Document:

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                                                                     EXHIBIT 4.1

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                             POLARIS INDUSTRIES INC.

                                       and

                          NORWEST BANK MINNESOTA, N.A.

                                 as Rights Agent

                                RIGHTS AGREEMENT

                            Dated as of MAY 18, 2000

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                                TABLE OF CONTENTS
<TABLE>
<S>          <C>                                                                                                  <C>
Section 1.   Certain Definitions..................................................................................1
Section 2.   Appointment of Rights Agent..........................................................................4
Section 3.   Issue of Right Certificates..........................................................................4
Section 4.   Form of Right Certificates...........................................................................5
Section 5.   Countersignature and Registration....................................................................6
Section 6.   Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost
             or Stolen Right Certificates.........................................................................6
Section 7.   Exercise of Rights; Purchase Price; Expiration Date of Rights........................................7
Section 8.   Cancellation and Destruction of Right Certificates...................................................8
Section 9.   Availability of Preferred Shares.....................................................................8
Section 10.  Preferred Shares Record Date.........................................................................9
Section 11.  Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights..........................9
Section 12.  Certificate of Adjusted Purchase Price or Number of Shares..........................................16
Section 13.  Consolidation, Merger, Statutory Share Exchange  or Sale or Transfer of Assets or
              Earning Power......................................................................................16
Section 14.  Fractional Rights and Fractional Shares.............................................................18
Section 15.  Rights of Action....................................................................................19
Section 16.  Agreement of Right Holders..........................................................................20
Section 17.  Right Certificate Holder Not Deemed a Shareholder...................................................20
Section 18.  Concerning the Rights Agent.........................................................................20
Section 19.  Merger or Consolidation or Change of Name of Rights Agent...........................................21
Section 20.  Duties of Rights Agent..............................................................................21
Section 21.  Change of Rights Agent..............................................................................23
Section 22.  Issuance of New Right Certificates..................................................................24
Section 23.  Redemption..........................................................................................24
Section 24.  Exchange............................................................................................24
Section 25.  Notice of Certain Events............................................................................26
Section 26.  Notices.............................................................................................26
Section 27.  Supplements and Amendments..........................................................................27
Section 28.  Successors..........................................................................................27
Section 29.  Benefits of this Agreement..........................................................................27
Section 30.  Severability........................................................................................28
Section 31.  Governing Law.......................................................................................28
Section 32.  Counterparts........................................................................................28
Section 33.  Descriptive Headings................................................................................28

</TABLE>

Signatures

Exhibit A - Certificate of Designations, Rights and Preferences

Exhibit B - Form of Right Certificate

Exhibit C - Summary of Rights to Purchase Preferred Shares

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                                RIGHTS AGREEMENT

     This RIGHTS AGREEMENT (the "Agreement"), dated as of May 18, 2000 between
Polaris Industries Inc., a Minnesota corporation (the "Company"), and Norwest
Bank Minnesota, N.A., as Rights Agent (the "Rights Agent", which term shall
include any successor Rights Agent hereunder).

     WHEREAS, the Board of Directors of the Company (the "Board") the Board has
determined it desirable and in the best interest of the Company and its
shareholders to adopt a Shareholder Rights Plan and to implement that decision
by execution of this Agreement; and

     WHEREAS, the Board has authorized and declared a dividend of one preferred
share purchase right (a "Right") for each Common Share (as hereinafter defined)
of the Company outstanding as of the Close of Business (as hereinafter defined)
on June 1, 2000 (the "Record Date"), each Right representing the right to
purchase one one-hundredth of a Preferred Share (as hereinafter defined), upon
the terms and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to each Common
Share that shall become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date (as
such terms are hereinafter defined).

     NOW THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

     Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:

     (a)    "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the Common Shares
of the Company then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company, (iii) any
employee benefit plan of the Company or any Subsidiary of the Company, or (iv)
any Person holding Common Shares for or pursuant to the terms of any such plan
(each of (i) through (iv) an "Exempt Person"). Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of an acquisition of
Common Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 15% or more of the Common Shares of the Company then outstanding;
provided, however, that if a Person, together with all Affiliates and Associates
of such Person, shall become the Beneficial Owner of 15% or more of the Common
Shares of the Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Company, then such
Person shall be deemed to be an "Acquiring Person." Further, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
promptly divests, or promptly enters into an agreement with, and satisfactory
to, the Company, in its sole discretion, to divest (without exercising or
retaining any power, including voting power, with respect to such shares) a
sufficient number of

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Common Shares (or securities convertible into, exchangeable into or exercisable
for Common Shares) so that such Person would no longer shall be the Beneficial
Owner of 15% or more of the Common Shares of the Company then outstanding, then
such Person shall not be deemed to be an "Acquiring Person" for any purposes of
this Agreement.

     (b)    "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.

     (c)    A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" of have "beneficial ownership" of any securities:

          (i)    which such Person or any of such Person's Affiliates or
     Associates beneficially owns, directly or indirectly, including without
     limitation securities with respect to which such Person or any of such
     Person's Affiliates or Associates has "beneficial ownership" pursuant to
     Rule 13d-3 under the Exchange Act;

          (ii)   which such Person or any of such Person's Affiliates or
     Associates has, directly or indirectly (A) the right to acquire (whether
     such right is exercisable immediately or only after the passage of time)
     pursuant to any agreement, arrangement or understanding (other than
     customary agreements with and between underwriters and selling group
     members with respect to a bona fide public offering of securities), or upon
     the exercise of conversion rights, exchange rights, rights (other than
     these Rights), warrants or options, or otherwise; provided, however, that a
     Person shall not be deemed the Beneficial Owner of, or to beneficially own,
     or to have beneficial ownership of, securities tendered pursuant to a
     tender or exchange offer made by or on behalf of such Person or any of such
     Person's Affiliates or Associates until such tendered securities are
     accepted for purchase or exchange; or (B) the right to vote or dispose of
     (including, without limitation, pursuant to any agreement, arrangement or
     understanding; or

          (iii)  which are beneficially owned, directly or indirectly, by any
     other Person (or any Affiliates or Associates thereof) with which such
     Person (or any of such Person's Affiliates or Associates) has any
     agreement, arrangement or understanding (other than customary agreements
     with and between underwriters and selling group members with respect to a
     bona fide public offering of securities) for the purpose of acquiring,
     holding, voting (except to the extent contemplated by the proviso to
     Section 1(c) (ii) (A)) or disposing of any securities of the Company;

provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, or to have beneficial ownership of, any security (1) solely
because such security as been tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or Associates until such
tendered security is accepted for payment or exchange, or (2) if the agreement,
arrangement or understanding to vote such security (x) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act and (y) is not also
then reportable on Schedule 13D under the Exchange Act (or any comparable or
successor

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report) as being beneficially owned by such Person

     Notwithstanding anything in these definitions of Beneficial Ownership,
beneficially own or beneficial ownership to the contrary, the phrase "then
outstanding," when used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued
and outstanding together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to own beneficially
hereunder.

     (d)    "Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in the State of Minnesota are authorized
or obligated by law or executive order to close.

     (e)    "Close of Business" on any given date shall mean 5:00 P.M.,
Minneapolis, Minnesota time on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., Minneapolis, Minnesota on the
next succeeding Business Day.

     (f)    "Common Shares" when used with reference to the Company shall mean
the shares of common stock, par value $.01 per share, of the Company. "Common
Shares" when used with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.

     (g)    "Distribution Date" shall have the meaning set forth in Section 3
hereof.

     (h)    "Final Expiration Date" shall have the meaning set forth in Section
7 hereof.

     (i)    "Person" shall mean any individual, partnership, firm, limited
liability company, corporation or other entity, and shall include any successor
(by merger or otherwise) of such entity.

     (j)    "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company having
the rights and preferences set forth in the Certificate of Designations attached
to this Agreement as Exhibit A.

     (k)    "Redemption Date" shall have the meaning set forth in Section 7
hereof.

     (l)    "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act or any
successor statute) by the Company or an Acquiring Person that an Acquiring
Person has become such.

     (m)    "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or other equity interests entitled to vote in the election of directors (or
Persons with comparable responsibilities if the entity has no directors) is
beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.

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     Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable, upon ten (10) days' prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise, and shall in no event be liable,
for the acts or omissions of any such co-Rights Agent.

     Section 3. Issue of Right Certificates.

     (a)    Until the earlier of (i) the Shares Acquisition Date or (ii) the
Close of Business on the tenth business day (or such later date as may be
determined by action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by any Person
(other than an Exempt Person) of, or of the first public announcement of the
intention of any Person (other than an Exempt Person) to commence, a tender or
exchange offer the consummation of which would result in any Person (other than
an Exempt Person) becoming the Beneficial Owner of Common Shares aggregating 15%
or more of the then outstanding Common Shares (including any such date that is
after the date of this Agreement and prior to the issuance of the Rights; the
earlier of such dates being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer of Common
Shares. Notwithstanding anything stated in this Section 3, the Distribution Date
shall in no event occur until the authority of the Board of Directors of the
Company to redeem the Rights pursuant to Section 23(b), as such Section may be
amended pursuant to Section 27, shall have terminated. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage-prepaid mail, to
each record holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more Right Certificates, in substantially the form of Exhibit B
hereto (a "Right Certificate"), evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.

     (b)    On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Record Date, at the address of such holder shown on
the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date (or the earlier
Redemption Date or Final Expiration Date), the Rights will be evidenced by such
certificates registered in the names of the holders thereof. Until the
Distribution Date (or the earlier Redemption Date or Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.

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     (c)    Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:

     This certificate also evidences and entitles the holder hereof to certain
     rights as set forth in a Rights Agreement between Polaris Industries Inc.
     and Norwest Bank Minnesota, N.A., dated as of May 18, 2000 (the " Rights
     Agreement"), the terms of which (including restrictions on the transfer of
     such Rights) are hereby incorporated herein by reference and a copy of
     which is on file at the principal executive offices of Polaris Industries
     Inc. Under certain circumstances, as set forth in the Rights Agreement,
     such Rights will be evidenced by separate certificates and will no longer
     be evidenced by this certificate. Polaris Industries Inc. will mail to the
     holder of this certificate a copy of the Rights Agreement without charge
     after receipt of a written request therefor. Under certain circumstances,
     as set forth in the Rights Agreement, Rights that are or were issued to any
     Person who becomes an Acquiring Person, or any Affiliate or Associate
     thereof (as such terms are defined in the Rights Agreement), whether
     currently held by or on behalf of such Person or by any subsequent holder
     thereof, may become null and void.

With respect to such certificates containing the foregoing legend, until the
earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date, the Rights associated with the Common Shares represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. In the event that
the Company purchases or acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed cancelled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which are no longer
outstanding.

     Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or automated
quotation system on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11 and 22 hereof, the
initial Right Certificates shall entitle the holders thereof to purchase such
number of one one-hundredths of a Preferred Share as shall be set forth therein
at the price per one one-hundredth of a Preferred Share set forth therein (the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right shall be subject to adjustment as provided herein.

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     Section 5. Countersignature and Registration. The Right Certificates shall
be executed on behalf of the Company by its Chairman of the Board, Chief
Executive Officer, President, Chief Financial Officer, any Vice President, or
its Treasurer, either manually or by facsimile signature. The Right Certificates
shall be countersigned either manually or by facsimile signature, by the Rights
Agent and shall not be valid for any purpose unless countersigned. In case any
officer of the Company who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.

     Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal office, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date of each of the Right
Certificates.

     Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a) (ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up, combined or exchanged at the
principal office of the Rights Agent. Thereupon the Rights Agent shall, subject
to Section 14 hereof, countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment by the registered holder of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have duly completed and executed the form of assignment
on the form of assignment on the reverse side of such Right Certificate and
shall have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) of such Right Certificate or Affiliates or
Associates thereof as the Company shall reasonably request.

     Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or

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destruction, of indemnity or security reasonably satisfactory to them, and, at
the Company's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.

     Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.

     (a)    Except as provided in Section 11(a)(ii), the registered holder of
any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly completed and executed, to
the Rights Agent at the principal office of the Rights Agent, together with
payment of the Purchase Price for each one one-hundredth of a Preferred Share as
to which the Rights are exercised, at or prior to the earliest of (i) the Close
of Business on May 31, 2010 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the "Redemption
Date"), or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.

     (b)    The Purchase Price for each one one-hundredth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $150.00 (one
hundred and fifty dollars), shall be subject to adjustment from time to time as
provided in Section 11 or 13 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.

     (c)    Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly completed and executed, accompanied
by payment of the Purchase Price for the shares to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof by cash, certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent (or
make available, if the Rights Agent is the transfer agent for the shares) of the
Preferred Shares certificates for the number of Preferred Shares to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to deposit the total
number of Preferred Shares issuable upon exercise of the Rights under this
Agreement with a depository agent, requisition from the depository agent
depository receipts representing such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent with the depository agent) and the Company hereby directs the depository
agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) promptly after receipt of such
certificates or depository receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt, deliver such cash for fractional interests in shares to or upon
the order of the registered holder of such Right Certificate.

     (d)    In case the registered holder of any Right Certificate shall
exercise less than all the

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Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the Rights Agent and
delivered to the registered holder of such Right Certificate or to such holder's
duly authorized assigns, subject to the provisions of Section 14 hereof.

     (e)    Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i) duly
completed and executed the form of election to purchase set forth on the reverse
side of the Right Certificate surrendered for such exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of such Right Certificate or Affiliates or Associates thereof
as the Company shall reasonably request.

     Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, after any retention
period required by the Securities and Exchange Commission has lapsed, and in
such case shall deliver a certificate of destruction thereof to the Company.

     Section 9. Availability of Preferred Shares.

     (a)    The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares, the
number of Preferred Shares that will be sufficient to permit the exercise in
full of all outstanding Rights.

     (b)    So long as the Preferred Shares issuable upon the exercise of Rights
may be listed on any national securities exchange, the Company shall use its
best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.

     (c)    The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price and any applicable transfer
taxes), be duly and validly authorized and issued and fully paid and
nonassessable shares.

     (d)    The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of

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certificates or depository receipts for the Preferred Shares in a name other
than that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any certificates or
depository receipts for Preferred Shares upon the exercise of any Rights until
any such tax shall have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax is due.

     Section 10. Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Shares transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate as such shall
not be entitled to any rights of a holder of Preferred Shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.

     Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.

     (a)    (i) In the event the Company shall at any time after the date of
     this Agreement (A) declare a dividend on the Preferred Shares payable in
     Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
     combine the outstanding Preferred Shares into a smaller number of Preferred
     Shares or (D) issue any shares of its capital stock in a reclassification
     of the Preferred Shares (including any such reclassification in connection
     with a consolidation, merger or statutory share exchange in which the
     Company is the continuing, surviving or acquiring corporation), except as
     otherwise provided in this Section 11 (a), the Purchase Price in effect at
     the time of the record date for such dividend or of the effective date of
     such subdivision, combination or reclassification, and the number and kind
     of shares of capital stock issuable on such date pursuant to the exercise
     of the Rights, shall be proportionately adjusted so that the holder of any
     Right exercised after such time shall be entitled to receive, upon payment
     of the Purchase Price (and any applicable transfer taxes), the aggregate
     number and kind of shares of capital stock which, if such Right had been
     exercised immediately prior to such date and at a time when the Preferred
     Shares transfer books of the Company were open, such holder would have
     owned upon such exercise and been entitled to receive by virtue of such
     dividend, subdivision, combination or reclassification. If an event occurs
     which would require adjustment under both Section 11(a)(i) and Section
     11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
     addition to, and shall be made prior to, any adjustment required pursuant
     to Section 11(a)(ii).

                                       9
<PAGE>   12
          (ii) Subject to Section 24 of this Agreement, in the event any Person,
     alone or together with its Affiliates and Associates, becomes an Acquiring
     Person, each holder of a Right, except as provided below, shall thereafter
     have a right to receive, upon exercise thereof by payment of the amount
     equal to the then current Purchase Price multiplied by the number of one
     one-hundredths of a Preferred Share for which a Right would otherwise be
     then exercisable, in accordance with the terms of this Agreement and in
     lieu of Preferred Shares, such number of Common Shares of the Company as
     shall equal the result obtained by (x) multiplying the then current
     Purchase Price by the number of one one-hundredths of a Preferred Share for
     which a Right would otherwise be then exercisable and dividing that product
     by (y) 50% of the then current per share market price of the Company's
     Common Shares (determined pursuant to Section 11(d) hereof) on the date of
     the occurrence of such event; provided, however, that if the transaction
     that would otherwise give rise to the foregoing adjustment is also subject
     to the provisions of Section 13 hereof, then only the provisions of Section
     13 hereof shall apply and no adjustment shall be made pursuant to this
     Section 11(a)(ii); and provided further that the adjustment set forth in
     this Section 11(a)(ii) shall be effective only at and after the time at
     which the authority of the Board of Directors of the Company to redeem the
     Rights pursuant to Section 23(b), as such Section may be amended pursuant
     to Section 27, shall have terminated.

          Notwithstanding the foregoing, in the event any Person shall become an
     Acquiring Person, any Rights that are or, after becoming an Acquiring
     Person, were beneficially owned by an Acquiring Person (or any Associate or
     Affiliate of such Acquiring Person) shall become null and void at the time
     of such event without any further action, and no holder of such Rights
     shall thereafter have any right to exercise such Rights or any other rights
     whatsoever with respect to such Rights, whether under any provision of this
     Agreement or otherwise. No Right Certificate shall be issued pursuant to
     Section 3 hereof that represents Rights beneficially owned by an Acquiring
     Person or any Associate or Affiliate of any Acquiring Person whose Rights
     would be void pursuant to the preceding sentence; no Right Certificate
     shall be issued at any time upon the transfer of any Rights to an Acquiring
     Person whose Rights would be void pursuant to the preceding sentence or any
     Associate or Affiliate thereof or to any nominee of such Acquiring Person,
     Associate or Affiliate; and any Right Certificate delivered to the Rights
     Agent for transfer to an Acquiring Person whose Rights would be void
     pursuant to the preceding sentence or any Associate or Affiliate thereof
     shall be canceled. The Company shall use all reasonable efforts to insure
     that the provisions of this Section 11(a)(ii) are complied with, but shall
     have no liability to any holder of a Right Certificate or other Person as a
     result of its failure in good faith to make any determinations with respect
     to an Acquiring Person or its Affiliates or Associates.

