Document:

<PAGE>   1
                                                                     EXHIBIT 4.1

                        DUKE ENERGY FIELD SERVICES, LLC,

                                    as Issuer

                                       TO

                            THE CHASE MANHATTAN BANK,

                                   as Trustee

                                   ----------

                                    INDENTURE

                            Dated as of _______, 2000

                                   ----------

<PAGE>   2

                       CERTAIN SECTIONS OF THIS INDENTURE
                      RELATING TO SECTIONS 310 THROUGH 318,
                 INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:

<TABLE>
<CAPTION>
           TRUST INDENTURE
             ACT SECTION                                                                    INDENTURE SECTION
--------------------------------------                                               --------------------------------
<S>                                       <C>                                        <C>
                                          ...................................
Section 310(a)(1)                         ...................................        609
           (a)(2)                         ...................................        609
           (a)(3)                         ...................................        Not Applicable
           (a)(4)                         ...................................        Not Applicable
           (b)                            ...................................        608
                                          ...................................        610
Section 311(a)                            ...................................        613
           (b)                            ...................................        613
Section 312(a)                            ...................................        701
                                          ...................................        702
           (b)                            ...................................        702
           (c)                            ...................................        702
Section 313(a)                            ...................................        703
           (b)                            ...................................        703
           (c)                            ...................................        703
           (d)                            ...................................        703
Section 314(a)                            ...................................        704
           (a)(4)                         ...................................        101
                                          ...................................        1006
           (b)                            ...................................        Not Applicable
           (c)(1)                         ...................................        102
           (c)(2)                         ...................................        102
           (c)(3)                         ...................................        Not Applicable
           (d)                            ...................................        Not Applicable
           (e)                            ...................................        102
Section 315(a)                            ...................................        601
           (b)                            ...................................        602
           (c)                            ...................................        601
           (d)                            ...................................        601
           (e)                            ...................................        514
Section 316(a)                            ...................................        101
           (a)(1)(A)                      ...................................        502
           (a)(1)(B)                      ...................................        513
           (a)(2)                         ...................................        Not Applicable
           (b)                            ...................................        508
           (c)                            ...................................        104
Section 317(a)(1)                         ...................................        503
           (a)(2)                         ...................................        504
           (b)                            ...................................        1003
Section 318(a)                            ...................................        107
</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

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                                                                                                               PAGE
                                                                                                               ----
<S>               <C>                                                                                          <C>
                                                       ARTICLE ONE
                                             DEFINITIONS AND OTHER PROVISIONS
                                                  OF GENERAL APPLICATION

Section 101.      Definitions.....................................................................................1
Section 102.      Compliance Certificates and Opinions............................................................7
Section 103.      Form of Documents Delivered to Trustee..........................................................8
Section 104.      Acts of Holders; Record Dates...................................................................9
Section 105.      Notices, Etc., to Trustee and Corporation......................................................11
Section 106.      Notice to Holders; Waiver......................................................................11
Section 107.      Conflict with Trust Indenture Act..............................................................12
Section 108.      Effect of Headings and Table of Contents.......................................................12
Section 109.      Successors and Assigns.........................................................................12
Section 110.      Separability Clause............................................................................12
Section 111.      Benefits of Indenture..........................................................................12
Section 112.      Governing Law..................................................................................12
Section 113.      Legal Holidays.................................................................................13

                                                       ARTICLE TWO
                                                      SECURITY FORMS

Section 201.      Forms Generally................................................................................13
Section 202.      Form of Face of Security.......................................................................13
Section 203.      Form of Reverse of Security....................................................................15
Section 204.      Form of Legend for Global Securities...........................................................19
Section 205.      Form of Trustee's Certificate of Authentication................................................19

                                                       ARTICLE THREE
                                                       THE SECURITIES

Section 301.      Amount Unlimited; Issuable in Series...........................................................20
Section 302.      Denominations..................................................................................23
Section 303.      Execution, Authentication, Delivery and Dating.................................................23
Section 304.      Temporary Securities...........................................................................25
Section 305.      Registration, Registration of Transfer and Exchange............................................25
Section 306.      Mutilated, Destroyed, Lost and Stolen Securities...............................................27
Section 307.      Payment of Interest; Interest Rights Preserved.................................................28
Section 308.      Persons Deemed Owners..........................................................................29
Section 309.      Cancellation...................................................................................29
Section 310.      Computation of Interest........................................................................29
Section 311.      CUSIP Numbers..................................................................................29

                                                        ARTICLE FOUR
                                                 SATISFACTION AND DISCHARGE

Section 401.      Satisfaction and Discharge of Indenture........................................................30
Section 402.      Application of Trust Money.....................................................................31
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<TABLE>
<S>               <C>                                                                                          <C>
                                                      ARTICLE FIVE
                                                        REMEDIES

Section 501.      Events of Default..............................................................................31
Section 502.      Acceleration of Maturity; Rescission and Annulment.............................................33
Section 503.      Collection of Indebtedness and Suits for Enforcement by Trustee................................34
Section 504.      Trustee May File Proofs of Claim...............................................................34
Section 505.      Trustee May Enforce Claims Without Possession of Securities....................................35
Section 506.      Application of Money Collected.................................................................35
Section 507.      Limitation on Suits............................................................................35
Section 508.      Unconditional Right of Holders to Receive Principal, Premium and Interest......................36
Section 509.      Restoration of Rights and Remedies.............................................................36
Section 510.      Rights and Remedies Cumulative.................................................................37
Section 511.      Delay or Omission Not Waiver...................................................................37
Section 512.      Control By Holders.............................................................................37
Section 513.      Waiver of Past Defaults........................................................................37
Section 514.      Undertaking for Costs..........................................................................38
Section 515.      Waiver of Stay or Extension Laws...............................................................38

