection with the issuance of any Securities
of such series shall be delivered to the Trustee prior to the authentication and
delivery thereof.

         Section 3.2 Denominations. Unless otherwise provided as contemplated by
Section 3.1, any Registered Securities of a series shall be issuable in
denominations of $1,000 and any integral multiple thereof and any Bearer
Securities of a series shall be issuable in the denomination of $5,000.

         Section 3.3 Execution, Authentication, Delivery and Dating. Securities
shall be executed on behalf of the Company by two Officers. The Company's seal
shall be reproduced on the Securities. The signatures of any of these officers
on the Securities may be manual or facsimile. The coupons, if any, of Bearer
Securities shall bear the facsimile signature of two Officers.

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

         At any time and from time to time, the Company may deliver Securities,
together with any coupons appertaining thereto, of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities; provided,
however, that in the case of Securities offered in a Periodic Offering, the
Trustee shall authenticate and deliver such Securities from time to time in
accordance with such other procedures (including, without

                                       21
<PAGE>   28

limitation, the receipt by the Trustee of oral or electronic instructions from
the Company or its duly authorized agents, promptly confirmed in writing)
acceptable to the Trustee as may be specified by or pursuant to a Company Order
delivered to the Trustee prior to the time of the first authentication of
Securities of such series.

         If the form or terms of the Securities of a series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 2.1 and 3.1, in authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to section 315(a) through
(d) of the Trust Indenture Act) shall be fully protected in relying upon, an
Opinion of Counsel stating,

                  (1) if the forms of such Securities and any coupons have been
         established by or pursuant to a Board Resolution as permitted by
         Section 2.1, that such forms have been established in conformity with
         the provisions of this Indenture;

                  (2) if the terms of such Securities and any coupons have been
         established by or pursuant to a Board Resolution as permitted by
         Section 3.1, that such terms have been, or in the case of Securities of
         a series offered in a Periodic Offering, will be, established in
         conformity with the provisions of this Indenture, subject in the case
         of Securities offered in a Periodic Offering, to any conditions
         specified in such Opinion of Counsel; and

                  (3) that such Securities together with any coupons
         appertaining thereto, when authenticated and delivered by the Trustee
         and issued by the Company in the manner and subject to any conditions
         specified in such Opinion of Counsel, will constitute valid and legally
         binding obligations of the Company, enforceable in accordance with
         their terms, subject to bankruptcy, insolvency, fraudulent transfer,
         reorganization, moratorium and other similar laws of general
         applicability relating to or affecting the enforcement of creditors'
         rights and to general equity principles and except further as
         enforcement thereof may be limited by (A) requirements that a claim
         with respect to any Securities denominated other than in Dollars (or a
         Foreign Currency or currency unit judgment in respect of such claim) be
         converted into Dollars at a rate of exchange prevailing on a date
         determined pursuant to applicable law or (B) governmental authority to
         limit, delay or prohibit the making of payments in Foreign Currencies
         or currency units or payments outside the United States.

Notwithstanding that such form or terms have been so established, the Trustee
shall have the right to decline to authenticate such Securities if, in the
written opinion of counsel to the Trustee (which counsel may be an employee of
the Trustee), the issue of such Securities pursuant to this Indenture will
adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise in a manner which is not reasonably

                                       22
<PAGE>   29

acceptable to the Trustee. Notwithstanding the generality of the foregoing, the
Trustee will not be required to authenticate Securities denominated in a Foreign
Currency if the Trustee reasonably believes that it would be unable to perform
its duties with respect to such Securities.

         Notwithstanding the provisions of Section 3.1 and of the two preceding
paragraphs, if all of the Securities of any series are not to be issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to the two preceding paragraphs in connection with
the authentication of each Security of such series if such documents, with
appropriate modifications to cover such future issuances, are delivered at or
prior to the authentication upon original issuance of the first Security of such
series to be issued.

         With respect to Securities of a series offered in a Periodic Offering,
the Trustee may rely, as to the authorization by the Company of any of such
Securities, the form and terms thereof and the legality, validity, binding
effect and enforceability thereof, upon the Opinion of Counsel and the other
documents delivered pursuant to Sections 2.1 and 3.1 and this Section, as
applicable, in connection with the first authentication of Securities of such
series.

         If the Company shall establish pursuant to Section 3.1 that the
Securities of a series are to be issued in whole or in part in global form, then
the Company shall execute and the Trustee shall, in accordance with this Section
and the Company Order with respect to such series, authenticate and deliver one
or more Securities in global form that (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount of the
Outstanding Securities of such series to be represented by such Security or
Securities in global form, (ii) shall be registered, if a Registered Security,
in the name of the Depositary for such Security or Securities in global form or
the nominee of such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instruction and (iv) shall bear the
legend set forth in Section 2.4.

         Each Depositary designated pursuant to Section 3.1 for a Registered
Security in global form must, at the time of its designation and at all times
while it serves as Depositary, be a clearing agency registered under the
Securities Exchange Act of 1934 and any other applicable statute or regulation.
The Trustee shall have no responsibility to determine if the Depositary is so
registered. Each Depositary shall enter into an agreement with the Trustee
governing the respective duties and rights of such Depositary and the Trustee
with regard to Securities issued in global form.

         Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 3.1.

                                       23
<PAGE>   30

         No Security or coupon appertaining thereto shall be entitled to any
benefits under this Indenture or be valid or obligatory for any purpose until
authenticated by the manual signature of one of the authorized signatories of
the Trustee or an Authenticating Agent and no coupon shall be valid until the
Security to which it appertains has been so authenticated. Such signature upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered under this Indenture and is
entitled to the benefits of this Indenture. Except as permitted by Section 3.6
or 3.7, the Trustee shall not authenticate and deliver any Bearer Security
unless all appurtenant coupons for interest then matured have been detached and
cancelled.

         Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 3.9 together with a written statement (which need not comply
with Section 1.2 and need not be accompanied by an Opinion of Counsel) stating
that such Security has never been issued and sold by the Company, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall not be entitled to the benefits
of this Indenture.

         Section 3.4 Temporary Securities. Pending the preparation of definitive
Securities of any series, the Company may execute and, upon Company Order, the
Trustee shall authenticate and deliver temporary Securities of such series which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor and form, with or
without coupons, of the definitive Securities in lieu of which they are issued
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities and coupons, if
any. In the case of Securities of any series, such temporary Securities may be
in global form, representing all or a portion of the Outstanding Securities of
such series.

         Except in the case of temporary Securities in global form, each of
which shall be exchanged in accordance with the provisions thereof, if temporary
Securities of any series are issued, the Company will cause definitive
Securities of such series to be prepared without unreasonable delay. After
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company pursuant to Section 9.2 in a Place of Payment for such series,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series (accompanied by any unmatured coupons
appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor; provided, however, that no definitive Bearer

                                       24

<PAGE>   31

Security shall be delivered in exchange for a temporary Registered Security; and
provided further that no definitive Bearer Security shall be delivered in
exchange for a temporary Bearer Security unless the Trustee shall have received
from the person entitled to receive the definitive Bearer Security a certificate
substantially in the form approved in the Board Resolutions relating thereto and
such delivery shall occur only outside the United States. Until so exchanged,
the temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series
except as otherwise specified as contemplated by Section 3.1.

         Section 3.5 Registration, Transfer and Exchange. The Company shall
cause to be kept at the Corporate Trust Office of the Trustee or in any office
or agency to be maintained by the Company in accordance with Section 9.2 in a
Place of Payment a register (the "Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and the registration of transfers of
Registered Securities. The Register shall be in written form or any other form
capable of being converted into written form within a reasonable time. The
Trustee is hereby appointed "Registrar" for the purpose of registering
Registered Securities and transfers of Registered Securities as herein provided.

         Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency maintained pursuant to Section 9.2 in a
Place of Payment for that series, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Registered Securities of the same series, of any
authorized denominations and of a like aggregate principal amount containing
identical terms and provisions.

         Bearer Securities (except for any temporary global Bearer Securities)
or any coupons appertaining thereto (except for coupons attached to any
temporary global Bearer Security) shall be transferable by delivery.

         At the option of the Holder, Registered Securities of any series
(except a Registered Security in global form) may be exchanged for other
Registered Securities of the same series, of any authorized denominations and of
a like aggregate principal amount containing identical terms and provisions,
upon surrender of the Registered Securities to be exchanged at such office or
agency. Whenever any Registered Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Registered Securities which the Holder making the exchange is entitled to
receive. Unless otherwise specified as contemplated by Section 3.1, Bearer
Securities may not be issued in exchange for Registered Securities.

         Unless otherwise specified as contemplated by Section 3.1, at the
option of the Holder, Bearer Securities of such series may be exchanged for
Registered Securities (if the Securities of such series are issuable in
registered form) or Bearer Securities (if

                                       25
<PAGE>   32

Bearer Securities of such series are issuable in more than one denomination and
such exchanges are permitted by such series) of the same series, of any
authorized denominations and of like tenor and aggregate principal amount, upon
surrender of the Bearer Securities to be exchanged at any such office or agency,
with all unmatured coupons and all matured coupons in default thereto
appertaining. If the Holder of a Bearer Security is unable to produce any such
unmatured coupon or coupons or matured coupon or coupons in default, such
exchange may be effected if the Bearer Securities are accompanied by payment in
funds acceptable to the Company and the Trustee in an amount equal to the face
amount of such missing coupon or coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to any Paying Agent any such missing coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of such payment; provided, however, that, except as otherwise
provided in Section 9.2, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case any Bearer
Security of any series is surrendered at any such office or agency in exchange
for a Registered Security of the same series after the close of business at such
office or agency on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the coupon relating to such Interest
Payment Date or proposed date of payment, as the case may be (or, if such coupon
is so surrendered with such Bearer Security, such coupon shall be returned to
the person so surrendering the Bearer Security), and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such coupon, when due in accordance with the provisions of this
Indenture.

         Notwithstanding any other provision of this Section, unless and until
it is exchanged in whole or in part for Securities in certificated form, a
Security in global form representing all or a portion of the Securities of a
series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such series or a nominee of such
successor Depositary.

         If at any time the Depositary for the Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities of
such series shall no longer be eligible under Section 3.3, the Company shall
appoint a successor Depositary with respect to the

                                       26
<PAGE>   33

Securities of such series. If a successor Depositary for the Securities of such
series is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such ineligibility, the Company's election
pursuant to Section 3.1(b)(23) shall no longer be effective with respect to the
Securities of such series and the Company shall execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of certificated
Securities of such series of like tenor, shall authenticate and deliver,
Securities of such series of like tenor in certificated form, in authorized
denominations and in an aggregate principal amount equal to the principal amount
of the Security or Securities of such series of like tenor in global form in
exchange for such Security or Securities in global form.

         The Company may at any time in its sole discretion determine that
Securities issued in global form shall no longer be represented by such a
Security or Securities in global form. In such event the Company shall execute,
and the Trustee, upon receipt of a Company Order for the authentication and
delivery of certificated Securities of such series of like tenor, shall
authenticate and deliver, Securities of such series of like tenor in
certificated form, in authorized denominations and in an aggregate principal
amount equal to the principal amount of the Security or Securities of such
series of like tenor in global form in exchange for such Security or Securities
in global form.