          (iii) In lieu of issuing Common Shares in accordance with Section
     11(a)(ii) hereof, the Company may, if the Company's Board of Directors
     determines that such action is necessary or appropriate and not contrary to
     the interest of holders of Rights (and, in the event that the number of
     Common Shares which are authorized by the Company's Articles of
     Incorporation but not outstanding or reserved for issuance for purposes
     other than upon exercise of the Rights are not sufficient to permit the
     exercise in full of the Rights, or if any necessary regulatory approval for
     such issuance has not been obtained by the Company): (A) determine the
     excess of (1) the value of the Common Shares issuable upon the exercise of
     a Right (the

                                       10
<PAGE>   13
     "Current Value") over (2) the Purchase Price (such excess, the "Spread")
     and (B) with respect to each Right, make adequate provision to substitute
     in whole or in part for such Common Shares, upon exercise of the Rights,
     (including, without limitation, full payment of the Purchase Price) (1)
     cash, (2) a reduction in the Purchase Price, (3) other equity securities of
     the Company (including, without limitation, shares or units of shares of
     any series of preferred stock which the Board of Directors of the Company
     has deemed to have the same value as Common Shares (such shares or units of
     shares of preferred stock are herein called "common share equivalents")),
     except to the extent that the Company has not obtained any necessary
     shareholder or regulatory approval for such issuance, (4) debt securities
     of the Company, except to the extent that the Company has not obtained any
     necessary shareholder or regulatory approval for such issuance, (5) other
     assets or (6) any combination of the foregoing, having an aggregate value
     equal to the Current Value, where such aggregate value has been determined
     by the Board of Directors of the Company based upon the advice of a
     nationally recognized investment banking firm selected by the Board of
     Directors of the Company; provided, however, if the Company shall not have
     made adequate provision to deliver value pursuant to clause (B) above
     within thirty (30) days following the later of (x) the first occurrence of
     a Distribution Date and (y) the date on which the Company's right of
     redemption pursuant to Section 23(b) expires (the later of (x) and (y)
     being referred to herein as the "Trigger Date"), then the Company shall be
     obligated to deliver, upon the surrender for exercise of a Right and
     without requiring payment of the Purchase Price, Common Shares (to the
     extent available), except to the extent that the Company has not obtained
     any necessary shareholder or regulatory approval for such issuance, and
     then, if necessary, cash, which shares and/or cash have an aggregate value
     equal to the Spread. If the Board of Directors of the Company shall
     determine in good faith that it is likely that sufficient additional Common
     Shares could be authorized for issuance upon exercise in full of the Rights
     or that any necessary regulatory approval for such issuance will be
     obtained, the thirty (30) day period set forth above may be extended to the
     extent necessary, but not more than ninety (90) days after the Trigger
     Date, in order that the Company may seek shareholder approval for the
     authorization of such additional shares or take action to obtain such
     regulatory approval (such period, as it may be extended, the "Substitution
     Period"). To the extent that the Company determines that some action need
     be taken pursuant to the first and/or second sentences of this Section
     11(a)(iii), the Company (x) shall provide, subject to the second paragraph
     of Section 11(a)(ii) hereof, that such action shall apply uniformly to all
     outstanding Rights and (y) may suspend the exercisability of the Rights
     until the expiration of the Substitution Period in order to seek any
     authorization of additional shares, to take any action to obtain any
     required regulatory approval and/or to decide the appropriate form of
     distribution to be made pursuant to such first sentence and to determine
     the value thereof. In the event of any such suspension, the Company shall
     issue a public announcement stating that the exercisability of the Rights
     has been temporarily suspended, as well as a public announcement at such
     time as the suspension is no longer in effect. For purposes of this Section
     11(a)(iii), the value of the Common Shares shall be the current per share
     market price (as determined pursuant to Section 11(d) hereof) of the Common
     Shares on the Trigger Date and the value of any "common stock equivalent"
     shall be deemed to have the same value as the Common Shares on such date.

     (b) In case the Company shall fix a record date for the issuance of rights,
options or

                                       11
<PAGE>   14
warrants to all holders of Preferred Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having the same rights, privileges and
preferences as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or having a conversion
price per share, if a security convertible into Preferred Shares or equivalent
preferred shares) less than the then current per share market price of the
Preferred Shares (as determined pursuant to Section 11(d) hereof)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current per share market price and the denominator of which
shall be the number of Preferred Shares outstanding on such record date plus the
number of additional Preferred Shares and/or equivalent preferred shares to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Preferred Shares owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.

     (c)    In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation or in a statutory share
exchange) of evidences of indebtedness or cash or non-cash assets (other than a
regular quarterly cash dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then current per
share market price of the Preferred Shares (as determined pursuant to Section
11(d) hereof) on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
evidences of indebtedness or cash or non-cash assets so to be distributed on, or
of such subscription rights or warrants applicable to, one Preferred Share and
the denominator of which shall be such current per share market price of the
Preferred Shares. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is record date had
not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such not been fixed.

     (d)    (i) For the purpose of any computation hereunder, the "current per
     share market price" of any security (a "Security" for the purpose of this
     Section 11(d) (i)) on any date shall be

                                       12
<PAGE>   15
     deemed to be the average of the daily closing prices per share of such
     Security for the 30 consecutive Trading Days (as such term is hereinafter
     defined) immediately prior to such date; provided, however, that in the
     event that the current per share market price of the Security is determined
     during a period following the announcement by the issuer of such Security
     of (A) a dividend or distribution on such Security payable in shares of
     such Security or securities convertible into such Security (other than the
     Rights), or (B) any subdivision, combination or reclassification of such
     Security, and prior to the expiration of 30 Trading Days after the
     ex-dividend date for such dividend or distribution, or the record date for
     such subdivision, combination or reclassification, then, and in each such
     case, the current per share market price shall be appropriately adjusted to
     reflect the current market price per share equivalent of such Security. The
     closing price for each day shall be the last sale price, regular way, or,
     in case no such sale takes place on such day, the average of the closing
     bid and asked prices, regular way, in either case as reported in the
     principal consolidated transaction reporting system with respect to
     securities listed or admitted to trading on the New York Stock Exchange or,
     if the Security is not listed or admitted to trading on the New York Stock
     Exchange, as reported in the principal consolidated transaction reporting
     system with respect to securities listed on the principal national
     securities exchange on which the Security is listed or admitted to trading
     or, if the Security is not listed or admitted to trading on any national
     securities exchange, the last quoted price or, if not so quoted, the
     average of the high bid and low asked prices in the over-the-counter
     market, as reported by the National Association of Securities Dealers, Inc.
     Automated Quotations System ("NASDAQ") or such other system then in use,
     or, if on any such date the Security is not quoted by any such
     organization, the average of the closing bid and asked prices as furnished
     by a professional market maker making a market in the Security selected by
     the Board of Directors of the Company. If on any such date no market maker
     is making a market in the Security, the fair value of such shares on such
     date as determined in good faith by the Board of Directors of the Company
     shall be used in lieu of the closing price for such date. The term "Trading
     Day" shall mean a day on which the principal national securities exchange
     on which the Security is listed or admitted to trading is open for the
     transaction of business or, if the Security is not listed or admitted to
     trading on any national securities exchange, a Business Day. Except as
     provided in Section 11(d)(ii) with respect to Preferred Shares, if on any
     such day the Security is not publicly held or no professional market maker
     is making a market in the Security, the fair value of such Security on such
     day as determined in good faith by the Board of Directors of the Company
     (whose determination shall be described in a statement filed with the
     Rights Agent and shall be binding on the Rights Agent and the holders of
     the Rights) shall be used in lieu of the closing price for such day.

          (ii) For the purpose of any computation hereunder, the "current per
     share market price" of the Preferred Shares shall be determined in
     accordance with the method set forth in Section 11(d) (i). If the Preferred
     Shares are not publicly traded, the "current per share market price" of the
     Preferred Shares shall be conclusively deemed to be the current per share
     market price of the Common Shares as determined pursuant to Section
     11(d)(i) (appropriately adjusted to reflect any stock split, stock dividend
     or similar transaction occurring after the date hereof), multiplied by one
     hundred. If neither the Common Shares nor the Preferred Shares are publicly
     held or so listed or traded, "current per share market price" shall mean
     the fair value per share as determined in good faith by the Board of
     Directors of the Company, whose

                                       13
<PAGE>   16
     determination shall be described in a statement filed with the Rights Agent
     and shall be binding on the Rights Agent and the holders of the Rights.

     (e)    Except as provided in the third sentence of this Section 11(e), no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-millionth of a Preferred Share or one
ten-thousandth of a Common Share or any other share or security as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the Final Expiration Date.

     (f)    If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Shares contained in Section 11(a) through (c),
inclusive, and Section 11(e), and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Preferred Shares shall apply on like terms to any such other
shares.

     (g)    All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

     (h)    Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
Preferred Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one one-hundredths of a
share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.

     (i)    The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to

                                       14
<PAGE>   17
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.

     (j)    Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of a
Preferred Share which were expressed in the initial Right Certificates issued
hereunder.

     (k)     In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.

     (l)    Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section ll, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of any Preferred Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares, (iv)
dividends on Preferred Shares payable in Preferred Shares or (v) issuance of
rights, options or warrants referred to hereinabove in Section 11(b), hereafter
made by the Company to holders of its Preferred Shares shall not be taxable to
such shareholders.

     (m)    Anything in this Agreement or the Rights notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or otherwise than by
payment

                                       15
<PAGE>   18
of dividends in Common Shares) into a greater or lesser number of Common Shares,
then in any such case (A) the number of one one-hundredths of a Preferred Share
purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-hundredths of a Preferred Share
so purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such event
and the denominator of which is the number of Common Shares outstanding
immediately after such event, and (B) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(m) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected. If an event occurs which
would require adjustment under both Section 11(a)(ii) and this Section 11(m),
the adjustment provided for in this Section 11(m) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).

     Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate and (c) if such adjustment is made
after the Distribution Date, mail a brief summary thereof to each holder of a
Right Certificate in accordance with Section 25 hereof.

     Section 13. Consolidation, Merger, Statutory Share Exchange or Sale or
Transfer of Assets or Earning Power.

     (a)    In the event that, after the Distribution Date or within 15 days
prior thereto, directly or indirectly:

          (i) the Company shall consolidate with, or merge with and into, any
     other Person, and the Company shall not be the continuing or surviving
     corporation of such consolidation or merger;

          (ii) any Person shall consolidate with the Company, or merge with and
     into the Company and the Company shall be the continuing or surviving
     corporation of such consolidation or merger and, in connection with such
     consolidation or merger, all or part of the outstanding Common Shares shall
     be changed into or exchanged for stock or other securities of any other
     Person (or the Company), money or any other property (except as the result
     of the exercise of statutory dissenters' rights); or

          (iii) the Company shall effect a statutory share exchange with the
     outstanding Common Shares of the Company being exchanged for stock or other
     securities of any Person, cash or other property;

          (iv) the Company shall sell or otherwise transfer (or one or more of
     its Subsidiaries shall sell or otherwise transfer), in one or a series of
     related transactions, assets or earning power aggregating 50% or more of
     the assets or earning

                                       16
<PAGE>   19
     power of the Company and its Subsidiaries (taken as a whole) to any other
     Person or Persons (other than the Company or one or more of its wholly
     owned Subsidiaries), then, and in each such case (i) through (iv), proper
     provision shall be made so that

               (A) each holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise thereof by payment
of the amount equal to the product of the number of one one-hundredths of a
Preferred Share which would otherwise be issuable upon exercise of a Right and
the then current Purchase Price in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of validly authorized and issued,
fully paid, nonassessable and freely tradable Common Shares of the Principal
Party (as hereinafter defined), not subject to any liens, encumbrances, rights
of first refusal or adverse claims, as shall be equal to the result obtained by
(A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right would otherwise be
exercisable and dividing that product by (B) 50% of the then current per share
market price of the Common Shares of such Principal Party (determined pursuant
to Section 11(d) hereof) on the date of consummation of such consolidation,
merger, exchange, sale or transfer;

               (B) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale, exchange or
transfer, all the obligations and duties of the Company pursuant to this
Agreement;

               (C) the term "Company" shall thereafter be deemed to refer to
such Principal Party; and

               (D) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of its Common Shares) in
connection with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights.

     (b)    "Principal Party" shall mean:

            (i) in the case of any transaction described in clauses (i), (ii) or
     (iii) of the first sentence of Section 13(a), the Person (including,
     without limitation, the Company as successor thereto or as the surviving
     corporation) that is the issuer of any securities into which Common Shares
     of the Company are converted in such merger, consolidation or exchange, or
     if no securities are so issued, the Person that is the other party to such
     merger, consolidation or exchange; and

            (ii) in the case of any transaction described in clause (iv) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions;

provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time or have not been continuously over the preceding
12-month period registered under Section 12 of

                                       17
<PAGE>   20
the Exchange Act, and such Person is a direct or indirect Subsidiary of another
Person the Common Shares of which are and have been so registered, "Principal
Party" shall refer to such other Person, and (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Shares
of two or more of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common Shares having the
greatest aggregate market value.

     (c) The Company shall not consummate any event described in clauses(i),
(ii), (iii) or (iv) of the first sentence of Section 13(a) unless the Principal
Party shall have a sufficient number of authorized, unreserved Common Shares
which have not been issued or are held in treasury to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any event described in clauses (i), (ii), (iii) or
(iv) of the first sentence of Section 13(a), the Principal Party will:

          (i) prepare and file a registration statement under the Act, with
     respect to the Rights and the securities purchasable upon exercise of the
     Rights, on an appropriate form, and use its best efforts to cause such
     registration statement to (A) become effective as soon as practicable after
     such filing and (B) remain effective (with a prospectus at all times
     meeting the requirements of the Securities Act) until the earlier of (1)
     the date as of which the Rights are no longer exercisable for such
     securities or (2) the Final Expiration Date;

          (ii) take such action as may be appropriate under, or to ensure
     compliance with, the securities or "blue sky" laws of the various states in
     connection with the exercisability of the Rights; and

          (iii) deliver to holders of the Rights historical financial statements
     for the Principal Party and each of its Affiliates, which comply in all
     respects with the requirements for registration on Form 10 under the
     Exchange Act.

     (d) The Company shall not enter into any transaction of the kind referred
to in this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights.

     (e) The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, exchanges, sales or other transfers.

     Section 14. Fractional Rights and Fractional Shares.

     (a)    The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a

                                       18
<PAGE>   21
whole Right. For the purposes of this Section 14(a), the current market value of
a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.

     (b)    The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depository receipts,
pursuant to an appropriate agreement between the Company and a depository
selected by it; provided, that such agreement shall provide that the holders of
such depository receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depository receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For the purposes of
this Section 14 (b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.

     (c)    The holder of a Right by the acceptance of the Right expressly
waives any right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).

     Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in such holder's own behalf and
for such holder's own benefit, enforce, and may institute and maintain any suit,
action

                                       19
<PAGE>   22
or proceeding against the Company to enforce, or otherwise act in respect of,
such holder's right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.

     Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

     (a)    prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Common Shares;

     (b)    after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer; and

     (c)    the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.

     Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.

     Section 18. Concerning the Rights Agent.

     (a)    The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or

                                       20
<PAGE>   23
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability in
the premises.

     (b)    The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.

     Section 19. Merger or Consolidation or Change of Name of Rights Agent.

     (a)    Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust powers of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. If at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.

     (b)    In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.

     Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:

                                       21
<PAGE>   24
     (a)    The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.

     (b)    Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of the "current per share market price") be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice President, the
Treasurer or the Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.

     (c)    The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct.

     (d)    The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.

     (e)    The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a) (ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.

     (f)    The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.

     (g)    The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief

                                       22
<PAGE>   25
Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for those instructions.

     (h)    The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.

     (i)    The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.

     Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and,
if such notice is after the Distribution Date, to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and,
if such notice is mailed after the Distribution Date, to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit the Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of the State of Minnesota (or of any other state of the United
States so long as such corporation is authorized to do business as a banking
institution in the State of Minnesota), in good standing, that is authorized
under such laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million or (b) an affiliate of a corporation described
in clause (a). After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not

                                       23
<PAGE>   26
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares or Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

     Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.

     Section 23. Redemption.

     (a)    The Rights may be redeemed only by action of a majority of the Board
of Directors pursuant to paragraph (b) of this Section 23 and shall not be
redeemed in any other manner.

     (b)    The Board of Directors of the Company may, at its option, at any
time prior to the Close of Business on the earlier of (i) the Shares Acquisition
Date or (ii) the Final Expiration Date, redeem all but not less than all the
then outstanding Rights at a redemption price of $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The redemption of the Rights by the
Board may be made effective at such time, on such basis and with such conditions
as the Board in its sole discretion may establish.

     (c)    Immediately upon the effectiveness of the redemption of the Rights
pursuant to paragraph (b) of this Section 23 and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within 10 days after such action ordering the redemption of the Rights,
the Company shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.

     Section 24. Exchange.

     (a)    The Board of Directors of the Company may, at its option, at any
time after the date the Rights first become exercisable for Common Shares
pursuant to Section 11(a)(ii), exchange all or

                                       24
<PAGE>   27
part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 11(a) (ii)
hereof) for Common Shares, with each Right to be exchanged for such number of
Common Shares as shall equal the result obtained by dividing (x) the then
current Purchase Price by (y) the current per share market price of Common
Shares (determined pursuant to Section 11(d) hereof) on the date the Rights
first become exercisable for Common Shares pursuant to Section 11(a)(ii) (such
number of shares being hereinafter referred to as the "Exchange Ratio"). The
Exchange Ratio shall be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction affecting the Common Shares that occurs after
the date the Rights first become exercisable for Common Shares pursuant to
Section 11(a)(ii). Notwithstanding the foregoing, the Board of Directors of the
Company shall not be empowered to effect such exchange at any time after any
Person (other than an Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.