         If specified by the Company pursuant to Section 3.1 with respect to a
series of Securities, the Depositary for such series may surrender a Security in
global form of such series in exchange in whole or in part for Securities of
such series in certificated form on such terms as are acceptable to the Company
and such Depositary. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge,

                  (i) to each Person specified by such Depositary a new
         certificated Security or Securities of the same series of like tenor,
         of any authorized denomination as requested by such Person in aggregate
         principal amount equal to and in exchange for such Person's beneficial
         interest in the Security in global form; and

                  (ii) to such Depositary a new Security in global form of like
         tenor in a denomination equal to the difference, if any, between the
         principal amount of the surrendered Security in global form and the
         aggregate principal amount of certificated Securities delivered to
         Holders thereof.

         Upon the exchange of a Security in global form for Securities in
certificated form, such Security in global form shall be cancelled by the
Trustee. Unless expressly provided with respect to the Securities of any series
that such Security may be exchanged for Bearer Securities, Securities in
certificated form issued in exchange for a Security in global form pursuant to
this Section shall be registered in such names and in such

                                       27
<PAGE>   34

authorized denominations as the Depositary for such Security in global form,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Securities to the
Persons in whose names such Securities are so registered.

         Whenever any Securities are surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.

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

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

         No service charge shall be made for any registration of transfer or for
any exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration or transfer or exchange of Securities, other
than exchanges pursuant to Section 3.4 or 10.7 not involving any transfer.

         The Company shall not be required (i) to issue, register the transfer
of, or exchange any Securities for a period beginning at the opening of business
15 days before any selection for redemption of Securities of like tenor and of
the series of which such Security is a part and ending at the close of business
on the earliest date on which the relevant notice of redemption is deemed to
have been given to all Holders of Securities of like tenor and of such series to
be redeemed; (ii) to register the transfer of or exchange any Registered
Security so selected for redemption, in whole or in part, except the unredeemed
portion of any Security being redeemed in part; or (iii) to exchange any Bearer
Security so selected for redemption, except that such a Bearer Security may be
exchanged for a Registered Security of that series and like tenor; provided that
such Registered Security shall be simultaneously surrendered for redemption.

         Section 3.6 Replacement Securities. If a mutilated Security or a
Security with a mutilated coupon appertaining to it is surrendered to the
Trustee, together with, in proper cases, such security or indemnity as may be
required by the Company or the Trustee to save each of them harmless, the
Company shall execute and the Trustee shall authenticate and deliver a
replacement Registered Security, if such surrendered Security was a

                                       28
<PAGE>   35

Registered Security, or a replacement Bearer Security with coupons corresponding
to the coupons appertaining to the surrendered Security, if such surrendered
Security was a Bearer Security, of the same series and date of maturity, if the
Trustee's requirements are met.

         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 or
Security with a destroyed, lost or stolen coupon 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 or coupon has been acquired by a bona fide purchaser,
the Company shall execute and the Trustee shall authenticate and deliver in lieu
of any such destroyed, lost or stolen Security or in exchange for the Security
to which a destroyed, lost or stolen coupon appertains (with all appurtenant
coupons not destroyed, lost or stolen), a replacement Registered Security, if
such Holder's claim appertains to a Registered Security, or a replacement Bearer
Security with coupons corresponding to the coupons appertaining to the
destroyed, lost or stolen Bearer Security or the Bearer Security to which such
lost, destroyed or stolen coupon appertains, if such Holder's claim appertains
to a Bearer Security, of the same series and principal amount, containing
identical terms and provisions and bearing a number not contemporaneously
outstanding with coupons corresponding to the coupons, if any, appertaining to
the destroyed, lost or stolen Security.

         In case any such mutilated, destroyed, lost or stolen Security or
coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security or coupon, pay such Security
or coupon; provided, however, that payment of principal of and any premium or
interest on Bearer Securities shall, except as otherwise provided in Section
9.2, be payable only at an office or agency located outside the United States
and, unless otherwise specified as contemplated by Section 3.1, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.

         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 with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupon, if any, or the destroyed, lost or stolen coupon, shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture

                                       29
<PAGE>   36

equally and proportionately with any and all other Securities of that securities
and their coupons, if any, 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 or coupons.

         Section 3.7 Payment of Interest; Interest Rights Preserved.

         (a) Unless otherwise provided as contemplated by Section 3.1, interest,
if any, on any Registered Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest at the
office or agency maintained for such purpose pursuant to 9.2; provided, however,
that at the option of the Company, interest on any series of Registered
Securities that bear interest may be paid (i) by check mailed to the address of
the Person entitled thereto as it shall appear on the Register of Holders of
Securities of such series or (ii) at the expense of the Company, by wire
transfer to an account maintained by the Person entitled thereto as specified in
the Register of Holders of Securities of such series.

         Unless otherwise provided as contemplated by Section 3.1, (i) interest,
if any, on Bearer Securities shall be paid only against presentation and
surrender of the coupons for such interest installments as are evidenced thereby
as they mature and (ii) original issue discount, if any, on Bearer Securities
shall be paid only against presentation and surrender of such Securities; in
either case at the office of a Paying Agent located outside the United States,
unless the Company shall have otherwise instructed the Trustee in writing
provided that any such instruction for payment in the United States does not
cause any Bearer Security to be treated as a "registration-required obligation"
under United States laws and regulations. The interest, if any, on any temporary
Bearer Security shall be paid, as to any installment of interest evidenced by a
coupon attached thereto only upon presentation and surrender of such coupon and,
as to other installments of interest, only upon presentation of such Security
for notation thereon of the payment of such interest. If at the time a payment
of principal of or interest, if any, on a Bearer Security or coupon shall become
due, the payment of the full amount so payable at the office or offices of all
the Paying Agents outside the United States is illegal or effectively precluded
because of the imposition of exchange controls or other similar restrictions on
the payment of such amount in Dollars, then the Company may instruct the Trustee
in writing to make such payments at a Paying Agent located in the United States,
provided that provision for such payment in the United States would not cause
such Bearer Security to be treated as a "registration-required obligation" under
United States laws and regulations.

                                       30
<PAGE>   37

         (b) Unless otherwise provided as contemplated by Section 3.1, any
interest on Registered Securities of any series which is payable, but is not
punctually paid or duly provided for, on any interest payment date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holders
on the relevant Regular Record Date by virtue of their having been such Holders,
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:

                  (1) The Company may elect to make payment of such Defaulted
         Interest to the Persons in whose names such Registered Securities (or
         their respective Predecessor Securities) are registered at the close of
         business on a Special Record Date for the payment of such Defaulted
         Interest, which shall be fixed in the following manner. The Company
         shall deposit with the Trustee an amount of money equal to the
         aggregate amount proposed to be paid in respect of such Defaulted
         Interest or shall make arrangements satisfactory to the trustee for
         such deposit prior to the date of the proposed payment, such money when
         deposited to be held in trust for the benefit of the Persons entitled
         to such Defaulted Interest as in this clause (1) provided. Thereupon
         the Trustee shall fix a Special Record Date for the payment of such
         Defaulted Interest which shall be not more than 15 days and not less
         than 10 days prior to the date of the proposed payment and not less
         than 10 days after the receipt by the Trustee of the notice of the
         proposed payment. The Trustee shall promptly notify the Company of such
         Special Record Date and, in the name and at the expense of the Company,
         shall cause notice of the proposed payment of such Defaulted Interest
         and the Special Record Date therefor to be mailed, first-class postage
         prepaid, to each Holder of such Registered Securities at his address as
         it appears in the Register, not less than 10 days prior to such Special
         Record Date. Notice of the proposed payment of such Defaulted Interest
         and the Special Record Date therefor having been so mailed, such
         Defaulted Interest shall be paid to the Persons in whose names such
         Registered Securities (or their respective Predecessor Securities) are
         registered at the close of business on such Special Record Date and
         shall no longer be payable pursuant to the following clause (2).

                  (2) The Company may make payment of such Defaulted Interest to
         the Persons in whose names such Registered Securities (or their
         respective Predecessor Securities) are registered at the close of
         business on a specified date in any other lawful manner not
         inconsistent with the requirements of any securities exchange on which
         such Registered Securities may be listed, and upon such notice as may
         be required by such exchange, if, after notice given by the Company to
         the Trustee of the proposed payment pursuant to this clause (2), such
         manner of payment shall be deemed practicable by the Trustee.

         (c) Subject to the foregoing provisions of this Section and Section
3.5, each Security delivered under this Indenture upon registration of transfer
of or in exchange for

                                       31
<PAGE>   38

or in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.

         Section 3.8 Persons Deemed Owners. Prior to due presentment of any
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Registered Security for
the purpose of receiving payment of principal of, premium, if any, and (subject
to Section 3.7) interest on such Registered Security and for all other purposes
whatsoever, whether or not such Registered Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

         The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of any Bearer Security and the bearer of any coupon as the
absolute owner of such Bearer Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Bearer Security or coupon be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

         None of the Company, the Trustee or any agent of the Company or the
Trustee shall have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a
Security in global form, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests. Notwithstanding the
foregoing, with respect to any Security in global form, nothing herein shall
prevent the Company or the Trustee, or any agent of the Company or the Trustee,
from giving effect to any written certification, proxy or other authorization
furnished by any Depositary (or its nominee), as a Holder, with respect to such
Security in global form or impair, as between such Depositary and owners of
beneficial interests in such Security in global form, the operation of customary
practices governing the exercise of the rights of such Depositary (or its
nominee) as Holder of such Security in global form.

         Section 3.9 Cancellation. The Company at any time may deliver
Securities and coupons to the Trustee for cancellation. The Registrar and any
Paying Agent shall forward to the Trustee any Securities and coupons surrendered
to them for replacement, for registration of transfer, or for exchange or
payment. The Trustee shall cancel all Securities and coupons surrendered for
replacement, for registration of transfer, or for exchange, payment, redemption
or cancellation and shall dispose of cancelled Securities and coupons and, at
the request of the Company, shall issue a certificate of destruction to the
Company. The Company may not issue new Securities to replace Securities that it
has paid or delivered to the Trustee for cancellation.

                                       32
<PAGE>   39

         Section 3.10 Computation of Interest. Except as otherwise specified as
contemplated by Section 3.1, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

         Section 3.11 CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, in such case, 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
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.

         Section 3.12 Currency and Manner of Payment in Respect of Securities.

         (a) Unless otherwise specified with respect to any Securities pursuant
to Section 3.1, with respect to Registered Securities of any series not
permitting the election provided for in paragraph (b) below or the Holders of
which have not made the election provided for in paragraph (b) below, and with
respect to Bearer Securities of any series, except as provided in paragraph (d)
below, payment of the principal of, premium, if any, and interest, if any, on
any Registered or Bearer Security of such series will be made in the currency or
currencies or currency unit or units in which such Registered Security or Bearer
Security, as the case may be, is payable. The provisions of this Section 3.12
may be modified or superseded pursuant to Section 3.1 with respect to any
Securities.

         (b) It may be provided pursuant to Section 3.1, with respect to
Registered Securities of any series, that Holders shall have the option, subject
to paragraphs (d) and (e) below, to receive payments of principal of, premium,
if any, or interest, if any, on such Registered Securities in any of the
currencies or currency units which may be designated for such election by
delivering to the Trustee (or the applicable Paying Agent) a written election
with signature guarantees and in the applicable form established pursuant to
Section 3.1, not later than the close of business on the Election Date
immediately preceding the applicable payment date. If a Holder so elects to
receive such payments in any such currency or currency unit, such election will
remain in effect for such Holder or any transferee of such Holder until changed
by such Holder or such transferee by written notice to the Trustee (or any
applicable Paying Agent) for such series of Registered Securities (but any such
change must be made not later than the close of business on the Election Date
immediately preceding the next payment date to be effective for the payment to
be made on such payment date, and no such change of election may be made with
respect to payments to be made on any Registered Security of such series with
respect to which an Event of Default has occurred or with respect to which the
Company has deposited funds pursuant to Article 4 or with respect to which a
notice of redemption has been given by the Company). Any Holder of any such

                                       33
<PAGE>   40

Registered Security who shall not have delivered any such election to the
Trustee (or any applicable Paying Agent) not later than the close of business on
the applicable Election Date will be paid the amount due on the applicable
payment date in the relevant currency or currency unit as provided in Section
3.12(a). The Trustee (or the applicable Paying Agent) shall notify the Exchange
Rate Agent as soon as practicable after the Election Date of the aggregate
principal amount of Registered Securities for which Holders have made such
written election.

         (c) If the election referred to in paragraph (b) above has been
provided for with respect to any Registered Securities of a series pursuant to
Section 3.1, then, unless otherwise specified pursuant to Section 3.1 with
respect to any such Registered Securities, not later than the fourth Business
Day after the Election Date for each payment date for such Registered
Securities, the Exchange Rate Agent will deliver to the Company a written notice
specifying, in the currency or currencies or currency unit or units in which
Registered Securities of such series are payable, the respective aggregate
amounts of principal of, premium, if any, and interest, if any, on such
Registered Securities to be paid on such payment date, and specifying the
amounts in such currency or currencies or currency unit or units so payable in
respect of such Registered Securities as to which the Holders of Registered
Securities denominated in any currency or currencies or currency unit or units
shall have elected to be paid in another currency or currency unit as provided
in paragraph (b) above. If the election referred to in paragraph (b) above has
been provided for with respect to any Registered Securities of a series pursuant
to Section 3.1, and if at least one Holder has made such election, then, unless
otherwise specified pursuant to Section 3.1, on the second Business Day
preceding such payment date the Company will deliver to the Trustee (or the
applicable Paying Agent) an Exchange Rate Officers' Certificate in respect of
the Dollar, Foreign Currency or Currencies, ECU or other currency unit payments
to be made on such payment date. Unless otherwise specified pursuant to Section
3.1, the Dollar, Foreign Currency or Currencies, ECU or other currency unit
amount receivable by Holders of Registered Securities who have elected payment
in a currency or currency unit as provided in paragraph (b) above shall be
determined by the Company on the basis of the applicable Market Exchange Rate in
effect on the second Business Day (the "Valuation Date") immediately preceding
each payment date, and such determination shall be conclusive and binding for
all purposes, absent manifest error.

         (d) If a Conversion Event occurs with respect to a Foreign Currency,
ECU or any other currency unit in which any of the Securities are denominated or
payable otherwise than pursuant to an election provided for pursuant to
paragraph (b) above, then, with respect to each date for the payment of
principal of, premium, if any, and interest, if any, on the applicable
Securities denominated or payable in such Foreign Currency, ECU or such other
currency unit occurring after the last date on which such Foreign Currency, ECU
or such other currency unit was used (the "Conversion Date"), the Dollar shall
be the currency of payment for use on each such payment date (but such Foreign
Currency,

                                       34
<PAGE>   41

ECU or such other currency unit that was previously the currency of payment
shall, at the Company's election, resume being the currency of payment on the
first such payment date preceded by 15 Business Days during which the
circumstances which gave rise to the Dollar becoming such currency no longer
prevail). Unless otherwise specified pursuant to Section 3.1, the Dollar amount
to be paid by the Company to the Trustee or any applicable Paying Agent and by
the Trustee or any applicable Paying Agent to the Holders of such Securities
with respect to such payment date shall be, in the case of a Foreign Currency
other than a currency unit, the Dollar Equivalent of the Foreign Currency or, in
the case of a Foreign Currency that is a currency unit, the Dollar Equivalent of
the Currency Unit, in each case as determined by the Exchange Rate Agent in the
manner provided in paragraph (f) or (g) below.

         (e) Unless otherwise specified pursuant to Section 3.1, if the Holder
of a Registered Security denominated in any currency or currency unit shall have
elected to be paid in another currency or currency unit or in other currencies
as provided in paragraph (b) above, and (i) a Conversion Event occurs with
respect to any such elected currency or currency unit, such Holder shall receive
payment in the currency or currency unit in which payment would have been made
in the absence of such election and (ii) if a Conversion Event occurs with
respect to the currency or currency unit in which payment would have been made
in the absence of such election, such Holder shall receive payment in Dollars as
provided in paragraph (d) of this Section 3.12 (but, subject to any contravening
valid election pursuant to paragraph (b) above, the elected payment currency or
currency unit, in the case of the circumstances described in clause (i) above,
or the payment currency or currency unit in the absence of such election, in the
case of the circumstances described in clause (ii) above, shall, at the
Company's election, resume being the currency or currency unit of payment with
respect to Holders who have so elected, but only with respect to payments on
payment dates preceded by 15 Business Days during which the circumstances which
gave rise to such currency or currency unit, in the case of the circumstances
described in clause (i) above, or the Dollar, in the case of the circumstances
described in clause (ii) above, as applicable, becoming the currency or currency
unit of payment, no longer prevail).

         (f) The "Dollar Equivalent of the Foreign Currency" shall be determined
by the Exchange Rate Agent and shall be obtained for each subsequent payment
date by the Exchange Rate Agent by converting the specified Foreign Currency
into Dollars at the Market Exchange Rate on the Conversion Date.

         (g) The "Dollar Equivalent of the Currency Unit" shall be determined by
the Exchange Rate Agent and, subject to the provisions of paragraph (h) below,
shall be the sum of each amount obtained by converting the Specified Amount of
each Component Currency (as each such term is defined in paragraph (h) below)
into Dollars at the Market Exchange Rate for such Component Currency on the
Valuation Date with respect to each payment.

                                       35
<PAGE>   42

         (h) For purposes of this Section 3.12 the following terms shall have
the following meanings:

         A "Component Currency" shall mean any currency which, on the Conversion
Date, was a component currency of the relevant currency unit, including, but not
limited to, ECU.

         "Election Date" shall mean the Regular Record Date for the applicable
series of Registered Securities as specified pursuant to Section 3.1 by which
the written election referred to in Section 3.12(b) may be made.

         A "Specified Amount" of a Component Currency shall mean the number of
units of such Component Currency or fractions thereof which such Component
Currency represented in the relevant currency unit, including, but not limited
to, ECU, on the Conversion Date. If after the Conversion Date the official unit
of any Component Currency is altered by way of combination or subdivision, the
Specified Amount of such Component Currency shall be divided or multiplied in
the same proportion. If after the Conversion Date two or more Component
Currencies are consolidated into a single currency, the respective Specified
Amounts of such Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the respective Specified Amounts of such
consolidated Component Currencies expressed in such single currency, and such
amount shall thereafter be a Specified Amount and such single currency shall
thereafter be a Component Currency. If after the Conversion Date any Component
Currency shall be divided into two or more currencies, the Specified Amount of
such Component Currency shall be replaced by specified amounts of such two or
more currencies, the sum of which, at the Market Exchange Rate of such two or
more currencies on the date of such replacement, shall be equal to the Specified
Amount of such former Component Currency and such amounts shall thereafter be
Specified Amounts and such currencies shall thereafter be Component Currencies.
If, after the Conversion Date of the relevant currency unit, including, but not
limited to, ECU, a Conversion Event (other than any event referred to above in
this definition of "Specified Amount") occurs with respect to any Component
Currency of such currency unit and is continuing on the applicable Valuation
Date, the Specified Amount of such Component Currency shall, for purposes of
calculating the Dollar Equivalent of the Currency Unit, be converted into
Dollars at the Market Exchange Rate in effect on the Conversion Date of such
Component Currency.

         All decisions and determinations of the Exchange Rate Agent regarding
the Dollar Equivalent of the Foreign Currency, the Dollar Equivalent of the
Currency Unit, the Market Exchange Rate and changes in the Specified Amounts as
specified above shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive for all purposes and irrevocably binding upon the
Company, the Trustee (and any applicable Paying Agent) and all Holders of
Securities denominated or payable in the relevant

                                       36
<PAGE>   43

currency, currencies or currency units. The Exchange Rate Agent shall promptly
give written notice to the Company and the Trustee of any such decision or
determination.

         In the event that the Company determines in good faith that a
Conversion Event has occurred with respect to a Foreign Currency, the Company
will promptly give written notice thereof to the Trustee (or any applicable
Paying Agent) and to the Exchange Rate Agent (and the Trustee (or such Paying
Agent) will promptly thereafter give notice in the manner provided in Section
1.6 to the affected Holders) specifying the Conversion Date. In the event the
Company so determines that a Conversion Event has occurred with respect to ECU
or any other currency unit in which Securities are denominated or payable, the
Company will promptly give written notice thereof to the Trustee (or any
applicable Paying Agent) and to the Exchange Rate Agent (and the Trustee (or
such Paying Agent)) will promptly thereafter give notice in the manner provided
in Section 1.6 to the affected Holders) specifying the Conversion Date and the
Specified Amount of each Component Currency on the Conversion Date. In the event
the Company determines in good faith that any subsequent change in any Component
Currency as set forth in the definition of Specified Amount above has occurred,
the Company will similarly give written notice to the Trustee (or any applicable
Paying Agent) and to the Exchange Rate Agent.

         The Trustee of the appropriate series of Securities shall be fully
justified and protected in relying and acting upon information received by it
from the Company and the Exchange Rate Agent and shall not otherwise have any
duty or obligation to determine the accuracy or validity of such information
independent of the Company or the Exchange Rate Agent.

         Section 3.13 Appointment and Resignation of Exchange Rate Agent.

         (a) Unless otherwise specified pursuant to Section 3.1, if and so long
as the Securities of any series (i) are denominated in a currency other than
Dollars or (ii) may be payable in a currency other than Dollars, or so long as
it is required under any other provision of this Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one Exchange Rate Agent. The Company will cause the Exchange Rate Agent
to make the necessary foreign exchange determinations at the time and in the
manner specified pursuant to Section 3.12 for the purpose of determining the
applicable rate of exchange and, if applicable, for the purpose of converting
the issued currency or currencies or currency unit or units into the applicable
payment currency or currency unit for the payment of principal, premium, if any,
and interest, if any, pursuant to Section 3.12.

         (b) No resignation of the Exchange Rate Agent and no appointment of a
successor Exchange Rate Agent pursuant to this Section shall become effective
until the acceptance of appointment by the successor Exchange Rate Agent as
evidenced by a

                                       37
<PAGE>   44

written instrument delivered to the Company and the Trustee of the appropriate
series of Securities accepting such appointment executed by the successor
Exchange Rate Agent.

         (c) If the Exchange Rate Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Exchange
Rate Agent for any cause, with respect to the Securities of one or more series,
the Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Exchange Rate Agent or Exchange Rate Agents with respect to the
Securities of that or those series (it being understood that any such successor
Exchange Rate Agent may be appointed with respect to the Securities of one or
more or all of such series and that, unless otherwise specified pursuant to
Section 3.1, at any time there shall only be one Exchange Rate Agent with
respect to the Securities of any particular series that are originally issued by
the Company on the same date and that are initially denominated and/or payable
in the same currency or currencies or currency unit or units).

                                   ARTICLE 4

                     Satisfaction, Discharge and Defeasance

         Section 4.1 Termination of Company's Obligations Under the Indenture.