     (b)    Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a) (ii)
hereof) held by each holder of Rights.

     (c)    In the event that there shall not be sufficient authorized, unissued
and unreserved Common Shares to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company, at its option, may substitute
Preferred Shares (or equivalent preferred shares, as such term is defined in
Section 11(b) hereof, or common share equivalents, as such term is defined in
Section 11(a)(iii)(B)(3) hereof) for Common Shares exchangeable for Rights, at
the initial rate of one one-hundredth of a Preferred Share (or equivalent
preferred share) or one common share equivalent for each Common Share, as
appropriately adjusted to reflect stock splits, stock dividends or similar
transactions affecting the Common Shares that occur after the date of this
Agreement.

     (d)    In the event that there shall not be sufficient Common Shares,
Preferred Shares, equivalent preferred shares or common share equivalents,
authorized, unissued and unreserved to permit the exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common Shares or Preferred
Shares, equivalent preferred shares or common share equivalents for issuance
upon exchange of the Rights.

     (e)    The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common

                                       25

<PAGE>   28
Shares, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares would otherwise
be issuable an amount in cash equal to the same fraction of the current market
value of a whole Common Share. For the purposes of this paragraph (e), the
current market value of a whole Common Share shall be the closing price of a
Common Share (as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 24.

     Section 25. Notice of Certain Events.

     (a)    In case the Company shall propose at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the holders of
its Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation, merger or
statutory share exchange into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to, any other
Person, (v) to effect the liquidation, dissolution or winding up of the Company,
or (vi) to declare or pay any dividend on the Common Shares payable in Common
Shares or to effect a subdivision, combination or consolidation of the Common
Shares (by reclassification or otherwise than by payment of dividends in Common
Shares), then, in each such case, the Company shall give to each holder of a
Right Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.

     (b)    In case the event set forth in Section 11(a) (ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a) (ii) hereof.

     Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, or delivered by hand or express courier service or faxed,
addressed (until another address is filed in writing with the Rights Agent) as
follows:

                                       26
<PAGE>   29

     Polaris Industries Inc.
     2100 Highway 55
     Medina, Minnesota 55340
     Attention: Michael Malone

Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, or delivered by hand or express
courier service or faxed, addressed (until another address is filed in writing
with the Company) as follows:

     Norwest Bank Minnesota, N.A.
     Shareowner Services
     161 North Concord Exchange St.
     South St. Paul, Minnesota 55075-1139
     Attention: Manager-Administration

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

     Section 27. Supplements and Amendments. By action of the Board of
Directors, the Company may and the Rights Agent shall, if so directed from the
Company, from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other provisions
with respect to the Rights which the Company may deem necessary or desirable,
any such supplement or amendment to be evidenced by a writing signed by the
Company and the Rights Agent; provided, however, that from and after such time
as any Person becomes an Acquiring Person, this Agreement shall not be amended
in any manner which would adversely affect the interests of the holders of
Rights.

     Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.

     Section 29. Benefits of this Agreement.

     (a)    Nothing in this Agreement shall be construed to give to any person
or corporation other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares) any legal or equitable right, remedy or claim under this
Agreement. This Agreement shall be for the sole and exclusive benefit of the
Company, the Rights

                                       27
<PAGE>   30
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares).

     (b)    The Board of Directors of the Company shall have the exclusive power
and total and complete authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board of Directors or the
Company or necessary or advisable in the administration of this Agreement,
including without limitation the right and power to interpret this Agreement and
to make conclusively all determinations deemed necessary or advisable for the
administration of this Agreement. All such acts, calculations, interpretations
and determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) that are done or made by the Board of Directors
of the Company in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent and the holders of the Rights and all other parties
and (y) not subject the Board of Directors of the Company to any liability to
the holders of the Rights or any other party.

     Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.

     Section 31. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Minnesota and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State.

     Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.

     Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

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

POLARIS INDUSTRIES INC.                     NORWEST BANK MINNESOTA, N.A.,
                                                AS RIGHTS AGENT

/s/ Thomas C. Tiller                        /s/ Barbara M. Novak
--------------------------------------      ------------------------------------
Thomas C. Tiller                            Barbara M. Novak
Chief Executive Officer and President       Vice President

                                       28
<PAGE>   31
                                                                       EXHIBIT A

               CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
                                ($.0l Par Value)
                                       of
                             POLARIS INDUSTRIES INC.
                      (Pursuant to Section 302A.401 of the
                       Minnesota Business Corporation Act)

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

     The undersigned, Michael W. Malone, Secretary of Polaris Industries Inc., a
corporation organized and existing under the business corporation act of the
State of Minnesota (hereinafter called the "Corporation"), hereby certifies
that:

     (i) the following resolutions establishing a series of junior participating
preferred stock pursuant to Chapter 302A of the Minnesota Statutes were adopted
by the Board of Directors of the Corporation at a meeting duly called and held
on May 18, 2000:

     RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Corporation (hereinafter called the "Board of Directors" or
the "Board") in accordance with the provisions of the Articles of Incorporation
of the Corporation, the Board of Directors hereby creates a series of Preferred
Stock, $.01 par value (the "Preferred Stock"), of the Corporation and hereby
states the designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof as follows:

     Series A Junior Participating Preferred Stock:

     Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 1,000,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

                                      A-1
<PAGE>   32
     Section 2. Dividends and Distributions.

          (A)    Subject to the rights of the holders of any shares of any
     series of Preferred Stock (or any similar stock) ranking prior and superior
     to the Series A Preferred Stock with respect to dividends, the holders of
     shares of Series A Preferred Stock, in preference to the holders of Common
     Stock, par value $.01 per share (the "Common Stock"), of the Corporation,
     and of any other junior stock, shall be entitled to receive, when, as and
     if declared by the Board of Directors out of funds legally available for
     the purpose, quarterly dividends payable in cash on the first day of
     January, March, June and September in each year (each such date being
     referred to herein as a "Quarterly Dividend Payment Date"), commencing on
     the first Quarterly Dividend Payment Date after the first issuance of a
     share or fraction of a share of Series A Preferred Stock, in an amount per
     share (rounded to the nearest cent) equal to the greater of (a) $1 or (b)
     subject to the provision for adjustment hereinafter set forth, 100 times
     the aggregate per share amount of all cash dividends, and 100 times the
     aggregate per share amount (payable in kind) of all non-cash dividends or
     other distributions, other than a dividend payable in shares of Common
     Stock or a subdivision of the outstanding shares of Common Stock (by
     reclassification or otherwise), declared on the Common Stock since the
     immediately preceding Quarterly Dividend Payment Date or, with respect to
     the first Quarterly Dividend Payment Date, since the first issuance of any
     share or fraction of a share of Series A Preferred Stock. In the event the
     Corporation shall at any time declare or pay any dividend on the Common
     Stock payable in shares of Common Stock, or effect a subdivision or
     combination or consolidation of the outstanding shares of Common Stock (by
     reclassification or otherwise than by payment of a dividend in shares of
     Common Stock) into a greater or lesser number of shares of Common Stock,
     then in each such case the amount to which holders of shares of Series A
     Preferred Stock were entitled immediately prior to such event under clause
     (b) of the preceding sentence shall be adjusted by multiplying such amount
     by a fraction, the numerator of which is the number of shares of Common
     Stock outstanding immediately after such event and the denominator of which
     is the number of shares of Common Stock that were outstanding immediately
     prior to such event.

          (B)    The Corporation shall declare a dividend or distribution on the
     Series A Preferred Stock as provided in paragraph (A) of this Section
     immediately after it declares a dividend or distribution on the Common
     Stock (other than a dividend payable in shares of Common Stock); provided
     that, in the event no dividend or distribution shall have been declared on
     the Common Stock during the period between any Quarterly Dividend Payment
     Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
     $1 per share on the Series A Preferred Stock shall nevertheless be payable
     on such subsequent Quarterly Dividend Payment Date.

          (C)    Dividends shall begin to accrue and be cumulative on
     outstanding shares of

                                      A-2
<PAGE>   33
     Series A Preferred Stock from the Quarterly Dividend Payment Date next
     preceding the date of issue of such shares, unless the date of issue of
     such shares is prior to the record date for the first Quarterly Dividend
     Payment Date, in which case dividends on such shares shall begin to accrue
     from the date of issue of such shares, or unless the date of issue is a
     Quarterly Dividend Payment Date or is a date after the record date for the
     determination of holders of shares of Series A Preferred Stock entitled to
     receive a quarterly dividend and before such Quarterly Dividend Payment
     Date, in either of which events such dividends shall begin to accrue and be
     cumulative from such Quarterly Dividend Payment Date. Accrued by unpaid
     dividends shall not bear interest. Dividends paid on the shares of Series A
     Preferred Stock in an amount less than the total amount of such dividends
     at the time accrued and payable on such shares shall be allocated pro rata
     on a share-by-share basis among all such shares at the time outstanding.
     The Board of Directors may fix a record date for the determination of
     holders of shares of Series A Preferred Stock entitled to receive payment
     of a dividend or distribution declared thereon, which record date shall be
     not more than 60 days prior to the date fixed for the payment thereof.

     Section 3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:

          (A)    Subject to the provision for adjustment hereinafter set forth,
     each share of Series A Preferred Stock shall entitle the holder thereof to
     100 votes on all matters submitted to a vote of the stockholders of the
     Corporation. In the event the Corporation shall at any time declare or pay
     any dividend on the Common Stock payable in shares of Common Stock, or
     effect a subdivision or combination or consolidation of the outstanding
     shares of Common Stock (by reclassification or otherwise than by payment of
     a dividend in shares of Common Stock) into a greater or lesser number of
     shares of Common Stock, then in each such case the number of votes per
     share to which holders of shares of Series A Preferred Stock were entitled
     immediately prior to such event shall be adjusted by multiplying such
     number by a fraction, the numerator of which is the number of shares of
     Common Stock outstanding immediately after such event and the denominator
     of which is the number of shares of Common Stock that were outstanding
     immediately prior to such event.

          (B)    Except as otherwise provided herein, in any other Certificate
     of Designations creating a series of Preferred Stock or any similar stock,
     or by law., the holders of shares of Series A Preferred Stock and the
     holders of shares of Common Stock and any other capitol stock of the
     Corporation having general voting rights shall vote together as one class
     on all matters submitted to a vote of stockholders of the Corporation.

                                      A-3
<PAGE>   34
          (C)    Except as set forth herein, or as otherwise provided by law,
     holders of Series A Preferred Stock shall have no special voting rights and
     their consent shall not be required (except to the extent they are entitled
     to vote with holders of Common Stock as set forth herein) for taking any
     corporate action.

     Section 4. Certain Restrictions.

          (A)    Whenever quarterly dividends or other dividends or
     distributions payable on the Series A Preferred Stock as provided in
     Section 2 are in arrears, thereafter and until all accrued and unpaid
     dividends and distributions, whether or not declared, on shares of Series A
     Preferred Stock outstanding shall have been paid in full, the Corporation
     shall not:

               (i)    declare or pay dividends, or make any other distributions,
          on any shares of stock ranking junior (either as to dividends or upon
          liquidation, dissolution or winding up) to the Series A Preferred
          Stock;

               (ii)   declare or pay dividends, or make any other distributions,
          on any shares of stock ranking on a parity (either as to dividends or
          upon liquidation, dissolution or winding up) with the Series A
          Preferred Stock, except dividends paid ratably on the Series A
          Preferred Stock and all such parity stock on which dividends are
          payable or in arrears in proportion to the total amounts to which the
          holders of all such shares are then entitled;

               (iii) redeem or purchase or otherwise acquire for consideration
          shares of any stock ranking junior (either as to dividends or upon
          liquidation, dissolution or winding up) to the Series A Preferred
          Stock, provided that the Corporation may at any time redeem, purchase
          or otherwise acquire shares of any such junior stock in exchange for
          shares of any stock of the Corporation ranking junior (either as to
          dividends or upon dissolution, liquidation or winding up) to the
          Series A Preferred Stock; or

               (iv)  redeem or purchase or otherwise acquire for consideration
          any shares of Series A Preferred Stock, or any shares of stock ranking
          on a parity with the Series A Preferred Stock, except in accordance
          with a purchase offer made in writing or by publication (as determined
          by the Board of Directors) to all holders of such shares upon such
          terms as the Board of Directors, after consideration of the respective
          annual dividend rates and other relative rights and preferences of the
          respective series and classes, shall determine in good faith will
          result in fair and equitable treatment among the respective series or
          classes.

          (B)    The Corporation shall not permit any subsidiary of the
     Corporation to

                                      A-4
<PAGE>   35
     purchase or otherwise acquire for consideration any shares of stock of the
     Corporation unless the Corporation could, under paragraph (A) of this
     Section 4, purchase or otherwise acquire such shares at such time and in
     such manner.

     Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation shall become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Articles of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.

     Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made, ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

     Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarity exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of

                                      A-5
<PAGE>   36
Common Stock is changed or exchanged. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

     Section 8. No Redemption. The shares of Series A Preferred Stock shall not
be redeemable.

     Section 9. Rank. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all series of
any other class of the Corporation's Preferred Stock.

     Section 10. Amendment. If any shares of the Series A Preferred Stock are
outstanding, the Articles of Incorporation of the Corporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least a
majority of the outstanding shares of Series A Preferred Stock, voting together
as a single class.

     (ii) That these resolutions have been adopted in accordance with the
          requirements of, and pursuant to, Chapter 302A of the Minnesota
          Statutes and shall be effective when filed with the Minnesota
          Secretary of State.

     IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by its Secretary this 18th day of May, 2000.

                                        ----------------------------------
                                        Michael W. Malone
                                        Secretary

                                      A-6
<PAGE>   37
                                                                      EXHIBIT B

                            FORM OF RIGHT CERTIFICATE

Certificate No. R-                                                        Rights
                                                                    ------

     NOT EXERCISABLE AFTER 5:00 p.m., MINNEAPOLIS, MINNESOTA ON MAY 31, 2010 OR
     EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
     REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
     RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
     AN ACQUIRING PERSON (AS THAT TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND
     ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.

                                Right Certificate

                             POLARIS INDUSTRIES INC.
                            -------------------------

     This certifies that                      , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of May 18, 2000 (the "Rights Agreement"), between Polaris
Industries Inc., a Minnesota corporation (the "Company"), and Norwest Bank
Minnesota, N.A. (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., Minneapolis, Minnesota, on May 31, 2010 at the principal
office of the Rights Agent, or at the office of its successor as Rights Agent,
one one-hundredth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company, at a purchase price of $150.00 (one hundred and fifty
dollars) per one one-hundredth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share which may
be purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of            , 2000 based on
the Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.

                                      B-1
<PAGE>   38
     This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.

     In the event that any Person shall become an Acquiring Person (as such
terms are defined in the Rights Agreement), any Rights evidenced by this Right
Certificate that are or, after becoming an Acquiring Person, were beneficially
owned by any Acquiring Person or an Associate or Affiliate of such Acquiring
Person (as such terms are defined in the Rights Agreement) shall be null and
void.

     This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.

     Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.001 per Right or (ii) may be exchanged in whole or in part for the Company's
Common Stock.

     No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depository receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.

     No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.

     This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned, manually or by facsimile signature, by
the Rights Agent.

                                      B-2
<PAGE>   39
     WITNESS the manual or facsimile signature of the proper officer of the
Company. Dated as of             , 20  .

                                        POLARIS INDUSTRIES INC.

                                        By
                                          -----------------------------------
                                          Its
                                             ---------------------------------

Countersigned:

NORWEST BANK MINNESOTA, N.A.

By
  -------------------------------------
     Its
        ---------------------------------

                                      B-3
<PAGE>   40
                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such
               holder desires to transfer the Right Certificate.)

FOR VALUE RECEIVED
                  -------------------------------------------------------------

hereby sells, assigns and transfers unto
                                         --------------------------------------

-------------------------------------------------------------------------------
                  (Please print name and address of transferee)

this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint                      Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.

Dated:                           ,
           ---------------------- ----

                                            ------------------------------------
                                            Signature

Signature Medallion Guaranteed:

              Signatures must be medallion guaranteed by a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States.

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

              The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).

                                            ------------------------------------
                                            Signature

                                      B-4
<PAGE>   41

             Form of Reverse Side of Right Certificate -- continued

                          FORM OF ELECTION TO PURCHASE

  (To be executed if holder desires to exercise Rights represented by the Right
                                 Certificate.)

To:      POLARIS INDUSTRIES INC.

              The undersigned hereby irrevocably elects to exercise
                             Rights represented by this Right Certificate to
purchase the Preferred Shares (or other securities, if any) issuable upon the
exercise of such Rights and requests that certificates for such Preferred Shares
be issued in the name of:

Please insert social security
or other identifying number

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

------------------------------------------------------------------------------
                         (Please print name and address)

If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the remaining of such Rights shall be
registered in the name of and delivered to:

Please insert social security
or other identifying number

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

------------------------------------------------------------------------------
                         (Please print name and address)

Dated:                     ,
      --------------------- ----

                                        -------------------------
                                        Signature

Signature Medallion Guaranteed:

              Signatures must be medallion guaranteed by a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States.

                                      B-5
<PAGE>   42

             Form of Reverse Side of Right Certificate - - continued

              The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).

                                                         -----------------------
                                                         Signature

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

                                     NOTICE

              The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.

              In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.

                                      B-6
<PAGE>   43
                                                                       EXHIBIT C
                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES
                                       OF
                             POLARIS INDUSTRIES INC.

Introduction

     On May 18, 2000, the Board of Directors of Polaris Industries Inc. (the
"Company"), declared a dividend of one preferred share purchase right (a
"Right") per share for each outstanding share of common stock, par value $.01
(the "Common Shares"), of the Company. The dividend is payable on June 1, 2000
(the "Record Date") to shareholders of record at the close of business on that
date. The description and terms of the Rights are set forth in a Rights
Agreement (the " Rights Agreement"), dated as of May 18, 2000, between the
Company and Norwest Bank Minnesota, N.A., as Rights Agent (the "Rights Agent").