         (a) This Indenture shall upon a Company Request cease to be of further
effect with respect to Securities of or within any series and any coupons
appertaining thereto (except as to any surviving rights of registration of
transfer or exchange of such Securities and replacement of such Securities which
may have been lost, stolen or mutilated as herein expressly provided for) and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to such
Securities and any coupons appertaining thereto when

                  (1) either

                           (A) all such Securities previously authenticated and
                  delivered and all coupons appertaining thereto (other than (i)
                  such coupons appertaining to Bearer Securities surrendered in
                  exchange for Registered Securities and maturing after such
                  exchange, surrender of which is not required or has been
                  waived as provided in Section 3.5, (ii) such Securities and
                  coupons which have been destroyed, lost or stolen and which
                  have been replaced or paid as provided in Section 3.6, (iii)
                  such coupons appertaining to Bearer Securities called for
                  redemption and maturing after the relevant Redemption Date,
                  surrender of which has been waived as provided in Section 10.6
                  and (iv) such Securities and coupons for whose payment money
                  has theretofore been deposited in trust or segregated and held
                  in trust by the Company and thereafter repaid to the Company
                  or discharged

                                       38
<PAGE>   45

                  from such trust, as provided in Section 9.3) have been
                  delivered to the Trustee for cancellation; or

                           (B) all Securities of such series and, in the case of
                  (i) or (ii) below, any coupons appertaining thereto not
                  theretofore delivered to the Trustee for cancellation

                                    (i) have become due and payable, or

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

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

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

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

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

         Notwithstanding the satisfaction and discharge of this Indenture, the
obligation of the Company to the Trustee and any predecessor Trustee under
Section 6.9, the obligations of the Company to any Authenticating Agent under
Section 6.14 and, if money shall have been deposited with the Trustee pursuant
to subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 4.2 and the last paragraph of Section 9.3 shall survive.

         Section 4.2 Application of Trust Funds. Subject to the provisions of
the last paragraph of Section 9.3, all money deposited with the Trustee pursuant
to Section 4.1

                                       39
<PAGE>   46

shall be held in trust and applied by it, in accordance with the provisions of
the Securities, the coupons 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, premium, if any and any interest for whose payment such money has
been deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.

         Section 4.3 Applicability of Defeasance Provisions; Company's Option to
Effect Defeasance or Covenant Defeasance. If pursuant to Section 3.1 provision
is made for either or both of (i) defeasance of the Securities of or within a
series under Section 4.4 or (ii) covenant defeasance of the Securities of or
within a series under Section 4.5, then the provisions of such Section or
Sections, as the case may be, together with the provisions of Sections 4.6
through 4.9 inclusive, with such modifications thereto as may be specified
pursuant to Section 3.1 with respect to any Securities, shall be applicable to
such Securities and any coupons appertaining thereto, and the Company may at its
option by Board Resolution, at any time, with respect to such Securities and any
coupons appertaining thereto, elect to have Section 4.4 (if applicable) or
Section 4.5 (if applicable) be applied to such Outstanding Securities and any
coupons appertaining thereto upon compliance with the conditions set forth below
in this Article.

         Section 4.4 Defeasance and Discharge. Upon the Company's exercise of
the option specified in Section 4.3 applicable to this Section with respect to
the Securities of or within a series, the Company shall be deemed to have been
discharged from its obligations with respect to such Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 4.6 are
satisfied (hereinafter "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and any coupons appertaining thereto
which shall thereafter be deemed to be "Outstanding" only for the purposes of
Section 4.7 and the other Sections of this Indenture referred to in clause (ii)
of this Section, and to have satisfied all its other obligations under such
Securities and any coupons appertaining thereto and this Indenture insofar as
such Securities and any coupons appertaining thereto are concerned (and the
Trustee, at the expense of the Company, shall on a Company Order execute proper
instruments acknowledging the same), except the following which shall survive
until otherwise terminated or discharged hereunder: (i) the rights of Holders of
such Securities and any coupons appertaining thereto to receive, solely from the
trust funds described in Section 4.6(a) and as more fully set forth in such
Section, payments in respect of the principal of, premium, if any, and interest,
if any, on such Securities or any coupons appertaining thereto when such
payments are due; (ii) the Company's obligations with respect to such Securities
under Sections 3.5, 3.6, 9.2 and 9.3 and with respect to the payment of
additional amounts, if any, payable with respect to such Securities as specified
pursuant to Section 3.1(b)(17); (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and

                                       40
<PAGE>   47

(iv) this Article 4. Subject to compliance with this Article 4, the Company may
exercise its option under this Section notwithstanding the prior exercise of its
option under Section 4.5 with respect to such Securities and any coupons
appertaining thereto. Following a defeasance, payment of such Securities may not
be accelerated because of an Event of Default.

         Section 4.5 Covenant Defeasance. Upon the Company's exercise of the
option specified in Section 4.3 applicable to this Section with respect to any
Securities of or within a series, the Company shall be released from its
obligations under Sections 7.1, 9.4, 9.5, 9.9 and 9.10 and, if specified
pursuant to Section 3.1, its obligations under any other covenant, with respect
to such Securities and any coupons appertaining thereto on and after the date
the conditions set forth in Section 4.6 are satisfied (hereinafter, "covenant
defeasance"), and such Securities and any coupons appertaining thereto shall
thereafter be deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with Sections 7.1, 9.4, 9.5, 9.9 and 9.10 or such other
covenant, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to such Securities and any coupons appertaining thereto, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such Section or such other covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
Section or such other covenant or by reason of reference in any such Section or
such other covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 5.1(3) or 5.1(7) or otherwise, as the case may be, but, except as
specified above, the remainder of this Indenture and such Securities and any
coupons appertaining thereto shall be unaffected thereby.

         Section 4.6 Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of Section 4.4 or Section 4.5
to any Securities of or within a series and any coupons appertaining thereto:

         (a) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee (or another trustee satisfying the requirements of
Section 6.12 who shall agree to comply with, and shall be entitled to the
benefits of, the provisions of Sections 4.3 through 4.9 inclusive and the last
paragraph of Section 9.3 applicable to the Trustee, for purposes of such
Sections also a "Trustee") as trust funds in trust for the purpose of making the
payments referred to in clauses (x) and (y) of this Section 4.6(a), specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of
such Securities and any coupons appertaining thereto, with instructions to the
Trustee as to the application thereof, (A) money in an amount (in such currency,
currencies or currency unit or units in which such Securities and any coupons
appertaining thereto are then specified as payable at Maturity), or (B) if
Securities of such series are not subject to

                                       41
<PAGE>   48

repayment at the option of Holders, Government Obligations which through the
payment of interest and principal in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any payment
referred to in clause (x) or (y) of this Section 4.6(a), money in an amount or
(C) a combination thereof in an amount, 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, and which shall be applied by the Trustee to pay and discharge, (x)
the principal of, premium, if any, and interest, if any, on such Securities and
any coupons appertaining thereto on the Maturity of such principal or
installment of principal or interest and (y) any mandatory sinking fund payments
applicable to such Securities on the day on which such payments are due and
payable in accordance with the terms of this Indenture and such Securities and
any coupons appertaining thereto. Before such a deposit the Company may make
arrangements satisfactory to the Trustee for the redemption of Securities at a
future date or dates in accordance with Article 10 which shall be given effect
in applying the foregoing.

         (b) Such defeasance or covenant defeasance shall not result in a breach
or violation of, or constitute a Default or Event of Default under, this
Indenture or result in a breach or violation of, or constitute a default under,
any other material agreement or instrument to which the Company is a party or by
which it is bound.

         (c) In the case of an election under Section 4.4, the Company shall
have delivered to the Trustee an Officers' Certificate and 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 such Securities and any coupons
appertaining thereto will not recognize income, gain or loss for Federal income
tax purposes as a result of such defeasance 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.

         (d) In the case of an election under Section 4.5, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Securities and any coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a result of
such covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred.

         (e) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 4.4 or the covenant defeasance under
Section 4.5 (as the case may be) have been complied with.

                                       42
<PAGE>   49

         (f) Such defeasance or covenant defeasance shall be effected in
compliance with any additional or substitute terms, conditions or limitations
which may be imposed on the Company in connection therewith as contemplated by
Section 3.1.

         Section 4.7 Deposited Money and Government Obligations to Be Held in
Trust. Subject to the provisions of the last paragraph of Section 9.3, all money
and Government Obligations (or other property as may be provided pursuant to
Section 3.1) (including the proceeds thereof) deposited with the Trustee
pursuant to Section 4.6 in respect of any Securities of any series and any
coupons appertaining thereto shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and any coupons
appertaining thereto 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 Holders of such Securities and any coupons
appertaining thereto of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, if any, but such money need not be
segregated from other funds except to the extent required by law.

         Unless otherwise specified with respect to any Security pursuant to
Section 3.1, if, after a deposit referred to in Section 4.6(a) has been made,
(i) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 3.12(b) or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 4.6(a) has been made in respect of such
Security, or (ii) a Conversion Event occurs as contemplated in Section 3.12(d)
or 3.12(e) or by the terms of any Security in respect of which the deposit
pursuant to Section 4.6(a) has been made, the indebtedness represented by such
Security and any coupons appertaining thereto shall be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of,
premium, if any, and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable Market Exchange Rate for such currency or currency unit in
effect on the second Business Day prior to each payment date, except, with
respect to a Conversion Event, for such currency or currency unit in effect (as
nearly as feasible) at the time of the Conversion Event.

         Section 4.8 Repayment to Company. The Trustee (and any Paying Agent)
shall promptly pay to the Company upon Company Request any excess money or
securities held by them at any time.

         Section 4.9 Indemnity for Government Obligations. The Company shall
pay, and shall indemnify the Trustee against, any tax, fee or other charge
imposed on or assessed

                                       43
<PAGE>   50

against Government Obligations deposited pursuant to this Article or the
principal and interest received on such Government Obligations.

                                   ARTICLE 5

                              Defaults and Remedies

         Section 5.1 Events of Default. An "Event of Default" occurs with
respect to the Securities of any series if (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):

                  (1) the Company defaults in the payment of interest on any
         Security of that series or any coupon appertaining thereto or any
         additional amount payable with respect to any Security of that series
         as specified pursuant to Section 3.1(b)(17) when the same becomes due
         and payable and such default continues for a period of 30 days;

                  (2) the Company defaults in the payment of the principal of or
         any premium on any Security of that series when the same becomes due
         and payable at its Maturity or on redemption or otherwise, or in the
         payment of a mandatory sinking fund payment when and as due by the
         terms of the Securities of that series;

                  (3) the Company fails to comply in any material respect with
         any of its agreements or covenants in, or any of the provisions of,
         this Indenture with respect to any Security of that series (other than
         an agreement, covenant or provision for which non-compliance is
         elsewhere in this Section specifically dealt with), and such
         non-compliance continues 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 the 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;

                  (4) the Company pursuant to or within the meaning of any
         Bankruptcy Law (A) commences a voluntary case, (B) consents to the
         entry of an order for relief against it in an involuntary case, (C)
         consents to the appointment of a Custodian of it or for all or
         substantially all of its property; or (D) makes a general assignment
         for the benefit of its creditors;

                                       44
<PAGE>   51

                  (5) a court of competent jurisdiction enters an order or
         decree under any Bankruptcy Law that (A) is for relief against the
         Company in an involuntary case, (B) appoints a Custodian of the Company
         or for all or substantially all of its property, or (C) orders the
         liquidation of the Company and the order or decree remains unstayed and
         in effect for 60 days; or

                  (6) any other Event of Default provided as contemplated by
         Section 3.1 with respect to Securities of that series.