     The description that follows of the terms of the Rights Agreement and of
the Rights issued thereunder is a general description only and does not purport
to be complete. The terms of the Rights will in all cases be governed by the
Rights Agreement. A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A dated May 25, 2000. A copy of the Rights Agreement is available free of
charge from the Company.

Purchase Price

     Each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock, par
value $.01 (the "Preferred Shares"), of the Company at a price of $150.00 (one
hundred and fifty dollars) per one-hundredth of a Preferred Share (the "Purchase
Price"), subject to adjustment.

Distribution Date

     Initially, the Rights will be attached to all certificates representing the
Common Shares then outstanding, and no separate certificates evidencing the
Rights ("Rights Certificates") will be distributed. The Rights will separate
from the Common Shares and a "Distribution Date" will occur upon the earlier of
(i) the date that a person or group of affiliated or associated persons becomes
an "Acquiring Person" (as defined below), or (ii) ten (10) business days (or
such later date as the Board shall determine) following the commencement of a
tender offer or exchange offer that would result in a person or group becoming
an "Acquiring Person." Except as set forth below, an "Acquiring Person" is a
person or group of affiliated or associated persons who has acquired beneficial
ownership of 15% or more of the outstanding Common Shares. The term "Acquiring
Person" excludes (i) the Company, (ii) any subsidiary of the Company, (iii) any
employee benefit plan of the Company or any subsidiary of the Company, and (iv)
any person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan.

<PAGE>   44

Exercisability

     The Rights are not exercisable until the occurrence of the Distribution
Date. Until the occurrence of the Distribution Date, (i) the Rights will be
evidenced by the Common Shares certificates and will be transferred with and
only with such Common Shares certificates, (ii) new Common Shares certificates
issued after the Record Date will contain a notation incorporating the Rights
Agreement by reference, and (iii) the surrender for transfer of any certificates
for Common Shares outstanding will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificates.

     As soon as practicable after the occurrence of the Distribution Date,
Rights Certificates will be mailed to holders of record of the Common Shares as
of the close of business on the Distribution Date and, thereafter, the separate
Rights certificates alone will represent the Rights. The Rights will expire at
the close of business on May 31, 2010, unless extended or earlier redeemed by
the Company.

Adjustments

     The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) if holders of the Preferred Shares are granted certain rights or
warrants to subscribe for Preferred Shares or convertible securities at less
than the current market price of the Preferred Shares, or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above). With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
amount to at least 1% of the Purchase Price. No fractional Rights will be issued
and, in lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Shares on the last trading date prior to the date of
exercise.

Preferred Shares

     Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a share of
Preferred Shares purchasable upon exercise of each Right should approximate the
value of one share of Common Shares. Preferred Shares purchasable upon exercise
of the Rights will not be redeemable. Each share of the Preferred Shares will be
entitled to a quarterly dividend payment of 100 times the dividend declared per
share of Common Shares. Each share of Preferred Shares will have 100 votes,
voting together with the shares of Common Shares. These rights are protected by
customary antidilution provisions.

Flip-In Provision

     In the event that, at any time following the Distribution Date, a person
becomes an Acquiring Person, each holder of a Right will thereafter have the
right to receive, upon exercise of the Right, Common Shares (or, in certain
circumstances, cash, property or other securities of the Company) having a value
equal to two times the exercise price of the Right. Notwithstanding any of the

<PAGE>   45
foregoing, following the occurrence of the event set forth in this paragraph,
all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void and nontransferable and any holder of any such Right (including any
purported transferee or subsequent holder) will be unable to exercise or
transfer any such Right.

Flip-Over Provision

     In the event that, at any time following the Distribution Date, the Company
is acquired in certain merger or other business combination transactions or 50%
or more of the Company's assets or earning power is sold, mortgaged or
transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, common shares of the acquiring company having a value equal to two
times the exercise price of the Right.

Redemption

     At any time until the Shares Acquisition Date, the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right by resolution of
the Board of Directors.

Exchange

     At any time after a Person becomes an Acquiring Person (subject to certain
exceptions), and prior to the acquisition by a Person of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
all or part of the Rights for Common Shares at an exchange ratio per Right equal
to the result obtained by dividing the exercise price of a Right by the current
per share market price of the Common Shares, subject to adjustment.

Rights of Holders

     Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Shares (or other consideration) of the Company or for
common shares of the acquiring company as set forth above.

Amendments

     Any of the provisions of the Rights Agreement may be amended by resolution
of the Company's Board of Directors prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by
resolution of the Company's Board in order to make changes that do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person or its affiliates or associates).<PAGE>   1
                                                                     EXHIBIT 4.5

                                     FORM OF

                SUBORDINATED INDENTURE, VEC AND BANK OF NEW YORK

                            VALERO ENERGY CORPORATION

                                       AND

                        THE BANK OF NEW YORK, as Trustee

                                    Indenture

                          Dated as of ________________

                          Subordinated Debt Securities

                            VALERO ENERGY CORPORATION

<PAGE>   2

         Reconciliation and tie between Trust Indenture Act of 1939 and

                    Indenture, dated as of _________________

<TABLE>
<CAPTION>
Trust Indenture Act Section                        Indenture Section
<S>                                                <C>
Sec. 310(a)(1)...................................................608
        (a)(2)...................................................608
        (a)(3)........................................Not Applicable
        (a)(4) .......................................Not Applicable
        (a)(5)...................................................608
Sec. 311(a)......................................................609
        (b)......................................................605
Sec. 312(a).................................................605, 703
        (b).................................................701, 702
        (c)......................................................702
Sec. 313(a)...................................................703(a)
        (b)(1)........................................Not Applicable
        (b)(2)................................................703(b)
        (c)...................................................703(c)
        (d)...................................................703(c)
Sec. 314(a)(1)...................................................704
        (a)(2)...................................................704
        (a)(3)...................................................704
        (a)(4)..................................................1005
        (b)...........................................Not Applicable
        (c)(1)...................................................102
        (c)(2)...................................................102
        (c)(3)........................................Not Applicable
        (d)...........................................Not Applicable
        (e)......................................................102
Sec. 315(a)...................................................601(a)
        (b)......................................................602
        (c)...................................................601(b)
        (d)...................................................601(c)
        (d)(1).....................................601(a)(1), (c)(1)
        (d)(2).............................................601(c)(2)
        (d)(3).............................................601(c)(3)
        (e)......................................................514
Sec. 316(a)(1)(A)...........................................502, 512
        (a)(1)(B)................................................513
        (a)(2)........................................Not Applicable
        (b)......................................................508
        (c)...........................................Not Applicable
Sec. 317(a)(1)...................................................503
        (a)(2)...................................................504
        (b).....................................................1003
Sec. 318(a)......................................................108
</TABLE>

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

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

<PAGE>   3

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                      Page
<S>                                                                                                   <C>
PARTIES .................................................................................................1

RECITALS ................................................................................................1

ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION......................................1

SECTION 101. Definitions.................................................................................1
SECTION 102. Compliance Certificates and Opinions........................................................9
SECTION 103. Form of Documents Delivered to Trustee......................................................9
SECTION 104. Acts of Holders............................................................................10
SECTION 105. Notices etc. to Trustee and Company........................................................12
SECTION 106. Notice to Holders of Securities; Waiver....................................................12
SECTION 107. Language of Notices, etc...................................................................13
SECTION 108. Conflict with Trust Indenture Act..........................................................13
SECTION 109. Effect of Headings and Table of Contents...................................................13
SECTION 110. Successors and Assigns.....................................................................13
SECTION 111. Separability Clause........................................................................14
SECTION 112. Benefits of Indenture......................................................................14
SECTION 113. Governing Law..............................................................................14
SECTION 114. Legal Holidays.............................................................................14

ARTICLE TWO SECURITY FORMS..............................................................................14

SECTION 201. Forms Generally............................................................................14
SECTION 202. Form of Trustee's Certificate of Authentication............................................15

ARTICLE THREE THE SECURITIES............................................................................15

SECTION 301. Amount Unlimited; Issuable in Series.......................................................15
SECTION 302. Denominations..............................................................................18
SECTION 303. Execution, Authentication, Delivery and Dating.............................................18
SECTION 304. Temporary Securities.......................................................................19
SECTION 305. Registration, Transfer and Exchange........................................................20
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities...........................................23
SECTION 307. Payment of Interest; Interest Rights Preserved.............................................24
SECTION 308. Persons Deemed Owners......................................................................25
SECTION 309. Cancellation...............................................................................26
SECTION 310. Computation of Interest....................................................................26
SECTION 311. Cusip Numbers..............................................................................26

ARTICLE FOUR SATISFACTION AND DISCHARGE.................................................................26

SECTION 401. Satisfaction and Discharge of Indenture....................................................26
SECTION 402. Application of Trust Money.................................................................28

ARTICLE FIVE REMEDIES...................................................................................28

SECTION 501. Events of Default..........................................................................28
SECTION 502. Acceleration of Maturity; Rescission and Annulment.........................................29
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee............................30
</TABLE>

                                       i
<PAGE>   4

<TABLE>
<S>                                                                                                   <C>
SECTION 504. Trustee May File Proofs of Claim...........................................................31
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or Coupons.....................32
SECTION 506. Application of Money Collected.............................................................32
SECTION 507. Limitation on Suits........................................................................32
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest..................33
SECTION 509. Restoration of Rights and Remedies.........................................................33
SECTION 510. Rights and Remedies Cumulative.............................................................33
SECTION 511. Delay or Omission Not Waiver...............................................................34
SECTION 512. Control by Holders of Securities...........................................................34
SECTION 513. Waiver of Past Defaults....................................................................34
SECTION 514. Undertaking for Costs......................................................................34
SECTION 515. Waiver of Stay, Extension or Usury Laws....................................................35

ARTICLE SIX THE TRUSTEE.................................................................................35

SECTION 601. Certain Duties and Responsibilities........................................................35
SECTION 602. Notice of Defaults.........................................................................37
SECTION 603. Certain Rights of Trustee..................................................................37
SECTION 604. Not Responsible for Recitals or Issuance of Securities.....................................37
SECTION 605. May Hold Securities........................................................................38
SECTION 606. Money Held in Trust........................................................................38
SECTION 607. Compensation and Reimbursement.............................................................38
SECTION 608. Corporate Trustee Required; Eligibility....................................................39
SECTION 609. Resignation and Removal; Appointment of Successor..........................................39
SECTION 610. Acceptance of Appointment by Successor.....................................................40
SECTION 611. Merger, Conversion, Consolidation or Succession to Business................................41
SECTION 612. Appointment of Authenticating Agent........................................................42

ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.........................................43

SECTION 701. Company to Furnish Trustee Names and Addresses of Holders..................................43
SECTION 702. Preservation of Information; Communications to Holders.....................................44
SECTION 703. Reports by Trustee.........................................................................44
SECTION 704. Reports by Company.........................................................................44

ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE..........................................45

SECTION 801. Consolidations and Mergers of Company and Sales, Leases and
             Conveyances Permitted Subject to Certain Conditions........................................45
SECTION 802. Rights and Duties of Successor Corporation.................................................46
SECTION 803. Officers' Certificate and Opinion of Counsel...............................................46

ARTICLE NINE SUPPLEMENTAL INDENTURES....................................................................46

SECTION 901. Supplemental Indentures without Consent of Holders.........................................46
SECTION 902. Supplemental Indentures with Consent of Holders............................................47
SECTION 903. Execution of Supplemental Indentures.......................................................48
SECTION 904. Effect of Supplemental Indentures..........................................................48
SECTION 905. Conformity with Trust Indenture Act........................................................49
SECTION 906. Reference in Securities to Supplemental Indentures.........................................49
</TABLE>

                                       ii
<PAGE>   5

<TABLE>
<S>                                                                                                   <C>
ARTICLE TEN COVENANTS...................................................................................49

SECTION 1001. Payment of Principal, Premium, if any, and Interest.......................................49
SECTION 1002. Maintenance of Office or Agency...........................................................49
SECTION 1003. Money for Securities Payments to be Held in Trust.........................................50
SECTION 1004. Additional Amounts........................................................................52
SECTION 1005. Statement as to Compliance................................................................52
SECTION 1006. Waiver of Certain Covenants...............................................................53

ARTICLE ELEVEN SUBORDINATION............................................................................53

SECTION 1101. Securities Subordinated to Senior Indebtedness............................................53
SECTION 1102. No Payment on Securities in Certain Circumstances.........................................53
SECTION 1103. Securities Subordinated to Prior Payment of All Senior
              Indebtedness on Dissolution, Liquidation or Reorganization................................54
SECTION 1104. Subrogation to Rights of Holders of Senior Indebtedness...................................55
SECTION 1105. Obligations of the Company Unconditional..................................................56
SECTION 1106. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice...................56
SECTION 1107. Application by Trustee of Amounts Deposited with It.......................................57
SECTION 1108. Subordination Rights Not Impaired by Acts or Omissions of the Company
              or Holders of Senior Indebtedness.........................................................57
SECTION 1109. Trustee to Effectuate Subordination of Securities.........................................57
SECTION 1110. Right of Trustee to Hold Senior Indebtedness..............................................58
SECTION 1111. Article Eleven Not to Prevent Events of Default...........................................58
SECTION 1112. No Fiduciary Duty of Trustee to Holders of Senior Indebtedness............................58
SECTION 1113. Article Applicable to Paying Agent........................................................58

ARTICLE TWELVE REDEMPTION OF SECURITIES.................................................................59

SECTION 1201. Applicability of Article..................................................................59
SECTION 1202. Election to Redeem; Notice to Trustee.....................................................59
SECTION 1203. Selection by Trustee of Securities to be Redeemed.........................................59
SECTION 1204. Notice of Redemption......................................................................59
SECTION 1205. Deposit of Redemption Price...............................................................60
SECTION 1206. Securities Payable on Redemption Date.....................................................61
SECTION 1207. Securities Redeemed in Part...............................................................61

ARTICLE THIRTEEN SINKING FUNDS..........................................................................62

SECTION 1301. Applicability of Article..................................................................62
SECTION 1302. Satisfaction of Sinking Fund Payments with Securities.....................................62
SECTION 1303. Redemption of Securities for Sinking Fund.................................................63

ARTICLE FOURTEEN REPAYMENT AT THE OPTION OF HOLDERS.....................................................63

SECTION 1401. Applicability of Article..................................................................63

ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES.......................................................63

SECTION 1501. Purposes for Which Meetings May Be Called.................................................63
SECTION 1502. Call, Notice and Place of Meetings........................................................64
SECTION 1503. Persons Entitled to Vote at Meetings......................................................64
SECTION 1504. Quorum; Action............................................................................64
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings.......................65
</TABLE>

                                      iii
<PAGE>   6

<TABLE>
<S>                                                                                                   <C>
SECTION 1506. Counting Votes and Recording Action of Meetings...........................................66

ARTICLE SIXTEEN MISCELLANEOUS PROVISIONS................................................................66

SECTION 1601. Securities in Foreign Currencies..........................................................66
</TABLE>

                                       iv
<PAGE>   7

     INDENTURE, dated as of ___________________, between VALERO ENERGY
CORPORATION, a Delaware corporation (hereinafter called the "Company"), having
its principal office at 7990 West IH 10, San Antonio, Texas 78230-4715, and THE
BANK OF NEW YORK, a New York banking corporation, as Trustee (hereinafter called
the "Trustee") having its Corporate Trust Office at 101 Barclay Street, Floor 21
West, New York, New York 10286.

                             RECITALS OF THE COMPANY

     The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures, notes
or other evidences of indebtedness (hereinafter called the "Securities"),
unlimited as to principal amount, to bear such rates of interest, to mature at
such time or times, to be issued in one or more series and to have such other
provisions as shall be fixed as hereinafter provided.

     The Company has duly authorized the execution and delivery of this
Indenture and all things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.

     NOW, THEREFORE, in consideration of the premises and the sum of one dollar
duly paid by the Company to the Trustee, the receipt of which is hereby
acknowledged, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows:

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                  ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

     SECTION 101. Definitions.

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

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

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

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

                                       1
<PAGE>   8

          (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.

     Certain terms, used principally in Article Six, are defined in that
Article.

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

     "Additional Amounts" means any additional amounts which are required by a
Security or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain matters, including,
without limitation, taxes imposed on certain Holders, and which are owing to
such Holders.

     "Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act of 1933, as amended, or any successor rule thereunder.

     "Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 612 to act on behalf of the Trustee to authenticate Securities of one
or more series.

     "Authorized Newspaper" means a newspaper, in an 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, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.

     "Bearer Security" means any Security in the form established pursuant to
Section 201 which is payable to bearer.

     "Board of Directors" means either the Board of Directors of the Company or
the Executive Committee thereof.

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

     "Business Day" means any day other than a day on which banking institutions
in The City of New York or in the City of San Antonio, Texas are authorized or
required by law to close, except as may otherwise be provided in the form of
Securities of any particular series pursuant to the provisions of this
Indenture.

     "Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.

     "Capitalized Lease Obligation" of any Person means any obligation of such
Person to pay rent or other amounts under a lease of property, real or personal,
that is required to be capitalized

                                       2
<PAGE>   9

for financial reporting purposes in accordance with GAAP; and the amount of such
obligation shall be the capitalized amount thereof determined in accordance with
GAAP.

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

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

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

     "Consolidated Net Tangible Assets" means the total amount of assets shown
on a consolidated balance sheet of the Company and its Subsidiaries, prepared in
accordance with generally accepted accounting principles, less (i) all current
liabilities (except current maturities of long-term debt and notes payable) and
(ii) goodwill and other intangible assets included on such balance sheet.

     "Controlled Subsidiary" means any corporation more than 80% of the
outstanding Voting Stock, except for qualifying shares, of which shall at the
time be owned directly or indirectly by the Company.

     "Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be administered, which office
is located at 101 Barclay Street, Floor 21 West, New York, New York 10286.

     "Corporation" includes corporations, associations, companies and business
trusts.

     "Coupon" means any interest coupon appertaining to a Bearer Security.

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

     "Designated Senior Indebtedness," unless otherwise provided with respect to
the Securities of a series as contemplated by Section 301, means any Senior
Indebtedness that (i) in the instrument evidencing the same or the assumption or
guarantee thereof (or related documents to which the Company is a party) is
expressly designated as "Designated Senior Indebtedness" for purposes of this
Indenture and (ii) satisfies such other conditions as may be provided with
respect to the Securities of such series; provided that such instruments or
documents may place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness.

     "Disqualified Capital Stock" means, when used with respect to the
Securities of any series, (a) except as set forth in (b), with respect to any
Person, Capital Stock of such Person that, by its terms or by the terms of any
security into which it is convertible, exercisable or

                                       3
<PAGE>   10

exchangeable, is, or upon the happening of an event or the passage of time would
be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such Person or any Subsidiary of such Person, in whole or in
part, on or prior to the last Stated Maturity of the Securities of such series,
and (b) with respect to any Subsidiary of such Person (including with respect to
any Subsidiary of the Company), any Capital Stock other than any common stock
with no preference, privileges, or redemption or repayment provisions.

     "Dollars" or "$" or any similar reference shall mean the currency of the
United States, except as may otherwise be provided in the form of Securities of
any particular series pursuant to the provisions of this Indenture.

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

     "Funded Debt" means any indebtedness for money borrowed, created, issued,
incurred, assumed or guaranteed which would, in accordance with generally
accepted accounting principles, be classified as long-term debt, but in any
event including all indebtedness for money borrowed, whether secured or
unsecured, maturing more than one year, or extendible at the option of the
obligor to a date more than one year, after the date of determination thereof
(excluding any amount thereof included in current liabilities).

     "GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.

     "Holder", when used with respect to any Security, means in the case of a
Registered Security, the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security, the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.

     "Indebtedness" of any Person means, without duplication, (i) all
indebtedness of such Person for borrowed money (whether or not the recourse of
the lender is to the whole of the assets of such Person or only to a portion
thereof), (ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of such Person in
respect of letters of credit or other similar instruments (or reimbursement
obligations with respect thereto), other than standby letters of credit,
performance bonds and other obligations issued by or for the account of such
Person in the ordinary course of business, to the extent not drawn or, to the
extent drawn, if such drawing is reimbursed not later than the third Business
Day following demand for reimbursement, (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of property or services, except trade
payables and accrued expenses incurred in the ordinary course of business, (v)
all Capitalized Lease Obligations of such Person, (vi) all Indebtedness of
others secured by a lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person (provided that if the obligations so
secured have not been assumed in full by such Person or are not otherwise such
Person's legal liability in full, then such obligations shall be deemed to be in
an amount equal to the greater of (a) the lesser of (1) the full amount of such
obligations and (2) the fair market value of such assets, as determined in

                                       4
<PAGE>   11

good faith by the Board of Directors of such Person, which determination shall
be evidenced by a Board Resolution, and (b) the amount of obligations as have
been assumed by such Person or which are otherwise such Person's legal
liability), and (vii) all Indebtedness of others (other than endorsements in the
ordinary course of business) guaranteed by such Person to the extent of such
guarantee.

     "Indenture" means this instrument as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, and shall include each
Officers' Certificate delivered to the Trustee pursuant to Section 303.

     "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, and, when used with respect to a Security which provides for the
payment of Additional Amounts pursuant to Section 1004, includes such Additional
Amounts.

     "Interest Payment Date" means the Stated Maturity of an installment of
interest on the applicable Securities.

     "Junior security" of a Person means, when used with respect to the
Securities of any series, any Qualified Capital Stock of such Person or any
Indebtedness of such Person that is subordinated in right of payment to the
Securities of such series and has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the last Stated
Maturity of the Securities of such series.

     "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, notice of redemption, request for redemption or
otherwise.

     "Mortgages" means mortgages, liens, pledges, security interests or other
encumbrances.

     "Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President, a Vice President or the Treasurer, and by an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered
to the Trustee.

     "Opinion of Counsel" means a written opinion of counsel, who may (except as
otherwise expressly provided in this Indenture) be an employee of or counsel for
the Company, or other counsel acceptable to the Trustee.

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

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

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

                                       5
<PAGE>   12

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

          (iii) Securities which have been paid pursuant to Section 306 or in
exchange for or 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 Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Securities for quorum purposes, the principal amount of
an Original Issue Discount Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such purposes shall
be equal to the amount of the principal thereof that could be declared to be due
and payable pursuant to the terms of such Original Issue Discount Security at
the time the taking of such action by the Holders of such requisite principal
amount is evidenced to the Trustee as provided in Section 104(a), and, provided
further, that Securities owned beneficially by the Company or any other obligor
upon the Securities or any Affiliate of the Company or such other obligor, other
than Securities purchased in connection with the distribution or trading
thereof, shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or such other obligor.

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

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

     "Payment Default" has the meaning specified in Section 501.

     "Payment Notice" has the meaning specified in Section 1102.

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

                                       6
<PAGE>   13

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

     "Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.

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

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

     "Registered Security" means any Security established pursuant to Section
201 which is registered in the Security Register.

     "Regular Record Date" for the interest payable on a Registered Security on
any Interest Payment Date means the date, if any, specified in such Security as
the "Regular Record Date".

     "Responsible Officer" when used with respect to the Trustee means the
chairman or vice-chairman of the board of directors, the chairman or vice
chairman of the executive committee of the board of directors, the president,
any vice president (whether or not designated by a number or a word or words
added before or after the title "vice president"), the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.

     "Security" or "Securities" means any Security or Securities, as the case
may be, authenticated and delivered under this Indenture.

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

     "Senior Indebtedness" of the Company, unless otherwise provided with
respect to the Securities of a series as contemplated by Section 301, means (i)
all Indebtedness of the Company, whether currently outstanding or hereafter
issued, unless, by the terms of the instrument creating or evidencing such
Indebtedness, it is provided that such Indebtedness is not superior in right of
payment to the Securities or to other Indebtedness which is pari passu with or
subordinated to the Securities, and (ii) any modifications, refunding,
deferrals, renewals or extensions of any such Indebtedness or securities, notes
or other evidences of Indebtedness issued in exchange for such Indebtedness;
provided that in no event shall "Senior Indebtedness" include (a) Indebtedness
of the Company owed or owing to any Subsidiary of the Company or

                                       7
<PAGE>   14

any officer, director or employee of the Company or any Subsidiary of the
Company, (b) Indebtedness to trade creditors or (c) any liability for taxes owed
or owing by the Company.

     "Senior Payment Default" has the meaning specified in Section 1102.

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

     "Stated Maturity" when used with respect to any Security or any installment
of principal thereof or interest thereon means the date specified in such
Security or 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" means (i) any corporation of which at the time of
determination the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% of the shares of Voting Stock, (ii) any
general partnership, joint venture, business trust or similar entity, of which
at the time of determination the Company and/or one or more Subsidiaries owns or
controls directly or indirectly more than 50% or the outstanding partnership or
similar interests and (iii) any limited partnership of which the Company or any
of its Subsidiaries is a general partner. "Wholly-owned", when used with
reference to a Subsidiary, means a Subsidiary of which all of the outstanding
capital stock (except for qualifying shares) or partnership or similar
interests, as applicable, is owned by the Company or by one or more wholly-owned
Subsidiaries.

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

     "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.

     "United States" means the United States of America (including the States
and the District of Columbia), its territories and possessions and other areas
subject to its jurisdiction.

     "United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.

     "U.S. Depository" or "Depository" means, with respect to the Securities of
any series issuable or issued in whole or in part in the form of one or more
global Securities, the Person designated as U.S. Depository by the Company
pursuant to Section 301, which must be a

                                       8
<PAGE>   15

clearing agency registered under the Securities Exchange Act of 1934, as
amended, and, if so provided pursuant to Section 301 with respect to the
Securities of any series, any successor to such Person. If at any time there is
more than one such Person, "U.S. Depository" shall mean, with respect to any
series of Securities, the qualifying entity which has been appointed with
respect to the Securities of that series.

     "Vice President" when used with respect to the Company shall mean any Vice
President of the Company whether or not designated by a number or a word or
words added before or after the title "Vice President".

     "Voting Stock" means stock of the class or classes having general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such corporation provided that, for the
purposes hereof, stock, which carries only the right to vote conditionally on
the happening of an event shall not be considered voting stock whether or not
such event shall have happened.

     SECTION 102. Compliance Certificates and Opinions.

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

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

     SECTION 103. Form of Documents Delivered to Trustee.

     In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only

                                       9
<PAGE>   16

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

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

     SECTION 104. Acts of Holders.

          (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 an agent duly
appointed in writing. If, but only if, Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly required,
to the Company. Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments and so voting
at any such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of a Security, shall
be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company and any agent of the Trustee
or the Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 1506.

          Without limiting the generality of this Section 104, unless otherwise
established in or pursuant to a Board Resolution or set forth or determined in
an Officers' Certificate, or established in one or more indentures supplemental
hereto, pursuant to Section 301, a Holder, including a U.S. Depository that is a
Holder of a global Security, may make, give or take, by a proxy, or proxies,
duly appointed in writing, any request, demand, authorization, direction,
notice, consent, waiver or other action provided in this Indenture to be made,
given or taken by Holders, and a U.S. Depository that is a Holder of a global
Security may provide its proxy or

                                       10
<PAGE>   17

proxies to the beneficial owners of interests in any such global Security
through such U.S. Depository's standing instructions and customary practices.

          The Company shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interest in any permanent global Security
held by a U.S. Depository entitled under the procedures of such U.S. Depository
to make, give or take, by a proxy or proxies duly appointed in writing, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided in this Indenture to be made, given or taken by Holders. If such
a record date is fixed, the Holders on such record date or their duly appointed
proxy or proxies, and only such Persons shall be entitled to make, give or take
such request, demand, authorization, direction, notice, consent, waiver or other
action, whether or not such Holders remain Holders after such record date. No
such request, demand, authorization, direction, notice, consent, waiver or other
action shall be valid or effective if made, given or taken more than 90 days
after such record date.

          (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.

          (c) The ownership of Registered Securities and the principal amount
and serial numbers of Registered Securities held by any Person, and the date of
holding the same, shall be proved by the Security Register.

          (d) The principal amount and serial numbers of Bearer Securities held
by any Person, and the date of holding the same, may be proved by the production
of such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary reasonably acceptable to the
Company, 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 depositary, 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 (1) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Security is produced, or (2) such Bearer Security is produced to the
Trustee by some other Person, or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding. The principal amount and serial numbers of Bearer Securities held
by the Person so executing such instrument or writing and the date of holding
the same may also be proved in any other manner which the Trustee deems
sufficient.

          (e) If the Company shall solicit from the Holders of any Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by 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

                                       11
<PAGE>   18

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 be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
of Registered Securities 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.

          (f) Any request, demand, authorization, direction, notice, consent,
waiver or other action by 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 or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.

     SECTION 105. Notices etc. to Trustee and Company.

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

          (1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, 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, postage prepaid, via certified mail, return receipt
requested, to the Company addressed to the attention of its Treasurer at the
address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company.

     SECTION 106. Notice to Holders of Securities; Waiver.

     Except as otherwise expressly provided herein or in the form of Securities
of any particular series pursuant to the provisions of this Indenture, where
this Indenture provides for notice to Holders of Securities of any event,

          (1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each Holder
of a Registered Security affected by such event, at his address as it appears in
the Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such Notice; and

          (2) such notice shall be sufficiently given to Holders of Bearer
Securities, if any, if published in an Authorized Newspaper in The City of New
York and, if the Securities of such series are then listed on any stock exchange
outside the United States, in an Authorized Newspaper in such city as the
Company shall advise the Trustee that such stock exchange so requires, on a
Business Day at least twice, the first such publication to be not earlier than
the earliest date and not later than the latest date prescribed for the giving
of such notice.

                                       12
<PAGE>   19

     In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Registered Security 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 case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.

     In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice mailed to
Holders of Registered Securities as provided above.

     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 of Securities 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 107. Language of Notices, etc.

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

     SECTION 108. Conflict with Trust Indenture Act.

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

     SECTION 109. Effect of Headings and Table of Contents.

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

     SECTION 110. Successors and Assigns.

     All covenants and agreements in this Indenture by the parties hereto shall
bind the successors and assigns of such parties, whether so expressed or not.

                                       13
<PAGE>   20

     SECTION 111. Separability Clause.

     In case any provision in this Indenture or in the Securities or coupons
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 112. Benefits of Indenture.

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

     SECTION 113. Governing Law.

     This Indenture and the Securities and coupons shall be governed by and
controlled in accordance with the laws of the State of New York without regard
to the conflicts of laws provisions thereof.

     SECTION 114. Legal Holidays.

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

                                  ARTICLE TWO

                                 SECURITY FORMS

     SECTION 201. Forms Generally.

     The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series, related coupons, if any, and temporary
global Securities, if any, shall be in the form established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, shall have
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto and
may have such letters, numbers or other marks of identification and such legends
or endorsements placed thereon as may, consistently herewith, be determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.

                                       14
<PAGE>   21

     Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, the Securities of each series shall be issuable in
registered form without coupons. If so provided as contemplated by Section 301,
the Securities of a series also shall be issuable in bearer form, with or
without interest coupons attached.

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

     SECTION 202. Form of Trustee's Certificate of Authentication.

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

                                             THE BANK OF NEW YORK,
                                               as Trustee

Dated:                                       By:
      --------------------                      --------------------------------
                                                  Authorized Signatory

                                 ARTICLE THREE

                                 THE SECURITIES

     SECTION 301. Amount Unlimited; Issuable in Series.

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

     The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto:

          (1) the title of the Securities and the series in which such
Securities shall be included;

          (2) any limit upon the aggregate principal amount of the Securities of
such title or the Securities of such series which may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Section 304, 305, 306, 906 or 1207);

          (3) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both; any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa; and whether any Securities
of the series are to be issuable initially in global form and, if so, (i)
whether beneficial owners of

                                       15
<PAGE>   22

interests in any such global Security may exchange such interests for Securities
of such series and of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than in the
manner specified in Section 305 and (ii) the name of the depository or the U.S.
Depository, as the case may be, with respect to any global Security;

          (4) 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;

          (5) if Securities of the series are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary Bearer
Security in global form (representing all of the Outstanding Bearer Securities
of the series) payable in respect of an Interest Payment Date prior to the
exchange of such temporary Bearer Security for definitive Securities of the
series shall be paid to any clearing organization with respect to the portion of
such temporary Bearer Security held for its account and, in such event, the
terms and conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be credited to
the Persons entitled to interest payable on such Interest Payment Date;

          (6) the date or dates on which the principal of such Securities is
payable;

          (7) the rate or rates at which such Securities shall bear interest, if
any, or any method by which such rate or rates shall be determined, the date or
dates from which such interest shall accrue, the Interest Payment Dates on which
such interest shall be payable and the Regular Record Date for the interest
payable on Registered Securities on any Interest Payment Date, whether and under
what circumstances Additional Amounts on such securities shall be payable in
respect of specified taxes, assessments or other governmental charges withheld
or deducted and, if so, whether the Company has the option to redeem the
affected Securities rather than pay such Additional Amounts, and the basis upon
which interest shall be calculated if other than that of a 360 day year of
twelve 30-day months;

          (8) the place or places, if any, in addition to or other than the
Borough of Manhattan, The City of New York, where the principal of (and premium,
if any) and interest on or Additional Amounts, if any, payable in respect of
such Securities shall be payable;

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

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

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

                                       16
<PAGE>   23

denominations in which Bearer Securities of the series, if any, shall be
issuable if other than the denomination of $5,000;

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

          (13) if other than such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public or
private debts, the coin or currency, including composite currencies, in which
payment of the principal of (and premium, if any) and interest, if any, on, and
Additional Amounts in respect of such Securities shall be payable;

          (14) if the principal of (and premium, if any) or interest, if any,
on, and Additional Amounts in respect of, such Securities are to be payable, at
the election of the Company or a Holder thereof, in a coin or currency,
including composite currencies, other than that in which the Securities are
stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made;

          (15) if the amount of payments of principal of (and premium, if any)
or interest, if any, on, and Additional Amounts in respect of, such Securities
may be determined with reference to an index, formula or other method or based
on a coin or currency other than that in which the Securities are stated to be
payable, the manner in which such amounts shall be determined;

          (16) the right, if any, of the Company to defer payments of interest
by extending the interest payment periods and specify the duration of such
extension, the Interest Payment Dates on which such interest shall be payable
and whether and under what circumstances additional interest on amounts deferred
shall be payable;

          (17) the limitation, if any, on the Company's right to pay dividends
on, make distributions with respect to, or redeem, purchase or acquire, or make
a liquidation payment with respect to, any of its capital stock or comparable
equity interest;

          (18) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and terms of such certificates,
documents or conditions; and

          (19) any other terms of such Securities (which terms shall not be
inconsistent with the provisions of this Indenture).

     All Securities of any one series and the coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except as to
denomination and the rate or rates of interest, if any, and Stated Maturity, the
date from which interest, if any, shall accrue and except as may otherwise be
provided in or pursuant to such Board Resolution and set forth in such Officers'
Certificate or in any such 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 for issuances of additional Securities of such series.

                                       17
<PAGE>   24

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

     The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Eleven.

     SECTION 302. Denominations.

     Unless other denominations and amounts may from time to time be fixed by or
pursuant to a Board Resolution, the Registered Securities of each series, if
any, shall be issuable in registered form without coupons in denominations of
$1,000 and any integral multiple thereof and the Bearer Securities of each
series, if any, shall be issuable in the denomination of $5,000, or in such
other denominations and amounts as may from time to time be fixed by or pursuant
to a Board Resolution.

     SECTION 303. Execution, Authentication, Delivery and Dating.

     The Securities shall be executed on behalf of the Company by its Chairman
of the Board, President, Vice President serving as Chief Financial Officer or
its Treasurer and attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Securities may be manual or
facsimile. Coupons shall bear the facsimile signature of the Treasurer or any
Assistant Treasurer of the Company.