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

         Section 5.2 Acceleration; Rescission and Annulment. If an Event of
Default with respect to the Securities of any series at the time Outstanding
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of all of the Outstanding Securities of that series,
by written notice to the Company (and, if given by the Holders, to the Trustee),
may declare the principal (or, if the Securities of that series are Original
Issue Discount Securities or Indexed Securities, such portion of the principal
amount as may be specified in the terms of that series) of and accrued interest,
if any, on all the Securities of that series to be due and payable and upon any
such declaration such principal (or, in the case of Original Issue Discount
Securities or Indexed Securities, such specified amount) and interest, if any,
shall be immediately due and payable.

         At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of that series, by written notice to the Trustee, may
rescind and annul such declaration and its consequences if all existing Defaults
and 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 5.7. No such rescission shall affect any subsequent default
or impair any right consequent thereon.

         Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if

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

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<PAGE>   52

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

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

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

         Section 5.4 Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Holders of Securities allowed
in any judicial proceedings relating to the Company, its creditors or its
property.

         Section 5.5 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.

         Section 5.6 Delay or Omission Not Waiver. No delay or omission by the
Trustee or any Holder of any Securities to exercise any right or remedy accruing
upon an Event of Default shall impair any such right or remedy or constitute a
waiver of or acquiescence in any such Event of Default.

         Section 5.7 Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of Outstanding Securities of any series by written
notice to the Trustee may waive on behalf of the Holders of all Securities of
such series a past Default or Event of Default with respect to that series and
its consequences except (i) a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on any Security of such series or any
coupon appertaining thereto or (ii) in respect of a covenant or provision hereof
which pursuant to Section 8.2 cannot be amended or modified without the consent
of the Holder of each Outstanding Security of such series adversely

                                       46
<PAGE>   53

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 5.8 Control by Majority. The Holders of a majority in aggregate
principal amount of the Outstanding Securities of each series affected (with
each such series voting as a class) 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 it with respect to
Securities of that series; provided, however, that (i) the Trustee may refuse to
follow any direction that conflicts with law or this Indenture, (ii) the Trustee
may refuse to follow any direction that is unduly prejudicial to the rights of
the Holders of Securities of such series not consenting, or that would in the
good faith judgment of the Trustee have a substantial likelihood of involving
the Trustee in personal liability and (iii) the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction.

         Section 5.9 Limitation on Suits by Holders. No Holder of any Security
of any series or any coupons appertaining thereto shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:

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

                  (2) the Holders of at least 25% in aggregate principal amount
         of the Outstanding Securities of that series have made a written
         request to the Trustee to institute proceedings in respect of such
         Event of Default in its own name as Trustee hereunder;

                  (3) such Holder or Holders have offered to the Trustee
         indemnity satisfactory to the Trustee against any loss, liability or
         expense to be, or which may be, incurred by the Trustee in pursuing the
         remedy;

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

                  (5) during such 60 day period, the Holders of a majority in
         aggregate principal amount of the Outstanding Securities of that series
         have not given to the Trustee a direction inconsistent with such
         written request.

         No one or more 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

                                       47
<PAGE>   54

any other of such Holders or to enforce any right under this Indenture, except
in the manner herein provided and for the equal and ratable benefit of all of
such Holders.

         Section 5.10 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, but subject to Section 9.2, the right of any
Holder of a Security or coupon to receive payment of principal of, premium, if
any, and, subject to Sections 3.5 and 3.7, interest on the Security, on or after
the respective due dates expressed in the Security (or, in case of redemption,
on the redemption dates), and the right of any Holder of a coupon to receive
payment of interest due as provided in such coupon, or, subject to Section 5.9,
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.

         Section 5.11 Application of Money Collected. If the Trustee collects
any money pursuant to this Article, it shall pay out the money 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, premium, if any, 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 Trustee for amounts due under Section 6.9;

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

                  Third: to the Company.

         The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 5.11. At least 15 days before such record date,
the Trustee shall mail to each holder and the Company a notice that states the
record date, the payment date and the amount to be paid.

         Section 5.12 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.

                                       48
<PAGE>   55

         Section 5.13 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.6, no right or
remedy herein conferred upon or reserved to the Trustee or 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.

                                   ARTICLE 6

                                   The Trustee

         Section 6.1 Certain Duties and Responsibilities of the Trustee.

         (a) Except during the continuance of an Event of Default, the Trustee's
duties and responsibilities under this Indenture shall be governed by Section
315(a) of the Trust Indenture Act.

         (b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture, and
shall 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.

         Section 6.2 Rights of Trustee. Subject to the provisions of the Trust
Indenture Act:

         (a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any document believed by it to be genuine and to have been
signed or presented by the proper party or parties. The Trustee need not
investigate any fact or matter stated in the document.

         (b) Any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto, to the
Trustee for authentication and delivery pursuant to Section 3.3, which shall be
sufficiently evidenced as provided therein) and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution.

         (c) Before the Trustee acts or refrains from acting, it may consult
with counsel or require an Officers' Certificate. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on a
Board Resolution, the advice of counsel

                                       49
<PAGE>   56

acceptable to the Trustee, a certificate of an Officer or Officers delivered
pursuant to Section 1.2, an Officers' Certificate or an Opinion of Counsel.

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

         (e) 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.

         (f) The Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or indemnity
deemed satisfactory by the Trustee against such risk or liability is not
reasonably assured to it.

         Section 6.3 Trustee May Hold Securities. The Trustee, any Paying Agent,
any Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and coupons and, subject
to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise deal with
the Company, an Affiliate or Subsidiary with the same rights it would have if it
were not Trustee, Paying Agent, Registrar or such other agent.

         Section 6.4 Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed upon in writing with the
Company.

         Section 6.5 Trustee's Disclaimer. The recitals contained herein and in
the Securities, except the Trustee's certificate of authentication, shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to
the validity or adequacy of this Indenture or the Securities or any coupon. The
Trustee shall not be accountable for the Company's use of the proceeds from the
Securities or for monies paid over to the Company pursuant to the Indenture.

         Section 6.6 Notice of Defaults. If a Default occurs and is continuing
with respect to the Securities of any series and if it is known to the Trustee,
the Trustee shall, within 90 days after the Default occurs, transmit by mail, in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act, notice of all Defaults known to it unless such Default shall have been
cured or waived; provided, however, that except in the case of a Default in
payment on the Securities of any series, the Trustee may withhold the notice if
and so long as a Responsible Officer in good faith determines that withholding
such notice is in the interests of Holders of Securities of that series; and

                                       50
<PAGE>   57

provided, further, that in the case of any Default of the character specified in
Section 5.1(3) with respect to Securities of such series, no such notice to
Holders shall be given until at least 60 days after the occurrence thereof.

         Section 6.7 Reports by Trustee to Holders. Within 60 days after each
May 15 of each year commencing with the first May 15 after the first issuance of
Securities pursuant to this Indenture, the Trustee shall transmit by mail to all
Holders of Securities as provided in Section 313(c) of the Trust Indenture Act a
brief report dated as of such May 15 if required by and in compliance with
Section 313(a) of the Trust Indenture Act.

         Section 6.8 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 Holders of Securities of each series. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee
semiannually on or before the last day of June and December in each year, 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, containing all the
information in the possession or control of the Registrar, the Company or any of
its Paying Agents other than the Trustee as to the names and addresses of
Holders of Securities of each such series. If there are Bearer Securities of any
series Outstanding, even if the Trustee is the Registrar, the Company shall
furnish to the Trustee such a list containing such information with respect to
Holders of such Bearer Securities only.

         Section 6.9 Compensation and Indemnity.

         (a) 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 in connection with the performance of its duties under this
Indenture, except any such expense as may be attributable to its negligence or
bad faith. Such expenses shall include the reasonable compensation and expenses
of the Trustee's agents and counsel.

         (b) The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability, damage, claim or reasonable expense including
taxes (other than taxes based upon or determined or measured by the income of
the Trustee) incurred by it arising out of or in connection with its acceptance
or administration of the trust or trusts hereunder, including the reasonable
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. 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.

                                       51
<PAGE>   58

         (c) The Company agrees to pay the fees and expenses of Trustee's
counsel in connection with the review, revision, preparation and delivery of
this Indenture on the date of the execution of this Indenture by check or wire
transfer payable to Haynes and Boone, LLP.

         (d) The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.

         (e) To secure the payment obligations of the Company pursuant to 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, premium, if any, and interest on particular Securities.

         When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.1(5) or Section 5.1(6), the expenses
(including the reasonable fees and expenses of its counsel) and the compensation
for the services are intended to constitute expenses of administration under any
applicable Federal or state bankruptcy, insolvency or other similar law.

         The provisions of this Section shall survive the resignation or removal
of the Trustee and the termination of this Indenture.

         Section 6.10 Replacement of Trustee.

         (a) The resignation or removal of the Trustee and the appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in Section 6.11.

         (b) The Trustee may resign at any time with respect to the Securities
of any series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 6.11 shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

         (c) The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series may remove the Trustee with respect to that
series by so notifying the Trustee and the Company and may appoint a successor
Trustee for such series with the Company's consent.

                                       52
<PAGE>   59

         (d) If at any time:

                  (1) the Trustee fails to comply with Section 310(b) of the
         Trust Indenture Act after written request therefor by the Company or by
         any Holder who has been a bona fide Holder of a Security for at least
         six months, or

                  (2) the Trustee shall cease to be eligible under Section
         310(a) of the Trust Indenture Act and shall fail to resign after
         written request therefor by the Company or by any Holder of a Security
         who has been a bona fide Holder of a Security for at least six months;
         or

                  (3) the Trustee becomes incapable of acting, is adjudged a
         bankrupt or an insolvent or a receiver or public officer takes charge
         of the Trustee or its property or affairs for the purpose of
         rehabilitation, conservation or liquidation,

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

         (e) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to Securities of one or more
series, the Company, by or pursuant to Board Resolution, shall promptly appoint
a successor Trustee with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 6.11. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 6.11, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.

                                       53
<PAGE>   60

         Section 6.11 Acceptance of Appointment by Successor.

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

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

                                       54
<PAGE>   61

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

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

         (e) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series in the
manner provided for notices to the Holders of Securities in Section 1.6. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust office. If the
Company fails to give such notice within thirty days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be given at the expense of the Company.

         Section 6.12 Eligibility; Disqualification. There shall at all times be
a Trustee hereunder which shall be eligible to act as Trustee under Section
310(a)(1) of the Trust Indenture Act and shall have a combined capital and
surplus of at least $75,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or the requirements of Federal,
State, Territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.

         Section 6.13 Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

                                       55
<PAGE>   62

         Section 6.14 Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue, exchange,
registration of transfer or partial redemption thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, a copy of which instrument shall
be promptly furnished to the Company. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and, except as may otherwise be provided pursuant to
Section 3.1, shall at all times be a bank or trust company or corporation
organized and doing business and in good standing under the laws of the United
States of America or of any State or the District of Columbia, authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $5,000,000 and subject to supervision or examination by Federal
or State authorities. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.

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

         An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a

                                       56
<PAGE>   63

successor Authenticating Agent which shall be acceptable to the Company and
shall give notice of such appointment to all Holders of Securities of the series
with respect to which such Authenticating Agent will serve in the manner set
forth in Section 1.6. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.

         The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its reasonable expenses
for its services under this Section.