     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 after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupons appertaining thereto, executed by the Company to the Trustee for
authentication, together with the Board Resolution and Officers' Certificate or
supplemental indenture with respect to such Securities referred to in Section
301 and a Company Order for the authentication and delivery of such Securities,
and the Trustee in accordance with the Company Order and subject to the
provisions hereof shall authenticate and make available for delivery such
Securities. In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,

          (a) the form and terms of such Securities and coupons, if any, have
been established in conformity with the provisions of this Indenture;

          (b) that all conditions precedent to the authentication and delivery
of such Securities, together with the coupons, if any, appertaining thereto,
have been complied with and that such Securities and coupons, 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

                                       18
<PAGE>   25

with their terms, subject to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles,

          (c) that all laws and requirements in respect of the execution and
delivery by the Company of such Securities and coupons, if any, have been
complied with; and

          (d) as to such other matters as the Trustee may reasonably request.

     The Trustee shall not be required to authenticate such Securities if the
issue of such Securities pursuant to this Indenture will affect the Trustee's
own rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee or if
the Trustee being advised by counsel determines that such action may not
lawfully be taken.

     Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any temporary Bearer Security in global form shall be
dated as of the date specified as contemplated by Section 301.

     No Security or coupon appertaining thereto shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose, unless there
appears on such Security a certificate of authentication substantially in the
form provided for in Section 202 or 612 executed by or on behalf of the Trustee
by the manual signature of one of its authorized signers, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder. Except as
permitted by Section 306 or 307, the Trustee shall not authenticate and deliver
any Bearer Security unless all appurtenant coupons for interest then matured
have been detached and cancelled.

     SECTION 304. Temporary Securities.

     Pending the preparation of definitive Securities of any series, the Company
may execute and deliver to the Trustee, and upon Company Order the Trustee shall
authenticate and make available for delivery in the manner provided in Section
303, temporary Securities of such series which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities. In
the case of Bearer Securities of any series, such temporary Securities may be in
global form, representing all of the Outstanding Bearer Securities of such
series.

     Except in the case of temporary Securities in global form, 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 that
series to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series containing identical terms
and provisions upon surrender of the temporary Securities of such series at an
office or agency of the Company

                                       19
<PAGE>   26

maintained for such purpose pursuant to Section 1002, 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 make available for
delivery in exchange therefor a like principal amount of definitive Securities
of authorized denominations of the same series containing identical terms and
provisions; provided, however, that no definitive Bearer Security, except as
provided pursuant to Section 301, shall be delivered in exchange for a temporary
Registered Security; and provided, further, that a definitive Bearer Security
shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth therein. Unless otherwise specified as
contemplated by Section 301 with respect to a temporary global Security, 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.

     SECTION 305. Registration, Transfer and Exchange.

     With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept at an office or agency of the Company maintained
pursuant to Section 1002, a register (herein sometimes referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities of each series and of transfers of the Registered Securities of each
series. Such office or agency shall be the "Security Registrar" for the
Registered Securities, if any, of each series of Securities. In the event that
the Trustee shall not be the Security Registrar, it shall have the right to
examine the Security Register at all reasonable times.

     Upon surrender for registration of transfer of any Registered Security of
any series at any office or agency of the Company maintained for that series
pursuant to Section 1002, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, in the name of the designated
transferee or transferees, one or more new Registered Securities of the same
series, of any authorized denominations, of a like aggregate principal amount
bearing a number not contemporaneously outstanding and containing identical
terms and provisions.

     At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any such office or agency. Whenever any Registered Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, the Registered Securities which the holder making
the exchange is entitled to receive.

     At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series containing identical
terms and provisions, of any authorized denominations 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

                                       20
<PAGE>   27

by the Company and the Trustee if there is 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 1002,
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 a Bearer Security of any series
is surrendered at any such office or agency in exchange for a Registered
Security of the same series and like tenor 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.

     If expressly provided with respect to the Securities of any series, at the
option of the Holder, Registered Securities of such series may be exchanged for
Bearer Securities upon such terms and conditions as may be provided with respect
to such series.

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

     Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any global Security shall be exchangeable only if
(i) the Securities Depository is at any time unwilling or unable to continue as
Securities Depository and a successor depository is not appointed by the Company
within 60 days, (ii) the Company executes and delivers to the Trustee a Company
Order to the effect that such global Security shall be so exchangeable, or (iii)
an Event of Default has occurred and is continuing with respect to the
Securities. If the beneficial owners of interests in a global Security are
entitled to exchange such interests for Securities of such series and of like
tenor and principal amount of any authorized form and denomination, as specified
as contemplated by Section 301, then without unnecessary delay but in any event
not later than the earliest date on which such interests may be so exchanged,
the Company shall deliver to the Trustee definitive Securities of that series in
aggregate principal amount equal to the principal amount of such global
Security, executed by the Company. On or after the earliest date on which such
interests may be so exchanged, such global Securities shall be surrendered from
time to time by the U.S. Depository or such other depository as shall be
specified in the Company Order with respect thereto, and in accordance with
instructions given to the Trustee and the U.S. Depository or such depository, as
the case may be (which instructions shall be in writing but need not comply with
Section 102 or be accompanied by an Opinion of Counsel), as shall be specified
in the Company Order with respect thereto to the Trustee, as the Company's agent
for such purpose, to be exchanged, in whole or in part, for definitive
Securities of the same

                                       21
<PAGE>   28

series without charge. The Trustee shall authenticate and make available for
delivery, in exchange for each portion of such surrendered global Security, a
like aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such global
Security to be exchanged which (unless the Securities of the series are not
issuable both as Bearer Securities and as Registered Securities, in which case
the definitive Securities exchanged for the global Security shall be issuable
only in the form in which the Securities are issuable, as specified as
contemplated by Section 301) shall be in the form of Bearer Securities or
Registered Securities, or any combination thereof, as shall be specified by the
beneficial owner thereof; provided, however, that no such exchanges may occur
during a period beginning at the opening of business 15 days before any
selection of Securities of that series to be redeemed and ending on the relevant
Redemption Date; and provided, further, that (unless otherwise specified as
contemplated by Section 301) no Bearer Security delivered in exchange for a
portion of a global Security shall be mailed or otherwise delivered to any
location in the United States. Promptly following any such exchange in part,
such global Security shall be returned by the Trustee to such depository or the
U.S. Depository, as the case may be, or such other depository or U.S. Depository
referred to above in accordance with the instructions of the Company referred to
above. If a Registered Security is issued in exchange for any portion of a
global Security after the close of business at the office or agency where such
exchange occurs 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 proposed date for payment of interest or Defaulted
Interest, as the case may be, interest will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such global Security is payable in
accordance with the provisions of this Indenture.

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

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

     No service charge shall be made for any registration of transfer or
exchange, or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1206 not involving any transfer.

     The Company shall not be required (i) to issue, register the transfer of or
exchange any Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1203 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Registered Security so selected for redemption in
whole

                                       22
<PAGE>   29

or in part, except, in the case of any Security to be redeemed in part, the
portion thereof not to be redeemed, 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, provided that such Registered Security
shall be immediately surrendered for redemption with written instruction for
payment consistent with the provisions of this Indenture.

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

     If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and make available for delivery in exchange
therefor a new Security of the same series containing identical terms and of
like principal amount and bearing a number not contemporaneously outstanding,
with coupons corresponding to the coupons, if any, appertaining to the
surrendered Securities.

     If there be delivered to the Company and to the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or 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 upon its request the Trustee
shall authenticate and make available for delivery, 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 new Security of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.

     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, pay such Security or coupon; provided,
however, that payment of principal of (and premium, if any) and any interest on
Bearer Securities shall, except as otherwise provided in Section 1002, be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 301, 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 and its counsel) 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 coupons, 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 equally and
proportionately with any and all other Securities of that series and their
coupons, if any, duly issued hereunder.

                                       23
<PAGE>   30

     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 307. Payment of Interest; Interest Rights Preserved.

     Interest on any Registered Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall, if so provided in
such Security, 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. In case a Bearer Security of any series is
surrendered in exchange for a Registered Security of such series after the close
of business (at an office or agency in a Place of Payment for such series) on
any Regular Record Date and before the opening of business (at such office or
agency) on the next succeeding Interest Payment Date, such Bearer Security shall
be surrendered without the coupon relating to such Interest Payment Date and
interest will not be payable on such Interest Payment Date 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.

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

          (1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities affected (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each such Registered
Security and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of such Registered
Securities at his address as it appears in the Security Register not less than
10 days prior to such Special Record Date. The Trustee may in the name and at
the expense of the Company, cause a similar notice to be published at least once
in a newspaper, customarily published in the English language on each Business
Day and of general circulation in the Borough of Manhattan, The City of New
York, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record

                                       24
<PAGE>   31

Date therefor having been mailed as aforesaid, 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). In case a Bearer Security of any series is surrendered at
the office or agency in a Place of Payment for such series in exchange for a
Registered Security of such series after the close of business at such office or
agency on any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
proposed date of payment and Defaulted Interest will not be payable on such
proposed date of payment 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.

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

     At the option of the Company, interest on Registered Securities of any
series that bear interest may be paid by mailing a check to the address of the
person entitled thereto as such address shall appear in the Security Register.

     Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue interest, which were carried by such other
Security.

     SECTION 308. Persons Deemed Owners.

     Prior to due presentment of a 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 (and premium, if any), and (subject to Sections 305 and 307)
interest on and Additional Amounts with respect to, 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 Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such 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.

                                       25
<PAGE>   32

     SECTION 309. Cancellation.

     All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee, and any such Securities and coupons and Securities and coupons
surrendered directly to the Trustee for any such purpose shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities and coupons held by the Trustee shall be returned by the Trustee to
the Company.

     SECTION 310. Computation of Interest.

     Except as otherwise specified as contemplated by Section 301 for Securities
of any series, or as set forth in any supplemental indenture, interest on the
Securities of each series shall be computed on the basis of a 360 day year of
twelve 30-day months or, for any period shorter than a full three months, on the
basis of the actual number of days elapsed in such period.

     SECTION 311. Cusip Numbers.

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

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

     SECTION 401. Satisfaction and Discharge of Indenture.

     Upon the direction of the Company by a Company Order this Indenture shall
cease to be of further effect (except as to any surviving rights of registration
of transfer or exchange of Securities herein expressly provided for and any
right to receive Additional Amounts, as provided in Section 1004), and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when

          (1) either

               (A) all Securities theretofore authenticated and delivered and
all coupons appertaining thereto (other than (i) coupons appertaining to Bearer
Securities

                                       26
<PAGE>   33

surrendered for exchange for Registered Securities and maturing after such
exchange, whose surrender is not required or has been waived as provided in
Section 305, (ii) Securities and coupons which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 306, (iii)
coupons appertaining to Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as provided in Section
1206, and (iv) 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 from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or

               (B) all such Securities and, in the case of (i) or (ii) below,
any such 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 deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities and coupons not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) and interest,
and any Additional Amounts 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 has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.

     In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of all series as to which it is Trustee and if the other conditions
thereto are met. In the event there are two or more Trustees hereunder, then the
effectiveness of any such instrument shall be conditioned upon receipt of such
instrument from all Trustees hereunder.

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

                                       27
<PAGE>   34

     SECTION 402. Application of Trust Money.

     Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities, 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 (and premium, if
any) and any interest and Additional Amounts for whose payment such money has
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law. Money and securities held in
trust are not subject to Article Eleven.

                                  ARTICLE FIVE

                                    REMEDIES

     SECTION 501. Events of Default.

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

          (1) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of that series when such interest or
Additional Amounts becomes due and payable, and continuance of such default for
a period of 30 days; provided, however, that a valid extension of an interest
payment period by the Company in accordance with the terms of the Securities of
such series shall not constitute a default in the payment of interest for this
purpose; or

          (2) default in the payment of the principal of (and premium, if any,
on) any Security of that series when it becomes due and payable at Maturity; or

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

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

          (5) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator,

                                       28
<PAGE>   35

assignee, custodian, trustee, sequestrator (or similar official) of the Company
or for any substantial part of its property, or ordering the winding-up or
liquidation of its affairs, and such decree or order shall remain unstayed and
in effect for a period of 60 consecutive days; or

          (6) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of the Company or for any substantial part of its property, or shall
make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due or shall take any corporate action
in furtherance of any of the foregoing; or

          (7) a default occurs under any bond, mortgage, indenture (including
this Indenture) or instrument under which there may be issued, or by which there
may be secured or evidenced, any indebtedness for money borrowed of the Company
or any Subsidiary, whether such indebtedness now exists or shall hereafter be
created, which default (a) is caused by a failure to pay principal on such
indebtedness prior to the expiration of the grace period provided in such
indebtedness (a "Payment Default") or (b) results in the acceleration of such
indebtedness prior to its express maturity, and in each case, the principal
amount of any such indebtedness together with the principal amount of any other
such indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $25 million or more, without such
acceleration having been rescinded, stayed or annulled, or such indebtedness
having been discharged or, in the case of indebtedness contested in good faith
by the Company, a bond, letter of credit, escrow deposit or other cash
equivalent in an amount sufficient to discharge such indebtedness having been
set aside by the Company, within a period of 10 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 a written notice specifying such default and requiring
the Company to cause such acceleration to be rescinded or annulled or to cause
such indebtedness to be discharged and stating that such notice is a "Notice of
Default" hereunder; or

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

     SECTION 502. Acceleration of Maturity; Rescission and Annulment.

     If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal of all the Securities of
that series, or such lesser amount as may be provided for in the Securities of
that series, to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal or such lesser amount shall become immediately due
and payable.

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

                                       29
<PAGE>   36

principal amount of the Outstanding Securities of that series, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if

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

               (A) all overdue installments of interest on and any Additional
Amounts payable in respect of all Securities of that series,

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

               (C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and Additional Amounts at the
rate or rates borne by or provided for in such Securities, and

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

     and

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

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

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

     The Company covenants that if

          (1) default is made in the payment of any installment of interest on
or any Additional Amounts payable in respect of any Security when such interest
or Additional Amounts shall have become due and payable and such default
continues for a period of 30 days, or

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

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and coupons, the whole amount then due and payable on
such Securities and coupons for principal (and premium, if any) and interest and
Additional Amounts, if any, with interest upon the overdue principal (and
premium, if any) and, to the extent that payment of such interest shall be
legally enforceable, upon overdue installments of interest or any Additional
Amounts, at the rate or rates borne by or provided for in such Securities, and,
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the

                                       30
<PAGE>   37

reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

     If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.

     If an Event of Default with respect to 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 and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.

     SECTION 504. Trustee May File Proofs of Claim.

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

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

          (ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;

and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each Holder of
Securities and coupons to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders of Securities and coupons, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 607.

     Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization,

                                       31
<PAGE>   38

arrangement, adjustment or composition affecting the Securities or coupons or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder of a Security or coupon in any such proceeding.

     SECTION 505. Trustee May Enforce Claims Without Possession of Securities or
Coupons.

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

     SECTION 506. Application of Money Collected.

     Any money collected by the Trustee pursuant to this Article shall be
applied, subject to Article Eleven, 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 (and premium, if any), interest or any Additional Amounts, upon
presentation of the Securities or coupons, or both, as the case may be, and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:

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

          SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, if any) and interest and any
Additional Amounts payable in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Securities and
coupons for principal (and premium, if any), interest and Additional Amounts,
respectively;

          THIRD: The balance, if any, to the Company.

     SECTION 507. Limitation on Suits.

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

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

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

                                       32
<PAGE>   39

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

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

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

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

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

     Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Sections 305 and 307) interest on and any Additional Amounts in respect of such
Security or payment of such coupon on the respective Stated Maturity or
Maturities expressed in such Security or coupon (or, in the case of redemption,
on the Redemption Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder.

     SECTION 509. Restoration of Rights and Remedies.

     If the Trustee or any Holder of a Security or coupon 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 the Company, the Trustee and the Holders of Securities and coupons shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.

     SECTION 510. Rights and Remedies Cumulative.

     Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities or coupons 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 of employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

                                       33
<PAGE>   40

     SECTION 511. Delay or Omission Not Waiver.

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

     SECTION 512. Control by Holders of Securities.

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

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

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

          (3) such direction is not unduly prejudicial to the rights of other
Holders of Securities of such series.

     SECTION 513. Waiver of Past Defaults.

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

          (1) in the payment of the principal of (and premium, if any) or
interest on or Additional Amounts payable in respect of any Security of such
series, or

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

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

     SECTION 514. Undertaking for Costs.

     All parties to this Indenture agree, and each Holder of any Security or
coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party

                                       34
<PAGE>   41

litigant in such suit, other than the Trustee, of an undertaking to pay the
costs of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in such suit, including the Trustee, having due regard to the merits
and good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted by the
Company, the Trustee or by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities of any
series, or to any suit instituted by any Holder of any Security or coupon for
the enforcement of the payment of the principal of (and premium, if any) or
interest on or any Additional Amounts in respect of any Security or the payment
of any coupon on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date) or
interest on any overdue principal of any Security.

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

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

                                  ARTICLE SIX

                                   THE TRUSTEE

     SECTION 601. Certain Duties and Responsibilities.

          (a) Except during the continuance of an Event of Default,

               (1) the Trustee undertakes to perform such duties, and only such
duties, as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Trustee
or any predecessor Trustee; and

               (2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions (whether in their
original or facsimile form) furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture
(but need not confirm or investigate the accuracy of any facts or mathematical
calculations stated therein).

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

                                       35
<PAGE>   42

          (c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that

               (1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;

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

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

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

          (d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.

     SECTION 602. Notice of Defaults.

     Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series entitled to receive reports pursuant to
Section 703(c), notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived, provided, however, that, except in
the case of a default in the payment of the principal of (and premium, if any)
or interest on, or any Additional Amounts with respect to, any Security of such
series or in the payment of any sinking fund installment with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interests of the
Holders of Securities and coupons of such series; and provided, further, that in
the case of any default of the character specified in Section 501(4) with
respect to Securities of such series, no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to Securities of
such series.

                                       36
<PAGE>   43

     SECTION 603. Certain Rights of Trustee.

     Except as otherwise provided in Section 601:

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

          (b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security to the Trustee for authentication and delivery pursuant
to Section 303 which shall be sufficiently evidenced as provided therein) and
any resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;

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

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

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

          (f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the sole cost of the
Issuer;

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

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

     The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and the

                                       37
<PAGE>   44

Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities or coupons. The Trustee or
any Authenticating Agent shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.

     SECTION 605. May Hold Securities.

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

     SECTION 606. Money Held in Trust.

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

     SECTION 607. Compensation and Reimbursement.

     The Company agrees

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

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

          (3) to indemnify each of the Trustee, any predecessor Trustee and
their respective agents for, and to hold them harmless against, any and all
loss, liability, claim, damage or expense (including taxes other than taxes
based on the income of the Trustee) incurred without negligence, bad faith or
intentional misconduct on their part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers or duties
hereunder.

     As security for the performance of the obligations of the Company under
this Section the Trustee shall have a lien prior to the Securities of any series
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of (or premium, if any) or
interest on Securities.

                                       38
<PAGE>   45

     SECTION 608. Corporate Trustee Required; Eligibility.

     There shall at all times be a Trustee hereunder that is a corporation (or
other person permitted to so act) by the Commission permitted by the Trust
Indenture Act to act as trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$50,000,000. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section or Section 310(a)(5) of the Trust Indenture
Act, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.

     SECTION 609. Resignation and Removal; Appointment of Successor.

          (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 610.

          (b) The Trustee may resign at any time with respect to the Securities
of one or more series giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 610 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may at the expense of the Company
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to such series.

          (c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 610 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of removal, the resigning Trustee may at the expense
of the Company petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect to such series.

          (d) If at any time:

               (1) the Trustee shall fail to comply with the obligations imposed
upon it under Section 310(b) of the Trust Indenture Act with respect to
Securities of any series 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

               (2) the Trustee shall cease to be eligible under Section 608 and
shall fail to resign after written request therefor by the Company or by any
such Holder of a Security, or

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

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities or the Securities of such series, or (ii)
subject to Section 315(e) of the

                                       39
<PAGE>   46

Trust Indenture Act, any Holder of a Security who has been a bona fide Holder of
a Security of any series 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 of such series and the
appointment of a successor Trustee or Trustees.

          (e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those 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 610. 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
610, 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 of Securities and accepted
appointment in the manner required by Section 610, any Holder of a Security who
has been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

          (f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issued as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

     SECTION 610. Acceptance of Appointment by Successor.

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

                                       40
<PAGE>   47

          (b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust, 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 that no Trustee shall be responsible for any notice
given to, or received by, or any act or failure to act on the part of any other
Trustee hereunder, 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, such retiring Trustee shall with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates have no further responsibility for the exercise
of rights and powers or for the performance of the duties and obligations vested
in the Trustee under this Indenture other than as hereinafter expressly set
forth, 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, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.

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

     SECTION 611. 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 of 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

                                       41
<PAGE>   48

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.

     SECTION 612. 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
or exchange, registration of transfer or partial redemption thereof or pursuant
to Section 306, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

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

     An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall (i) mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Registered Securities, if any, of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register, and (ii) if Securities of the series are issued as Bearer
Securities, publish notice of such appointment at least once in an Authorized
Newspaper in the place where such successor

                                       42
<PAGE>   49

Authenticating Agent has its principal office if such office is located outside
the United States. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.

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

     The provisions of Sections 308, 604 and 605 shall be applicable to each
Authenticating Agent.

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

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

                                                  THE BANK OF NEW YORK,
                                                       as Trustee

     Dated:                                       By:
           ---------------------                     ---------------------------
                                                       As Authenticating Agent

                                                  By:
                                                     ---------------------------
                                                       Authorized Signatory

     If all of the Securities of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not comply
with Section 102) by the Company, shall appoint in accordance with this Section
612 an Authenticating Agent having an office in a Place of Payment designated by
the Company with respect to such series of Securities.

                                 ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

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

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

                                       43
<PAGE>   50

          (a) semi-annually, not later than fifteen days after the Regular
Record Date for interest for each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities,
semi-annually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and

          (b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished, provided, however, that, so long as the Trustee is the Security
Registrar, no such list shall be required to be furnished.

     SECTION 702. Preservation of Information; Communications to Holders.

     The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.

     Every Holder of Securities or coupons, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company, the Trustee,
any Paying Agent or any Security Registrar shall be held accountable by reason
of the disclosure of any information as to the names and addresses of the
Holders of Securities in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 312(b) of the Trust Indenture Act.

     SECTION 703. Reports by Trustee.

          (a) Within 60 days after __________ of each year commencing with the
first __________ following the first issuance of Securities pursuant to Section
301, if required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report
dated as of such __________ with respect to any of the events specified in said
Section 313(a) which may have occurred since the later of the immediately
preceding __________ and the date of this Indenture.

          (b) The Trustee shall transmit the reports required by Section 313(b)
of the Trust Indenture Act at the times specified therein.

          (c) Reports pursuant to this Section shall be transmitted in the
manner and to the Persons required by Sections 313(c) and 313(d) of the Trust
Indenture Act. The Company will notify the Trustee when any series of Securities
are listed on any securities exchange.

     SECTION 704. Reports by Company.

     The Company shall:

          (1) 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

                                       44
<PAGE>   51

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; or, if the Company is not
required to file information, documents or reports pursuant to either of said
sections, then it shall file with 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 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 and shall file
a copy thereof with the Trustee within 30 days after such supplementary and
periodic information, documents and reports would have been required to be filed
with the Commission;

          (2) file with the Trustee and the Commission, in accordance with 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 of this Indenture as may be required from time
to time by such rules and regulations; and

          (3) transmit within 30 days after the filing thereof with the Trustee,
in the manner and to the extent provided in Section 703(c) with respect to
reports pursuant to Section 703(a), such summaries of any information, documents
and reports required to be filed by the Company pursuant to paragraphs (1) and
(2) of this Section as may be required by rules and regulations prescribed from
time to time by the Commission.

          (4) Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

                                 ARTICLE EIGHT

                CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

     SECTION 801. Consolidations and Mergers of Company and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions.

     The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other corporation,
provided that in any such case, (i) either the Company shall be the continuing
corporation, or the successor corporation shall be a corporation organized and
existing under the laws of the United States of America or a State thereof and
such successor corporation shall expressly assume the due and punctual payment
of the principal of (and premium, if any), any interest on, and any Additional
Amounts payable pursuant to Section 1004 with respect to, all the Securities,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by the
Company by supplemental indenture satisfactory to the Trustee, executed and
delivered to a Responsible Officer of the Trustee by such corporation, and (ii)
the Company or such successor corporation, as the case may be, shall not,
immediately after such merger or

                                       45
<PAGE>   52

consolidation, or such sale, lease or conveyance, be in default in the
performance of any such covenant or condition.

     SECTION 802. Rights and Duties of Successor Corporation.

     In case of any such consolidation, merger, sale, lease or conveyance and
upon any such assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part, and the
predecessor corporation, except in the event of a lease, shall be relieved of
any further obligation under this Indenture and the Securities and coupons. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Securities and
coupons issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee; and, upon the order of such successor
corporation, instead of the Company, and subject to all the terms, conditions
and limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities and coupons which previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Securities or coupons which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities and coupons so issued shall in all respects have the same legal rank
and benefit under this Indenture as the Securities and coupons theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities and coupons had been issued at the date of the execution
hereof.

     In case of any such consolidation, merger, sale, lease or conveyance, such
changes in phraseology and form (but not in substance) may be made in the
Securities and coupons thereafter to be issued as may be appropriate.

     SECTION 803. Officers' Certificate and Opinion of Counsel.

     The Trustee, subject to the provisions of Sections 601 and 603, may receive
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any such consolidation, merger, sale, lease or conveyance, and any such
assumption, complies with the provisions of this Article.

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

     SECTION 901. Supplemental Indentures without Consent of Holders.

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

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

                                       46
<PAGE>   53

          (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 to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal (or premium, if any) on
Registered Securities or of principal (or premium, if any) or any interest on
Bearer Securities, to permit Registered Securities to be exchanged for Bearer
Securities or to permit the issuance of Securities in uncertificated form,
provided any such action shall not adversely affect the interests of the Holders
of Securities of any series or any related coupons in any material respect; or

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

          (5) 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 610
(b); or

          (6) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions of this
Indenture which shall not adversely affect the interest of the Holders of
Securities of any series or any related coupons in any material respect; or

          (7) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth.

     SECTION 902. Supplemental Indentures with Consent of Holders.

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

          (1) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount thereof or the rate
of interest thereon or any Additional Amounts payable in respect thereof, or any
premium payable upon the redemption thereof, or change the obligation of the
Company to pay Additional Amounts pursuant to Section 1004 (except as
contemplated by Section 801(i) and permitted by Section

                                       47
<PAGE>   54

901(1)), or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502, or change any Place of Payment where,
or the coin or currency in which, any Security or any premium or 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), or

          (2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
reduce the requirements of Section 1504 for quorum or voting, or

          (3) modify the provisions of this Indenture with respect to the
subordination of any Security in a manner adverse to the Holder thereof; or

          (4) modify any of the provisions of this Section, or Section 513,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby.

     An amendment under this Section may not make any change that adversely
affects the rights under Article Eleven of any holder of an issue of Senior
Indebtedness unless the holders of the issue pursuant to its terms consent to
the change.

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

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

     SECTION 903. Execution of Supplemental Indentures.

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

     SECTION 904. Effect of Supplemental Indentures.

     Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this

                                       48
<PAGE>   55

Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder and of any coupons appertaining
thereto shall be bound thereby.

     SECTION 905. Conformity with Trust Indenture Act.

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

     SECTION 906. Reference in Securities to Supplemental Indentures.

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

                                  ARTICLE TEN

                                    COVENANTS

     SECTION 1001. 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 (and
premium, if any), interest on and any Additional Amounts payable in respect of
the Securities of that series in accordance with the terms of such series of
Securities, any coupons appertaining thereto and this Indenture. Any interest
due on and any Additional Amounts payable in respect of Bearer Securities on or
before Maturity, other than Additional Amounts, if any, payable as provided in
Section 1004 in respect of principal of (or premium, if any, on) such a
Security, shall be payable only upon presentation and surrender of the several
coupons for such interest installments as are evidenced thereby as they
severally mature.

     SECTION 1002. Maintenance of Office or Agency.

     The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment is
located outside the United States) 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, subject
to any laws or regulations applicable thereto, an office or agency in a Place of
Payment for such series which is located outside the United States where
Securities of such series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Securities of such series pursuant to Section 1004); provided, however, that if
the Securities of such series are listed on The Stock Exchange of the United
Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or any
other stock exchange located outside the

                                       49
<PAGE>   56

United States and such stock exchange shall so require, the Company will
maintain a Paying Agent in London, Luxembourg or any other required city located
outside the United States, as the case may be, so long as the Securities of such
series are listed on such exchange. The Company will give prompt written notice
to a Responsible Officer of the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, except that
Bearer Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Bearer Securities of that series pursuant to Section 1004) at the place
specified for the purpose pursuant to Section 301, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.

     Except as otherwise provided in the form of Bearer Security of any
particular series pursuant to the provisions of this Indenture, 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 or by check mailed to any address
in the United States or by transfer to an account maintained with a bank located
in the United States; provided, however, payment of principal of and any premium
and interest in U.S. dollars (including Additional Amounts payable in respect
thereof) on any Bearer Security may be made at the Corporate Trust Office of the
Trustee in the Borough of Manhattan, The City of New York if (but only if)
payment of the full amount of such principal, premium, interest or Additional
Amounts at all offices 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.

     The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency. Unless otherwise set forth in a Board Resolution or indenture
supplemental hereto with respect to a series of Securities, the Company hereby
designates as the Place of Payment for each series of Securities the Borough of
Manhattan, The City of New York, and initially appoints the Trustee at its
Corporate Trust Office as the Company's office or agency for each of such
purposes in such City.

     SECTION 1003. Money for Securities Payments to be Held in Trust.

     If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and 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 (and 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 of its
action or failure so to act.

     Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of (and
premium, if any), or

                                       50
<PAGE>   57

interest on, any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.

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

          (1) hold all sums held by it for the payment of the principal of (and
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 (and premium, if any) or interest on the Securities of that series;
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 of any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.

     Except as otherwise provided in the form of Securities of any particular
series pursuant to the provisions of this Indenture, any money deposited with
the Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of (and premium, if any) or interest on any Security of
any series and remaining unclaimed for two years after such principal (and
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 or any coupon appertaining
thereto 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 an Authorized Newspaper in
each Place of Payment or to be mailed to Holders of Registered Securities, or
both, 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
or mailing, any unclaimed balance of such money then remaining will be repaid to
the Company.

                                       51
<PAGE>   58

     SECTION 1004. Additional Amounts.

     If the Securities of a series provide for the payment of Additional
Amounts, the Company will pay to the Holder of any Security of any series or any
coupon appertaining thereto Additional Amounts as provided therein. Whenever in
this Indenture there is mentioned, in any context, the payment of the principal
of (or premium, if any) or interest on, or in respect of, any Security of any
series or any related coupon or the net proceeds received on the sale or
exchange of any Security of any series, such mention shall be deemed to include
mention of the payment of Additional Amounts provided for in this Section to the
extent that, in such context, Additional Amounts are, were or would be payable
in respect thereof pursuant to the provisions of this Section and express
mention of the payment of Additional Amounts (if applicable) in any provisions
hereof shall not be construed as excluding Additional Amounts in those
provisions hereof where such express mention is not made.

     If the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal (and
premium, if any) is made), and at least 10 days prior to each date of payment of
principal (and premium, if any) or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
the Company will furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal (and premium, if any) or interest on the Securities of that
series shall be made to Holders of Securities of that series or the related
coupons who are United States Aliens without withholding for or on account of
any tax, assessment or other governmental charge described in the Securities of
that Series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities or coupons and the Company will
pay to the Trustee or such Paying Agent the Additional Amounts required by this
Section. The Company covenants to indemnify the Trustee and any Paying Agent
for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence, bad faith or intentional misconduct on
their part arising out of or in connection with actions taken or omitted by any
of them in reliance on any Officers' Certificate furnished pursuant to this
Section.

     SECTION 1005. Statement as to Compliance.

     The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement, which need not comply with Section 102,
signed by the Chairman of the Board, the President or a Vice President and by
the Treasurer, an Assistant Treasurer, the Controller or an Assistant Controller
of the Company, stating, as to each signer thereof, that

     (a) a review of the activities of the Company during such year and of
performance under this Indenture has been made under his supervision, and

     (b) to the best of his knowledge, based on such review, (i) the Company has
fulfilled all of its obligations under this Indenture throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to him and the nature and status thereof, and
(ii) no event has occurred and is continuing which is, or after notice or

                                       52
<PAGE>   59

lapse of time or both would become, an Event of Default, or, if such an event
has occurred and is continuing, specifying each such event known to him and the
nature and status thereof.

     SECTION 1006. Waiver of Certain Covenants.

     The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 to 1005, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.

                                 ARTICLE ELEVEN

                                  SUBORDINATION

     SECTION 1101. Securities Subordinated to Senior Indebtedness.

     The Company and each Holder of a Security, by his acceptance thereof, agree
that (a) the payment of the principal of, premium (if any) and interest on and
any Additional Amounts with respect to each and all the Securities and (b) any
other payment in respect of the Securities, including on account of the
acquisition or redemption of Securities by the Company, is subordinated, to the
extent and in the manner provided in this Article, to the prior payment in full
of all Senior Indebtedness of the Company, whether outstanding at the date of
this Indenture or thereafter created, incurred, assumed or guaranteed, and that
these subordination provisions are for the benefit of the holders of Senior
Indebtedness.

     This Article shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.

     SECTION 1102. No Payment on Securities in Certain Circumstances.

     (a) No payment shall be made by or on behalf of the Company on account of
the principal of, premium (if any) or interest on or any Additional Amounts with
respect to the Securities of any series or to acquire any of such Securities
(including any repurchases of such Securities pursuant to the provisions thereof
at the option of the Holder of such Securities) for cash or property (other than
Junior securities of the Company), or on account of any redemption provisions of
such Securities, in the event of default in payment of any principal of, premium
(if any) or interest on any Senior Indebtedness of the Company when the same
becomes due and payable, whether at maturity or at a date fixed for prepayment
or by declaration of acceleration or otherwise (a "Senior Payment Default"),
unless and until such Senior Payment Default has been cured or waived or
otherwise has ceased to exist.

                                       53
<PAGE>   60

     (b) No payment shall be made by or on behalf of the Company on account of
the principal of, premium (if any) or interest on or any Additional Amounts with
respect to the Securities of any series or to acquire any of such Securities
(including any repurchases of such Securities pursuant to the provisions thereof
at the option of the Holder of such Securities) for cash or property (other than
Junior securities of the Company), or on account of the redemption provisions of
such Securities, in the event of any event of default (other than a Senior
Payment Default) with respect to any Designated Senior Indebtedness permitting
the holders of such Designated Senior Indebtedness (or a trustee or other
representative on behalf of the holders thereof) to declare such Designated
Senior Indebtedness due and payable prior to the date on which it would
otherwise have become due and payable, upon written notice thereof to the
Company and the Trustee by any holders of Designated Senior Indebtedness (or a
trustee or other representative on behalf of the holders thereof) (the "Payment
Notice"), unless and until such event of default shall have been cured or waived
or otherwise has ceased to exist; provided, that such payments may not be
prevented pursuant to this Section 1102(b) for more than 179 days after an
applicable Payment Notice has been received by the Trustee unless the Designated
Senior Indebtedness in respect of which such event of default exists has been
declared due and payable in its entirety, in which case no such payment may be
made until such acceleration has been rescinded or annulled or such Designated
Senior Indebtedness has been paid in full. No event of default that existed or
was continuing on the date of any Payment Notice (whether or not such event of
default is on the same issue of Designated Senior Indebtedness) may be made the
basis for the giving of a second Payment Notice, and only one such Payment
Notice may be given in any 365-day period.