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

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

                                      FIRST UNION NATIONAL BANK
                                           as Trustee

                                      By  _________________________________
                                          as Authenticating Agent

                                      By  _________________________________
                                          Authorized Signatory

                                   ARTICLE 7

                  Consolidation, Merger or Sale by the Company

         Section 7.1 Consolidation, Merger or Sale of Assets Permitted. The
Company shall not consolidate or merge with or into, or transfer or lease all or
substantially all of its assets to, any Person unless:

                  (1) the Person formed by or surviving any such consolidation
         or merger (if other than the Company), or to which such transfer or
         lease shall have been made, is a corporation organized and existing
         under the laws of the United States, any State thereof or the District
         of Columbia;

                                       57
<PAGE>   64

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

                  (3) immediately after giving effect to the transaction no
         Default or Event of Default exists.

         The Company shall deliver to the Trustee prior to the proposed
transaction an Officers' Certificate to the foregoing effect and an Opinion of
Counsel stating that the proposed transaction and such supplemental indenture
comply with this Indenture and that all conditions precedent to the consummation
of the transaction under this Indenture have been met.

         In the event of the assumption by a successor corporation as provided
in clause (2) above, such successor corporation shall succeed to and be
substituted for the Company hereunder and under the Securities and any coupons
appertaining thereto and all such obligations of the Company shall terminate.

                                   ARTICLE 8

                             Supplemental Indentures

         Section 8.1 Supplemental Indentures Without Consent of Holders. Without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into indentures
supplemental hereto, in form reasonably satisfactory to the Trustee, for any of
the following purposes:

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

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

                  (3) to add any additional Events of Default with respect to
         all or any series of Securities; or

                  (4) to add to or change any of the provisions of this
         Indenture to such extent as shall be necessary to facilitate the
         issuance of Bearer Securities

                                       58
<PAGE>   65

         (including, without limitation, to provide that Bearer Securities may
         be registrable as to principal only) or to facilitate the issuance of
         Securities in global form; or

                  (5) to change or eliminate any of the provisions of this
         Indenture, provided that any such change or elimination shall become
         effective only if it does not affect any Security Outstanding of any
         series created prior to the execution of such supplemental indenture
         that is entitled to the benefit of such provision; or

                  (6) to secure the Securities; or

                  (7) to establish the form or terms of Securities of any series
         as permitted by Sections 2.1 and 3.1; or

                  (8) to evidence and provide for the acceptance of appointment
         hereunder by a successor Trustee with respect to the Securities of one
         or more series and to add to or change any of the provisions of this
         Indenture as shall be necessary to provide for or facilitate the
         administration of the trusts hereunder by more than one Trustee,
         pursuant to the requirements of Section 6.11; or

                  (9) if allowed without penalty under applicable laws and
         regulations, to permit payment in the United States (including any of
         the states and the District of Columbia), its territories, its
         possessions and other areas subject to its jurisdiction of principal,
         premium, if any, or interest, if any, on Bearer Securities or coupons,
         if any; or

                  (10) to correct or supplement any provision herein which may
         be inconsistent with any other provision herein or to make any other
         provisions with respect to matters or questions arising under this
         Indenture, provided such action shall not adversely affect the
         interests of the Holders of Securities of any series; or

                  (11) to cure any ambiguity or correct any mistake.

         Section 8.2 Supplemental Indentures With Consent of Holders. With the
written consent of the Holders of a majority of the aggregate principal amount
of the Outstanding Securities adversely affected by such supplemental indenture
(with the Securities of each series voting as a class), the Company and the
Trustee may enter into an indenture or indentures supplemental hereto to add any
provisions to or to change or eliminate any provisions of this Indenture or of
any other indenture supplemental hereto or to modify the rights of the Holders
of such Securities; provided, however, that without the consent of the Holder of
each Outstanding Security affected thereby, a supplemental indenture under this
Section may not:

                                       59
<PAGE>   66

                  (1) change the Stated Maturity of the principal of or premium,
         if any, on, or any installment of principal of or premium, if any, or
         interest on, any Security, or reduce the principal amount thereof or
         the rate of interest thereon or any premium payable upon the redemption
         thereof, or change the manner in which the amount of any principal
         thereof or premium, if any, or interest thereon is determined or reduce
         the amount of the principal of any Original Issue Discount Security or
         Indexed Security that would be due and payable upon a declaration of
         acceleration of the Maturity thereof pursuant to Section 5.2, or change
         the currency (including composite currency) or currency unit in which
         any Securities or any premium or the interest thereon is payable, or
         impair the right to institute suit for the enforcement of any such
         payment on or after the Stated Maturity thereof (or, in the case of
         redemption, on or after the Redemption Date);

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

                  (3) change any obligation of the Company to maintain an office
         or agency in the places and for the purposes specified in Section 9.2;

                  (4) make any change in Section 5.7 or this 8.2(a) except to
         increase any percentage or to provide that certain other provisions of
         this Indenture cannot be modified or waived with the consent of the
         Holders of each Outstanding Security affected thereby; or

                  (5) modify the provisions of Article 12 of this Indenture with
         respect to the subordination of Outstanding Securities of any series in
         a manner adverse to the Holders thereof.

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

         It is not necessary under this Section 8.2 for the Holders to consent
to the particular form of any proposed supplemental indenture, but it is
sufficient if they consent to the substance thereof.

                                       60
<PAGE>   67

         Section 8.3 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 that complies with the Trust Indenture Act as then in
effect.

         Section 8.4 Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.

         Section 8.5 Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder and of any coupon appertaining
thereto shall be bound thereby.

         Section 8.6 Reference in Securities to Supplemental Indentures.
Securities, including any coupons, of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to this Article may,
and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities including any coupons of any series
so modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities including any coupons of such series.

                                   ARTICLE 9

                                    Covenants

         Section 9.1 Payment of Principal, Premium, if Any, and Interest. The
Company covenants and agrees for the benefit of the Holders of each series of
Securities that it will duly and punctually pay the principal of, premium, if
any, and interest together with additional amounts, if any, on the Securities of
that series in accordance with the terms of the Securities of such series, any
coupons appertaining thereto and this Indenture. An installment of principal,
premium, if any, or interest shall be considered paid on the date it is due if
the Trustee or Paying Agent holds on that date money designated for and
sufficient to pay the installment.

                                       61
<PAGE>   68

         Section 9.2 Maintenance of Office or Agency. If Securities of a series
are issued as Registered Securities, the Company will maintain in each Place of
Payment for any series of Securities an office or agency where Securities of
that series may be presented or surrendered for payment, where Securities of
that series may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Securities of
that series and this Indenture may be served. If Securities of a series are
issuable as Bearer Securities, the Company will maintain, (i) subject to any
laws or regulations applicable thereto, an office or agency in a Place of
Payment for that series which is located outside the United States where
Securities of that series and related coupons may be presented and surrendered
for payment; provided, however, that if the Securities of that series are listed
on The International Stock Exchange of the United Kingdom and the Republic of
Ireland Limited, the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent for the Securities of that series in
London, Luxembourg or any other required city located outside the United States,
as the case may be, so long as the Securities of that series are listed on such
exchange, and (ii) subject to any laws or regulations applicable thereto, an
office or agency in a Place of Payment for that series which is located outside
the United States, where Securities of that series may be surrendered for
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of any such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

         Unless otherwise specified as contemplated by Section 3.1, no payment
of principal, premium or interest on Bearer Securities shall be made at any
office or agency of the Company in the United States, by check mailed to any
address in the United States, by transfer to an account located in the United
States or upon presentation or surrender in the United States of a Bearer
Security or coupon for payment, even if the payment would be credited to an
account located outside the United States; provided, however, that, if the
Securities of a series are denominated and payable in Dollars, payment of
principal of and any premium or interest on any such Bearer Security shall be
made at the office of the Company's Paying Agent in the Borough of Manhattan,
The City of New York, if (but only if) payment in Dollars of the full amount of
such principal, premium or interest, as the case may be, at all offices or
agencies outside the United States maintained for the purpose by the Company in
accordance with this Indenture is illegal or effectively precluded by exchange
controls or other similar restrictions.

                                       62
<PAGE>   69

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

         Unless otherwise specified as contemplated by Section 3.1, the Trustee
shall initially serve as Paying Agent.

         Section 9.3 Money for Securities Payments to Be Held in Trust;
Unclaimed Money. If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of, premium, if any, or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, premium, if any, or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee in writing of its
action or failure so to act.

         The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:

                  (1) hold all sums held by it for the payment of the principal
         of, premium, if any, or interest on Securities of that series in trust
         for the benefit of the Persons entitled thereto until such sums shall
         be paid to such Persons or otherwise disposed of as herein provided;

                  (2) give the Trustee notice of any default by the Company (or
         any other obligor upon the Securities of that series) in the making of
         any payment of principal, premium, if any, or interest on the
         Securities; and

                  (3) at any time during the continuance of any such default,
         upon the written request of the Trustee, forthwith pay to the Trustee
         all sums so held in trust by such Paying Agent.

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

                                       63
<PAGE>   70

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

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

         Section 9.4 Corporate Existence. Subject to Article 7, the Company will
at all times do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and its rights and franchises;
provided that nothing in this Section 9.4 shall prevent the abandonment or
termination of any right or franchise of the Company if, in the opinion of the
Company, such abandonment or termination is in the best interests of the Company
and not prejudicial in any material respect to the Holders of the Securities.

         Section 9.5 Insurance. The Company covenants and agrees that it will
maintain, and cause each of its Subsidiaries to maintain, insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as are consistent with sound business practice for
corporations engaged in the same or a similar business similarly situated. In
lieu of the foregoing or in combination therewith, in case of itself or of any
one or more of its Subsidiaries, the Company will maintain or cause to be
maintained a system or systems of self-insurance which will accord with the
financially sound and approved practices of companies owning or operating
properties of a similar character and maintaining such systems. The Trustee
shall not be required to see that such insurance is effected or maintained.

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<PAGE>   71

         Section 9.6 Reports by the Company. The Company covenants:

         (a) to file with the Trustee, within 30 days after the Company is
required to file the same with the Commission, 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 Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934, as amended; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to section 13
of the Securities Exchange Act of 1934, as amended, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;

         (b) to file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants provided for in this Indenture, as may
be required from time to time by such rules and regulations; and

         (c) to transmit to all Holders of Securities, within 30 days after the
filing thereof with the Trustee, in the manner and to the extent provided in
section 313(c) of the Trust Indenture Act, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section 9.6, as may be required by rules and
regulations prescribed from time to time by the Commission.

         Section 9.7 Annual Review Certificate. The Company covenants and agrees
to deliver to the Trustee, within 120 days after the end of each fiscal year of
the Company, a certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his or her knowledge of
the Company's compliance with all conditions and covenants under this Indenture.
For purposes of this Section 9.7, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.

         Section 9.8 Books of Record and Account. The Company will keep proper
books of record and account, either on a consolidated or individual basis. The
Company shall cause its books of record and account to be examined, either on a
consolidated or individual basis, by one or more firms of independent public
accountants not less frequently than annually. The Company shall prepare its
financial statements in accordance with generally accepted accounting
principles.

                                       65
<PAGE>   72

         Section 9.9 Limitation on Liens.