     (c) In furtherance of the provisions of Section 1101, in the event that,
notwithstanding the foregoing provisions of this Section 1102, any payment or
distribution of assets of the Company (other than Junior securities of the
Company) shall be received by the Trustee or the Holders of Securities of any
series at a time when such payment or distribution was prohibited by the
provisions of this Section 1102, then, unless such payment or distribution is no
longer prohibited by this Section 1102, such payment or distribution (subject to
the provisions of Section 1107) shall be received and held in trust by the
Trustee or such Holder or Paying Agent for the benefit of the holders of Senior
Indebtedness of the Company, and shall be paid or delivered by the Trustee or
such Holders or such Paying Agent, as the case may be, to the holders of Senior
Indebtedness of the Company remaining unpaid or unprovided for or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
of the Company may have been issued, ratably, according to the aggregate amounts
remaining unpaid on account of such Senior Indebtedness of the Company held or
represented by each, for application to the payment of all Senior Indebtedness
in full after giving effect to all concurrent payments and distributions to or
for the holders of such Senior Indebtedness.

     SECTION 1103. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization.

     Upon any distribution of assets of the Company or upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or
similar proceeding or upon assignment for the benefit of creditors:

                                       54
<PAGE>   61

     (a) the holders of all Senior Indebtedness of the Company shall first be
entitled to receive payments in full before the Holders of Securities of any
series are entitled to receive any payment on account of the principal of,
premium (if any) or interest on or any Additional Amounts with respect to such
Securities (other than Junior securities of the Company);

     (b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than Junior securities
of the Company), to which the Holders of Securities of any series or the Trustee
on behalf of such Holders would be entitled, except for the provisions of this
Article, shall be paid by the liquidating trustee or agent or other Person
making such a payment or distribution directly to the holders of such Senior
Indebtedness or their representative, ratably according to the respective
amounts of Senior Indebtedness held or represented by each, to the extent
necessary to make payment in full of all such Senior Indebtedness remaining
unpaid after giving effect to all concurrent payments and distributions to the
holders of such Senior Indebtedness; and

     (c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than Junior securities of the Company), shall be
received by the Trustee or the Holders of Securities of any series or any Paying
Agent (or, if the Company or any Affiliate of the Company is acting as its own
Paying Agent, money for any such payment or distribution shall be segregated or
held in trust) on account of the principal of, premium (if any) or interest on
or any Additional Amounts with respect to the Securities of such series before
all Senior Indebtedness of the Company is paid in full, such payment or
distribution (subject to the provisions of Section 1107) shall be received and
held in trust by the Trustee or such Holder or Paying Agent for the benefit of
the holders of such Senior Indebtedness, or their respective representatives,
ratably according to the respective amounts of such Senior Indebtedness held or
represented by each, to the extent necessary to make payment as provided herein
of all such Senior Indebtedness remaining unpaid after giving effect to all
concurrent payments and distributions and all provisions therefor to or for the
holders of such Senior Indebtedness, but only to the extent that as to any
holder of such Senior Indebtedness, as promptly as practical following notice
from the Trustee to the holders of such Senior Indebtedness that such prohibited
payment has been received by the Trustee, Holder(s) or Paying Agent (or has been
segregated as provided above), such holder (or a representative therefor)
notifies the Trustee of the amounts then due and owing on such Senior
Indebtedness, if any, held by such holder and only the amounts specified in such
notices to the Trustee shall be paid to the holders of such Senior Indebtedness.

     SECTION 1104. Subrogation to Rights of Holders of Senior Indebtedness.

     Subject to the payment in full of all Senior Indebtedness of the Company as
provided herein, the Holders of the Securities shall be subrogated (to the
extent of the payments or distributions made to the holders of such Senior
Indebtedness pursuant to the provisions of this Article) to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Securities shall be paid in full. For the purpose of such
subrogation, no such payments or distributions to the holders of such Senior
Indebtedness by the Company, or by or on behalf of the Holders of the Securities
by virtue of this Article, which otherwise would have been made to such Holders
shall, as between the Company and such Holders, be deemed to be payment by the
Company or on account of such Senior Indebtedness, it being understood that the

                                       55
<PAGE>   62

provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of such Senior Indebtedness, on the other hand.

     If any payment or distribution to which the Holders of the Securities would
otherwise have been entitled but for the provisions of this Article shall have
been applied, pursuant to the provisions of this Article, to the payment of
amounts payable under Senior Indebtedness of the Company, then such Holders
shall be entitled to receive from the holders of such Senior Indebtedness any
payments or distributions received by such holders of Senior Indebtedness in
excess of the amount sufficient to pay all amounts payable under or in respect
of such Senior Indebtedness in full.

     SECTION 1105. Obligations of the Company Unconditional.

     Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as between the Company and the
Holders of the Securities of any series, the obligation of the Company, which is
absolute and unconditional, to pay to such Holders the principal of, premium (if
any) and interest on and any Additional Amounts with respect to the Securities
of such series as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of such
Holders and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article,
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy. Notwithstanding
anything to the contrary in this Article or elsewhere in this Indenture or in
the Securities, upon any distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Sections 601 and 603,
and the Holders of the Securities shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the liquidating trustee or agent or other Person making any
distribution to the Trustee or to such Holders for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article so long as such court has been
apprised of the provisions of, or the order, decree or certificate makes
reference to, the provisions of this Article.

     SECTION 1106. Trustee Entitled to Assume Payments Not Prohibited in Absence
of Notice.

     The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee unless and until a Responsible Officer of the Trustee or any Paying
Agent shall have received, no later than two Business Days prior to such
payment, written notice thereof from the Company or from one or more holders of
Senior Indebtedness or from any representative therefor and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 601 and 603, shall be entitled in all respects conclusively to assume
that no such fact exists.

                                       56
<PAGE>   63

     SECTION 1107. Application by Trustee of Amounts Deposited with It.

     Amounts deposited in trust with the Trustee pursuant to and in accordance
with Article Four shall be for the sole benefit of Holders of the Securities of
the series for the benefit of which such amounts were deposited, and, to the
extent allocated for the payment of Securities of such series, shall not be
subject to the subordination provisions of this Article. Otherwise, any deposit
of assets with the Trustee or the Paying Agent (whether or not in trust) for the
payment of principal of, premium (if any) or interest on or any Additional
Amounts with respect to any Securities shall be subject to the provisions of
Sections 1101, 1102, 1103 and 1104; provided that if prior to two Business Days
preceding the date on which by the terms of this Indenture any such assets may
become distributable for any purpose (including without limitation, the payment
of either principal of, premium (if any) or interest on or any Additional
Amounts with respect to any Security), the Trustee or such Paying Agent shall
not have received with respect to such assets the written notice provided for in
Section 1106, then the Trustee or such Paying Agent shall have full power and
authority to receive such assets and to apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it on or after such date; and provided further that nothing
contained in this Article shall prevent the Company from making, or the Trustee
from receiving or applying, any payment in connection with the redemption of
Securities if the first publication of notice of such redemption (whether by
mail or otherwise in accordance with this Indenture) has been made, and the
Trustee has received such payment from the Company, prior to the occurrence of
any of the contingencies specified in Section 1102 or 1103.

     SECTION 1108. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.

     No right of any present or future holders of any Senior Indebtedness to
enforce subordination provisions contained in this Article shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness may extend, renew,
modify or amend the terms of the Senior Indebtedness or any security therefor
and release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders of the Securities.

     SECTION 1109. Trustee to Effectuate Subordination of Securities.

     Each Holder of a Security by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article and to protect the rights of the Holders of the Securities pursuant
to this Indenture, and appoints the Trustee his attorney-in-fact for such
purpose, including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors of the Company),
the filing of a claim for the unpaid balance of his Securities in the form
required in said proceedings and cause said claim to be approved. If the Trustee
does not file a proper claim or proof of debt in the form required in such
proceeding prior to 30 days before the expiration of the time to file such claim
or claims,

                                       57
<PAGE>   64

then the holders of the Senior Indebtedness or their representative is hereby
authorized to have the right to file and is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Securities. Nothing
herein contained shall be deemed to authorize the Trustee or the holders of
Senior Indebtedness or their representative to authorize or consent to or accept
or adopt on behalf of any Holder of Securities any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of
any Holder thereof, or to authorize the Trustee or the holders of Senior
Indebtedness or their representative to vote in respect of the claim of any
Holder of the Securities in any such proceeding.

     SECTION 1110. Right of Trustee to Hold Senior Indebtedness.

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

     SECTION 1111. Article Eleven Not to Prevent Events of Default.

     The failure to make a payment on account of principal of or premium (if
any) or interest on the Securities by reason of any provision of this Article
shall not be construed as preventing the occurrence of a Default or an Event of
Default under Section 501 or in any way prevent the Holders of the Securities
from exercising any right hereunder other than the right to receive payment on
the Securities.

     SECTION 1112. No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness.

     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 (other than for
its willful misconduct or negligence) if it shall in good faith mistakenly pay
over or distribute to the Holders of the Securities or the Company or any other
Person, cash, property or securities to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article or otherwise. Nothing in this
Section 1112 shall affect the obligation of any other such Person to hold such
payment for the benefit of, and to pay such payment over to, the holders of
Senior Indebtedness or their representative.

     SECTION 1113. Article Applicable to Paying Agent.

     In case at any time any Payment Paying other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however,
that this Section 1113 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.

                                       58
<PAGE>   65

                                 ARTICLE TWELVE

                            REDEMPTION OF SECURITIES

     SECTION 1201. Applicability of Article.

     Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and this Article.

     SECTION 1202. Election to Redeem; Notice to Trustee.

     The election of the Company to redeem any Securities shall be evidenced by
a Company Order. In case of any redemption at the election of the Company of
less than all of the Securities of any series with the same issue date, interest
rate and Stated Maturity, 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 and of
the principal amount of Securities of such series to be redeemed.

     SECTION 1203. Selection by Trustee of Securities to be Redeemed.

     If less than all the Securities of any series with the same issue date,
interest rate and Stated Maturity are to be redeemed, the particular Securities
to be redeemed shall be selected not more than 60 days prior to the Redemption
Date by the Trustee, from the Outstanding Securities of such series not
previously called for redemption, by such method as the Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions of the principal amount of Registered Securities of such series;
provided, however, that no such partial redemption shall reduce the portion of
the principal amount of a Registered Security of such series not redeemed to
less than the minimum denomination for a Security of that series established
pursuant to Section 302.

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

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

     SECTION 1204. Notice of Redemption.

     Notice of redemption shall be given in the manner provided in Section 106,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Securities to be redeemed, to the Holders of
Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other Securities or portion thereof.

                                       59
<PAGE>   66

     Any notice that is mailed to the Holder of any Registered Securities in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not such Holder receives the notice.

     All notices of redemption shall include the Cusip Number, if any, and shall
state:

          (1) the Redemption Date,

          (2) the Redemption Price,

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

          (4) in case any Registered 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 of such Security
will receive, without charge, a new Registered Security or Registered Securities
of authorized denominations for the principal amount thereof remaining
unredeemed,

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

          (6) the place or places 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 of the Redemption Price,
and

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

     A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.

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

     SECTION 1205. Deposit of Redemption Price.

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

                                       60
<PAGE>   67

     SECTION 1206. 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 such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest (and
any Additional Amounts) 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 upon presentation and
surrender of coupons for such interest (at an office or agency located outside
the United States except as otherwise provided in Section 1002), and provided,
further, that 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 307.

     If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such 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 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
(and any Additional Amounts) represented by coupons shall be payable only upon
presentation and surrender of those coupons at an office or agency located
outside of the United States except as otherwise provided in Section 1002.

     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 1207. Securities Redeemed in Part.

     Any Registered Security which is to be redeemed only in part shall be
surrendered at any office or agency of the Company maintained for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Registered Security or Securities of the same series, containing identical
terms and provisions, of any authorized denomination as requested by such Holder
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered. If a Security in global
form is so surrendered, the Company shall execute, and the Trustee shall

                                       61
<PAGE>   68

authenticate and deliver to the U.S. Depository or other depository for such
Security in global form as shall be specified in the Company Order with respect
thereto to the Trustee, without service charge, a new Security in global form in
a denomination equal to and in exchange for the unredeemed portion of the
principal of the Security in global form so surrendered.

                                ARTICLE THIRTEEN

                                  SINKING FUNDS

     SECTION 1301. 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 permitted or
required by any form of Security of such series issued pursuant to this
Indenture.

     The minimum amount of any sinking fund payment provided for by the terms of
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 such series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1302. 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 1302. Satisfaction of Sinking Fund Payments with Securities.

     The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series to be made pursuant to the
terms of such Securities as provided for by the terms of such series, (1)
deliver Outstanding Securities of such series (other than any of such Securities
previously called for redemption or any of such Securities in respect of which
cash shall have been released to the Company), together in the case of any
Bearer Securities of such series with all unmatured coupons appertaining
thereto, and (2) apply as a credit Securities of such series which have been
redeemed either at the election of the Company pursuant to the terms of such
series of Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Securities, provided that such
series of 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.
If as a result of the delivery or credit of Securities of any series in lieu of
cash payments pursuant to this Section 1302, the principal amount of Securities
of such series to be redeemed in order to exhaust the aforesaid cash payment
shall be less than $100,000, the Trustee need not call Securities of such series
for redemption, except upon Company Request, and such cash payment shall be held
by the Trustee or a Paying Agent and applied to the next succeeding sinking fund
payment, provided, however, that the Trustee or such Paying Agent shall at the
request of the Company from time to time pay over and deliver to the Company any
cash payment so being held by the Trustee or such Paying Agent upon delivery by
the Company to the Trustee of Securities of that series purchased by the Company
having an unpaid principal amount equal to the cash payment requested to be
released to the Company.

                                       62
<PAGE>   69

     SECTION 1303. 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 mandatory 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 of
Securities of that series pursuant to Section 1302, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
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 1203 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 1204. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1206 and 1207.

                                ARTICLE FOURTEEN

                       REPAYMENT AT THE OPTION OF HOLDERS

     SECTION 1401. Applicability of Article.

     Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount of
Securities pursuant to such option of the Holder to require repayment of
Securities before their Stated Maturity, for purposes of Section 309, shall not
operate as a payment, redemption or satisfaction of the indebtedness represented
by such Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in this Article
Fourteen, in connection with any repayment of Securities, the Company may
arrange for the purchase of any Securities by an agreement with one or more
investment bankers or other purchasers to purchase such Securities by paying to
the Holders of such Securities on or before the close of business on the
repayment date an amount not less than the repayment price payable by the
Company on repayment of such Securities, and the obligation of the Company to
pay the repayment price of such Securities shall be satisfied and discharged to
the extent such payment is so paid by such purchasers.

                                ARTICLE FIFTEEN

                        MEETINGS OF HOLDERS OF SECURITIES

     SECTION 1501. Purposes for Which Meetings May Be Called.

     If Securities of a series are issuable as Bearer Securities, a meeting of
Holders of Securities of such series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or

                                       63
<PAGE>   70

other action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.

     SECTION 1502. Call, Notice and Place of Meetings.

          (a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501, to be held
at such time and at such place in the Borough of Manhattan, The City of New
York, or as the Trustee shall determine. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 106, not less than 21 nor more than 180
days prior to the date fixed for the meeting.

          (b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 25% in principal amount of the Outstanding Securities
of any series shall have requested the Trustee to call a meeting of the Holders
of Securities of such series for any purpose specified in Section 1501, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have the first publication of
the notice of such meeting within 21 days after receipt of such request or shall
not thereafter proceed to cause the meeting to be held as provided herein, then
the Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in London for such meeting and
may call such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.

     SECTION 1503. Persons Entitled to Vote at Meetings.

     To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.

     SECTION 1504. Quorum; Action.

     The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of a specified
percentage in aggregate principal amount of the Outstanding Securities of a
series that is less or greater than a majority in principal amount of the
Outstanding Securities of such series, then, with respect to such action (and
only such action) the Persons entitled to vote such lesser or greater percentage
in principal amount of the Outstanding Securities of such series shall
constitute a quorum. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting shall, if convened at the request of
Holders of Securities of such series, be dissolved. In any other case the
meeting may be adjourned for a period of not less than

                                       64
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10 days as determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1502(a), except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
Outstanding Securities of such series which shall constitute a quorum.

     Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of a series may be adopted at a meeting or
an adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of 66-2/3% in principal amount of
the Outstanding Securities of that series; and provided, further, that, except
as limited by the proviso to Section 902, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum is present
as aforesaid by the affirmative vote of the Holders of such specified percentage
in principal amount of the Outstanding Securities of that series.

     Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.

     SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings.

          (a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of such series in regard to proof of the
holding of Securities of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission and
examination or proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations may
provide that written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in Section 104 or
other proof.

                                       65
<PAGE>   72

          (b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.

          (c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of Securities of
such series held or represented by him; provided, however, that no vote shall be
cast or counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote, except as a Holder of a
Security of such series or proxy.

          (d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.

     SECTION 1506. Counting Votes and Recording Action of Meetings.

     The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

                                ARTICLE SIXTEEN

                            MISCELLANEOUS PROVISIONS

     SECTION 1601. Securities in Foreign Currencies.

     Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated

                                       66
<PAGE>   73

in the same currency, or (ii) any distribution to Holders of Securities, in the
absence of any provision to the contrary in the form of Security of any
particular series, any amount in respect of any Security denominated in a
currency other than United States dollars shall be treated for any such action
or distribution as that amount of United States dollars that could be obtained
for such amount on such reasonable basis of exchange and as of the record date
with respect to Registered Securities of such series (if any) for such action,
determination of rights or distribution (or, if there shall be no applicable
record date, such other date reasonably proximate to the date of such action,
determination of rights or distribution) as the Company may specify in a written
notice to the Trustee or, in the absence of such written notice, as the Trustee
may determine.

                                    * * * * *

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

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

                                                 VALERO ENERGY CORPORATION

                                                 By:
                                                    ----------------------------
                                                    Name: John D. Gibbons
                                                    Title: Vice President,
                                                           Finance and Treasurer
     Attest:

     -------------------------------
     Secretary

                                                 THE BANK OF NEW YORK,
                                                 as Trustee

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

                                       67

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