         (a) The Company will not, nor will it permit any Restricted Subsidiary
to, (i) issue, assume or guarantee any Debt, if such Debt is secured by a
mortgage, pledge, security interest or lien (any mortgage, pledge, security
interest or lien being hereinafter in this Article 9 referred to as a "mortgage"
or "mortgages") upon, or (ii) directly or indirectly secure any outstanding Debt
by a mortgage upon, any Principal Property, now owned or hereafter acquired,
without in any such case effectively providing, concurrently with the issuance,
assumption or guarantee of any such Debt, or the granting of security with
respect to any such outstanding Debt, that the Securities (together with, if the
Company shall so determine, any other indebtedness of or guaranteed by the
Company or such Restricted Subsidiary ranking equally with the Securities and
then existing or thereafter created) shall be secured equally and ratably with
(or prior to) such Debt; provided, however, that the foregoing restriction shall
not apply to

                  (1) mortgages on any Principal Property acquired, constructed
         or improved by the Company or any Restricted Subsidiary after the date
         of this Indenture which are created or assumed contemporaneously with,
         or within 90 days after, such acquisition, construction or improvement
         to secure or provide for the payment of any part of the purchase price
         of such property or the cost of such construction or improvement
         incurred after the date of this Indenture, or, in addition to mortgages
         contemplated by clause (2) below, mortgages on any Principal Property
         existing at the time of acquisition thereof, provided that in the case
         of any such acquisition, construction or improvement the mortgage shall
         not apply to any property theretofore owned by the Company or any
         Restricted Subsidiary, other than in the case of any such construction
         or improvement, any theretofore unimproved real property on which the
         property so constructed, or the improvement, is located;

                  (2) mortgages on any Principal Property acquired from a
         corporation which is merged with or into the Company or a Restricted
         Subsidiary;

                  (3) mortgages to secure Debt of a Restricted Subsidiary to the
         Company or to another Restricted Subsidiary; and

                  (4) any extension, renewal or replacement (or successive
         extensions, renewals or replacements), in whole or in part, of any
         mortgage referred to in the foregoing clauses (1) to (3), inclusive;
         provided, however, that the principal amount of Debt secured thereby
         shall not exceed the principal amount of Debt so secured at the time of
         such extension, renewal or replacement, and that such extension,
         renewal or replacement shall be limited to all or part of the property
         which secured the mortgage so extended, renewed or replaced (plus
         improvements on such property).

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<PAGE>   73

         (b) Notwithstanding the provisions of subsection (a) of this Section
9.9, the Company or any Restricted Subsidiary may issue, assume or guarantee
secured Debt which would otherwise be subject to the foregoing restrictions in
an aggregate amount which, together with all other such Debt of the Company and
its Restricted Subsidiaries and the Attributable Debt in respect of Sale and
Lease-Back Transactions (as defined in Section 9.10) existing at such time
(other than Sale and Lease-Back Transactions permitted because the Company would
be entitled to incur Debt secured by a mortgage on the property to be leased
without equally and ratably securing the Securities pursuant to paragraph (a) of
this Section 9.9 and other than Sale and Lease-Back Transactions the proceeds of
which have been applied in accordance with the limitations on Sale and
Lease-Back Transactions set forth in paragraph (a) of Section 9.10), does not at
the time exceed 15% of the shareholders' equity in the Company and its
consolidated Subsidiary companies, as shown on the audited consolidated balance
sheet contained in the latest annual report to shareholders of the Company.

         (c) For the purposes of Sections 9.9 and 9.10,

                  (1) the following types of transactions, among others, shall
         not be deemed to create Debt secured by a mortgage:

                           (a) the sale or other transfer of (i) any minerals in
                  place for a period of time until, or in an amount such that,
                  the purchaser will realize therefrom a specified amount of
                  money (however determined) or a specified amount of such
                  minerals, or (ii) any other interest in property of the
                  character commonly referred to as a "production payment"; and

                           (b) mortgages in favor of the United States of
                  America, any of its territories or possessions, or any State
                  thereof, or any department, agency, instrumentality or
                  political subdivision of any thereof, or any department,
                  agency or instrumentality of any such political subdivision,
                  to secure partial progress, advance or other payments pursuant
                  to any contract or statute or to secure any indebtedness
                  incurred for the purpose of financing all or any part of the
                  purchase price or the cost of constructing or improving the
                  property subject to such mortgages;

                  (2) the term "Attributable Debt" shall mean, as of any
         particular time, the present value, discounted at a rate per annum
         equal to the weighted average of the interest rate(s) borne by the
         Securities, or, in the case of Original Issue Discount Securities, the
         Yield(s) to Maturity, compounded semi-annually, of the obligation of a
         lessee for rental payments (not including amounts payable by the lessee
         for maintenance, property taxes and insurance) during the remaining
         term of any lease (including any period for which such lease has been
         extended or may, at the option of the lessor, be extended);

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                  (3) the term "Principal Property" shall mean any mineral
         property, concentrator, smelter, refinery, or rod mill, located within
         the United States of America or its territories or possessions of the
         Company or any Restricted Subsidiary except any such property or plant
         which the Board of Directors by resolution declares is not of material
         importance to the total business conducted by the Company and its
         Restricted Subsidiaries as an entity;

                  (4) the term "Restricted Subsidiary" shall mean (i) any
         Subsidiary which owns or leases, directly or indirectly, a Principal
         Property and (ii) any Subsidiary which owns, directly or indirectly,
         stock or indebtedness of a Restricted Subsidiary, provided, however,
         that the term "Restricted Subsidiary" shall not mean any Subsidiary (x)
         engaged primarily in financing receivables, making loans, extending
         credit or other activities of a character conducted by a finance
         company or (y) which conducts substantially all of its business outside
         the United States of America and its territories or possessions or the
         principal assets of which are stock or indebtedness of corporations
         which conduct substantially all of their business outside the United
         States of America and its territories or possessions.

                  (5) the term "shareholders' equity in the Company and its
         consolidated Subsidiary companies" shall mean the consolidated capital
         stock, capital surplus, if any, and retained earnings of the Company
         and its consolidated Subsidiary companies, after deducting the cost of
         shares of the Company held in its treasury.

         Section 9.10 Limitation on Sale and Lease-Back.

         (a) The Company will not, nor will it permit any Restricted Subsidiary
to, enter into any arrangement with any person providing for the leasing by the
Company or a Restricted Subsidiary of any Principal Property (except for
temporary leases for a term of not more than three years), title to which
property has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such person (herein referred to as "Sale and Lease-Back
Transaction"), unless the proceeds of such sale or transfer are at least equal
to the fair value (as determined by the Board of Directors) of such property and
either (i) the Company or such Restricted Subsidiary would be entitled to incur
Debt secured by a mortgage on the property to be leased without equally and
ratably securing the Securities pursuant to Section 9.9 or (ii) the Company
shall, and in any such case the Company covenants that it will, apply an amount
equal to the fair value (as determined by the Board of Directors) of the
property so leased to the retirement (other than any mandatory retirement),
within 90 days of the effective date of any such Sale and Lease-Back
Transaction, of Debt of the Company which by its terms matures at, or is
extendible or renewable at the option of the obligor to, a date more than twelve
months after the date of the creation of such Debt and which ranks prior to or
on a parity with the Securities; provided, however, that the term Sale and
Lease-Back Transaction shall not include any arrangement with the United States
of America, any of its territories or possessions, or

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<PAGE>   75

any State thereof, or any department, agency, instrumentality or political
subdivision of any thereof, or any department, agency or instrumentality of any
such political subdivision, entered into for the purpose of financing all or any
part of the purchase price or the cost of constructing or improving the property
subject to such arrangement.

         (b) Notwithstanding the provisions of the preceding paragraph (a), the
Company or any Restricted Subsidiary may enter into any Sale and Lease-Back
Transaction which would otherwise be subject to the foregoing restrictions if
the amount of the Attributable Debt in respect of Sale and Lease-Back
Transactions for such transaction, together with all secured Debt of the Company
and its Restricted Subsidiaries and all other Attributable Debt in respect of
Sale and Lease-Back Transactions existing at such time (other than Sale and
Lease-Back Transactions permitted because the Company would be entitled to incur
Debt secured by a mortgage on the property to be leased without equally and
ratably securing the Securities and other than Sale and Lease-Back Transactions
the proceeds of which have been applied in accordance with clause (ii) of the
preceding paragraph (a)), does not at the time exceed 15% of the shareholders'
equity in the Company and its consolidated Subsidiary companies, as shown on the
audited consolidated balance sheet contained in the latest annual report to
shareholders of the Company.

                                   ARTICLE 10

                                   Redemption

         Section 10.1 Applicability of Article. Securities (including coupons,
if any) of any series which are redeemable before their Stated Maturity shall be
redeemable in accordance with their terms and (except as otherwise specified as
contemplated by Section 3.1 for Securities of any series) in accordance with
this Article.

         Section 10.2 Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Securities, including coupons, if any, shall be evidenced
by or pursuant to a Board Resolution. In the case of any redemption at the
election of the Company of less than all the Securities or coupons, if any, of
any series, the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities (i) prior
to the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture or (ii) pursuant to an election
of the Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.

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         Section 10.3 Selection of Securities to Be Redeemed. Unless otherwise
specified as contemplated by Section 3.1, if less than all the Securities
(including coupons, if any) of a series with the same terms are to be redeemed,
the Trustee, not more than 45 days prior to the redemption date, shall select
the Securities of the series to be redeemed in such manner as the Trustee shall
deem fair and appropriate. The Trustee shall make the selection from Securities
of the series that are Outstanding and that have not previously been called for
redemption and may provide for the selection for redemption of portions (equal
to the minimum authorized denomination for Securities, including coupons, if
any, of that series or any integral multiple thereof) of the principal amount of
Securities, including coupons, if any, of such series of a denomination larger
than the minimum authorized denomination for Securities of that series. The
Trustee shall promptly notify the Company in writing of the Securities selected
by the Trustee for redemption and, in the case of any Securities selected for
partial redemption, the principal amount thereof to be redeemed.

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

         Section 10.4 Notice of Redemption. Unless otherwise specified as
contemplated by Section 3.1, notice of redemption shall be given in the manner
provided in Section 1.6 not less than 30 days nor more than 60 days prior to the
Redemption Date to the Holders of the Securities to be redeemed.

         All notices of redemption shall state:

                  (1) the Redemption Date;

                  (2) the Redemption Price;

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

                  (4) in case any Security is to be redeemed in part only, the
         notice which relates to such Security shall state that on and after the
         Redemption Date, upon surrender of such Security, the holder will
         receive, without a charge, a new Security or Securities of authorized
         denominations for the principal amount thereof remaining unredeemed;

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                  (5) the Place or Places of Payment where such Securities,
         together in the case of Bearer Securities with all coupons appertaining
         thereto, if any, maturing after the Redemption Date, are to be
         surrendered for payment for the Redemption Price;

                  (6) that Securities of the series called for redemption and
         all unmatured coupons, if any, appertaining thereto must be surrendered
         to the Paying Agent to collect the redemption price;

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

                  (8) that the redemption is for a sinking fund, if such is the
         case;

                  (9) that, unless otherwise specified in such notice, Bearer
         Securities of any series, if any, surrendered for redemption must be
         accompanied by all coupons maturing subsequent to the Redemption Date
         or the amount of any such missing coupon or coupons will be deducted
         from the Redemption Price, unless security or indemnity satisfactory to
         the Company, the Trustee and any Paying Agent is furnished; and

                  (10) the CUSIP number, if any, of the Securities.

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

         Section 10.5 Deposit of Redemption Price. On or prior to 12:00 noon,
New York City time, on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, which it may not do in the case of a sinking fund payment under Article
11, segregate and hold in trust as provided in Section 9.3) an amount of money
in the currency or currencies (including currency unit or units) in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 3.1 for the Securities of such series) sufficient to pay on the
Redemption Date the Redemption Price of, and (unless the Redemption Date shall
be an Interest Payment Date) interest accrued to the Redemption Date on, all
Securities or portions thereof which are to be redeemed on that date.

         Unless any Security by its terms prohibits any sinking fund payment
obligation from being satisfied by delivering and crediting Securities
(including Securities redeemed otherwise than through a sinking fund), the
Company may deliver such Securities to the Trustee for crediting against such
payment obligation in accordance with the terms of such Securities and this
Indenture.

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         Section 10.6 Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest and the coupons for any such interest
appertaining to any Bearer Security so to be redeemed, except to the extent
provided below, shall be void. Except as provided in the next succeeding
paragraph, upon surrender of any such Security, including coupons, if any, for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States and its
possessions (except as otherwise provided in Section 9.2) and, unless otherwise
specified as contemplated by Section 3.1, only upon presentation and surrender
of coupons for such interest; and provided, further, that, unless otherwise
specified as contemplated by Section 3.1, installments of interest on Registered
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 3.7.

         If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Bearer Security may be paid after deducting from the Redemption Price an amount
equal to the face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by coupons shall be payable only at
an office or agency located outside of the United States (except as otherwise
provided pursuant to Section 9.2) and, unless otherwise specified as
contemplated by Section 3.1, only upon presentation and surrender of those
coupons.

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

         Section 10.7 Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part at any Place of Payment therefor (with, if the Company
or the Trustee so required, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly

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authorized in writing), the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of that Security, without service charge
a new Security or Securities of the same series, having the same form, terms and
Stated Maturity, in any authorized denomination equal in aggregate principal
amount to the unredeemed portion of the principal amount of the Security
surrendered.

                                   ARTICLE 11

                                  Sinking Funds

         Section 11.1 Applicability of Article. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 3.1 for
Securities of such series.

         The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 11.2. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.

         Section 11.2 Satisfaction of Sinking Fund Payments with Securities. The
Company (i) may deliver Outstanding Securities of a series (other than any
previously called for redemption) together, in the case of Bearer Securities of
such series, with all unmatured coupons appertaining thereto and (ii) may apply
as a credit Securities of a series which have been redeemed either at the
election of the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms of
such Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

         Section 11.3 Redemption of Securities for Sinking Fund. Not less than
60 days prior to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms of that series, the portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to

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Section 11.2 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 10.3 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 10.4. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 10.6 and 10.7.

                                   ARTICLE 12

                                  Subordination

         Section 12.1 Agreement to Subordinate. The Company agrees, and each
Holder by accepting a Security agrees, that the indebtedness evidenced by the
Security is subordinated in right of payment, to the extent and in the manner
provided in this Article 12, to the prior payment in full of all Senior
Indebtedness, and that the subordination is for the benefit of, and shall be
enforceable directly by, the holders of Senior Indebtedness, without any act or
notice of acceptance hereof or reliance hereon.

         Section 12.2 Certain Definitions.

         "Senior Indebtedness" means the principal, premium, if any, and
interest on (i) all indebtedness of the Company, whether outstanding on the date
hereof or thereafter created, incurred or assumed, that is for borrowed money,
or evidenced by a note or similar instrument given in connection with the
acquisition of any business, properties or assets, including securities, (ii)
any indebtedness of any other Person of the kind described in the preceding
clause (i) for the payment of which the Company is responsible or liable as
guarantor or otherwise and (iii) amendments, renewals, extensions and refundings
of any such indebtedness. Senior Indebtedness shall continue to be Senior
Indebtedness and to be entitled to the benefits of the subordination provisions
of this Article 12 irrespective of any amendment, modification or waiver of any
term of the Senior Indebtedness or extension or renewal of the Senior
Indebtedness. Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness shall not include (a) indebtedness incurred for the purchase of
goods or materials or for services obtained in the ordinary course of business
and (b) any indebtedness which by its terms is expressly made pari passu with or
subordinated to the Securities.

         Section 12.3 Liquidation; Dissolution; Bankruptcy; Etc. In the event of

         (a) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Company, its creditors or its property,

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         (b) any proceeding for the liquidation, dissolution or other winding up
of the Company, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings,

         (c) any assignment by the Company for the benefit of creditors, or

         (d) any other marshalling of the assets of the Company,

all Senior Indebtedness (including, without limitation, interest accruing after
the commencement of any such proceeding, assignment or marshalling of assets)
shall first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made by the Company on account of the
Securities. In any such event, any payment or distribution, whether in cash,
securities or other property (other than securities of the Company or any other
corporation provided for by a plan of reorganization or a readjustment, the
payment of which is subordinate, at least to the extent provided in the
subordination provisions of this Indenture with respect to the indebtedness
evidenced by the Securities, to the payment of all Senior Indebtedness at the
time outstanding and to any securities issued in respect thereof under any such
plan of reorganization or readjustment), which would otherwise (but for the
provisions of this Article 12) be payable or deliverable in respect of the
Securities (including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of the Company
being subordinated to the payment of the Securities) shall be paid or delivered
directly to the holders of Senior Indebtedness, or to their representative or
trustee, in accordance with the priorities then existing among such holders
until all Senior Indebtedness shall have been paid in full.

         Section 12.4 Default on Senior Indebtedness. If (i) the Company
defaults in the payment of any principal, or premium, if any, or interest on any
Senior Indebtedness when the same becomes due and payable, whether at maturity
or at a date fixed for prepayment or declaration or otherwise or (ii) an event
of default occurs with respect to any Senior Indebtedness permitting the holders
thereof to accelerate the maturity thereof and written notice of such event of
default (requesting that payments on the Securities cease) is given to the
Company by the holders of Senior Indebtedness, then unless and until such
default in payment or event of default shall have been cured or waived or shall
have ceased to exist, no direct or indirect payment (in cash, property or
securities, by set-off or otherwise) shall be made or agreed to be made on
account of the Securities or interest thereon or in respect of any repayment,
redemption, retirement, purchase or other acquisition of the Securities.

         Section 12.5 When Distribution Must Be Paid Over. If a distribution is
made to the Trustee or any Holder at a time when a Responsible Officer of the
Trustee or such Holder has actual knowledge that because of this Article 12 such
distribution should not have been made to it, the Trustee or such Holder who
receives the distribution shall hold

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it in trust for the benefit of, and, upon written request, shall pay it over to,
the holders of Senior Indebtedness as their interests may appear, or their agent
or representative or the trustee under the indenture or other agreement (if any)
pursuant to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all principal, premium,
if any, and interest then payable with respect to any Senior Indebtedness.

         With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 12, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders or the Company or any other person money or assets to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
12, except if such payment is made as a result of the willful misconduct or
gross negligence of the Trustee.

         Section 12.6 Notice by Company. The Company shall promptly notify in
writing the Trustee and any Paying Agent of any facts known to the Company that
would cause a payment with respect to the Securities to violate this Article 12,
but failure to give such notice shall not affect the subordination of the
Securities to the Senior Indebtedness provided in this Article 12.

         Section 12.7 Subrogation. Senior Indebtedness shall not be deemed to
have been paid in full unless the holders thereof shall have received cash,
securities or other property equal to the amount of such Senior Indebtedness
then outstanding. After all Senior Indebtedness is paid in full and until the
Securities are paid in full, Holders shall be subrogated (equally and ratably
with all other indebtedness as to which the right to receive payment is pari
passu with the Securities) to the rights of holders of Senior Indebtedness to
receive distributions applicable to Senior Indebtedness to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of Senior Indebtedness, and such payments or distributions received by any
Holder of Securities, by reason of such subrogation, of cash, securities or
other property which otherwise would be paid or distributed to the holders of
Senior Indebtedness, shall, as between the Company and its creditors other than
the holders of Senior Indebtedness, on the one hand, and the Holders of
Securities, on the other, be deemed to be a payment by the Company on account of
Senior Indebtedness, and not on account of Securities.

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         Section 12.8 Relative Rights. This Article 12 defines the relative
rights of Holders and holders of Senior Indebtedness. Nothing in this Indenture
shall:

         (a) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of and interest
on the Securities in accordance with their terms;

         (b) affect the relative rights of Holders and creditors of the Company
other than their rights in relation to holders of Senior Indebtedness; or

         (c) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of holders
and owners of Senior Indebtedness to receive distributions and payments
otherwise payable to Holders.

         If the Company fails because of this Article 12 to pay principal of or
interest on a Security on the due date, the failure is still a Default or Event
of Default.

         Section 12.9 Subordination May Not Be Impaired by Company. No present
or future holder of any Senior Indebtedness shall be prejudiced in the right to
enforce subordination of the indebtedness constituting the Securities by any act
or failure to act on the part of the Company.

         Section 12.10 Distribution. Upon any payment or distribution of assets
of the Company referred to in this Article 12, the Trustee and the Holders shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of the liquidating trustee or agent or
other person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Debt of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 12.

         Section 12.11 Rights of Trustee and Paying Agent. Notwithstanding the
provisions of this Article 12 or any other provision of this Indenture, neither
the Trustee nor any Paying Agent shall be charged with knowledge of the
existence of any facts which would prohibit the making of any payment or
distribution by the Trustee or such Paying Agent, or the taking of any action by
the Trustee or such Paying Agent, and the Trustee or such Paying Agent may
continue to make payments on the Securities unless, in the case of the Trustee,
and in the case of such Paying Agent as long as the Trustee is such Paying
Agent, a Responsible Officer shall have received at the Corporate Trust Office
of the Trustee, and in the case of a Paying Agent other than the Trustee, it
shall have received, in each case at least two Business Days prior to the date
of such payment, written notice of facts that would cause any such payment with
respect to the Securities to violate this Article 12. The Trustee or any Paying
Agent, as applicable, shall promptly

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provide a copy of such notice to the Holders. Nothing in this Article 12 shall
limit the right of the holders of Senior Indebtedness to recover payments as
contemplated elsewhere in this Article 12 or impair the claims of, or payments
to, the Trustee under or pursuant to Section 6.9 hereof.

         The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee subject
to Trust Indenture Act Sections 310(b) and 311. Any Agent may do the same with
like rights.

         Section 12.12 Authorization to Effect Subordination. Each Holder of a
Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 12, and appoints the Trustee his
attorney-in-fact for any and all such purposes.

         Section 12.13 Certain Conversions or Exchanges Deemed Payment. For the
purposes of this Article only (a) the issuance and delivery of junior securities
upon conversion or exchange of Securities in accordance with any indentures
supplemental hereto shall not be deemed to constitute a payment or distribution
on account of the principal of (or premium, if any) or interest on securities or
on account of the purchase or other acquisition of Securities, and (b) the
payment, issuance or delivery of cash, property or securities (other than junior
securities) upon conversion or exchange of a Security shall be deemed to
constitute payment on account of the principal of such security. For the
purposes of this Section, the term "junior securities" means (i) shares of any
stock of any class of the Company and (ii) securities of the Company which are
subordinated in right of payment to all Senior Debt which may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article. Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Debt and the Holders of the
Securities, the right, which is absolute and unconditional, of the Holder of any
Security to convert or exchange such Security in accordance with any indentures
supplemental hereto.

         This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one instrument.

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<PAGE>   85

         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.

                                       PHELPS DODGE CORPORATION

                                       By:  /s/ Gregory W. Stevens
                                            ----------------------------------
                                            Title:  Vice President and Treasurer

[Seal]

Attest:

/s/ Robert C. Swan
------------------------------------
Title:  Vice President and Secretary

                                       FIRST UNION NATIONAL BANK

                                       By:  /s/ Kevin M. Dobrava
                                            ----------------------------------
                                            Title:  Vice President

[Seal]

Attest:

/s/ R. Douglas Milner
-------------------------------------
Title:  Vice President

                                       79

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