                                                      ARTICLE SIX
                                                      THE TRUSTEE

Section 601.      Certain Duties and Responsibilities............................................................38
Section 602.      Notice of Defaults.............................................................................39
Section 603.      Certain Rights of Trustee......................................................................39
Section 604.      Not Responsible for Recitals or Issuance of Securities.........................................40
Section 605.      May Hold Securities............................................................................40
Section 606.      Money Held in Trust............................................................................40
Section 607.      Compensation and Reimbursement.................................................................40
Section 608.      Conflicting Interests..........................................................................41
Section 609.      Corporate Trustee Required; Eligibility........................................................41
Section 610.      Resignation and Removal; Appointment of Successor..............................................42
Section 611.      Acceptance of Appointment by Successor.........................................................43
Section 612.      Merger, Conversion, Consolidation or Succession to Business....................................44
Section 613.      Preferential Collection of Claims Against Corporation..........................................44
Section 614.      Appointment of Authenticating Agent............................................................44

                                                      ARTICLE SEVEN
                                   HOLDERS' LISTS AND REPORTS BY TRUSTEE AND CORPORATION

Section 701.      Corporation to Furnish Trustee Names and Addresses of Holders..................................46
Section 702.      Preservation of Information; Communications to Holders.........................................46
Section 703.      Reports by Trustee.............................................................................47
Section 704.      Reports by Corporation.........................................................................47
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<TABLE>
<S>               <C>                                                                                         <C>
                                                      ARTICLE EIGHT
                                     CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

Section 801.      Corporation May Consolidate, Etc., on Certain Terms............................................47
Section 802.      Successor Substituted..........................................................................48

                                                      ARTICLE NINE
                                                SUPPLEMENTAL INDENTURES

Section 901.      Supplemental Indentures Without Consent of Holders.............................................48
Section 902.      Supplemental Indentures With Consent of Holders................................................49
Section 903.      Execution of Supplemental Indentures...........................................................50
Section 904.      Effect of Supplemental Indentures..............................................................50
Section 905.      Conformity with Trust Indenture Act............................................................51
Section 906.      Reference in Securities to Supplemental Indentures.............................................51

                                                      ARTICLE TEN
                                                       COVENANTS

Section 1001.     Payment of Principal, Premium and Interest.....................................................51
Section 1002.     Maintenance of Office or Agency................................................................51
Section 1003.     Money for Securities Payments to Be Held in Trust..............................................52
Section 1005.     Statement by Officers as to Default............................................................56
Section 1006.     Waiver of Certain Covenants....................................................................56
Section 1007.     Calculation of Original Issue Discount.........................................................57

                                                      ARTICLE ELEVEN
                                                 REDEMPTION OF SECURITIES

Section 1101.     Applicability of Article.......................................................................57
Section 1102.     Election to Redeem; Notice to Trustee..........................................................57
Section 1103.     Selection by Trustee of Securities to Be Redeemed..............................................58
Section 1104.     Notice of Redemption...........................................................................58
Section 1105.     Securities Payable on Redemption Date..........................................................59
Section 1106.     Securities Redeemed in Part....................................................................60

                                                      ARTICLE TWELVE
                                                      SINKING FUNDS

Section 1201.     Applicability of Article.......................................................................60
Section 1202.     Satisfaction of Sinking Fund Payments with Securities..........................................61
Section 1203.     Redemption of Securities for Sinking Fund......................................................61

                                                      ARTICLE THIRTEEN
                                           DEFEASANCE AND COVENANT DEFEASANCE

Section 1301.     Applicability of Article.......................................................................61
Section 1302.     Defeasance and Discharge.......................................................................61
Section 1303.     Covenant Defeasance............................................................................62
Section 1304.     Conditions to Defeasance or Covenant Defeasance................................................62
Section 1305.     Deposited Money and Government Obligations to Be Held in Trust; Miscellaneous Provisions.......63
</TABLE>

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<S>               <C>                                                                                          <C>
                                                          ARTICLE FOURTEEN
                                  IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 1401.     Indenture and Securities Solely Corporate Obligations..........................................64
</TABLE>

                                      -iv-
<PAGE>   7

         INDENTURE, dated as of _______, 2000, between Duke Energy Field
Services, LLC, a limited liability company duly organized and existing under the
laws of the State of Delaware (herein called the "Company"), having its
principal office at 370 17th Street, Suite 900, Denver, Colorado 80202, and The
Chase Manhattan Bank, a New York banking corporation, as Trustee (herein called
the "Trustee").

                             RECITALS OF THE COMPANY

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

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

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

SECTION 101. DEFINITIONS.

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

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

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

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

                  (4) unless the context otherwise requires, any reference to an
         "Article" or a "Section" refers to an Article or a Section, as the case
         may be, of this Indenture; and

                                      -1-
<PAGE>   8

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

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

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

         "Attributable Debt" means the total net amount of rent (discounted at a
rate calculated in accordance with generally accepted accounting principles)
required to be paid during the remaining term of any lease that is the subject
of a Sale and Leaseback Transaction.

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

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

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

         "Business Day," when used with respect to any Place of Payment, means a
day other than (i) a Saturday or a Sunday, (ii) a day on which banking
institutions in that Place of Payment are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office of the Trustee is closed for business.

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

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

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

                                      -2-
<PAGE>   9

         "Consolidated Adjusted Net Assets" means the total amount of assets
after deducting (i) all current liabilities (excluding any which are by their
terms extendible or renewable at the option of the obligor to a time more than
12 months after the time as of which the amount is being computed) and (ii)
total prepaid expenses and deferred charges

         "Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 450 West 33rd
Street, New York, New York 10001.

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

         "Covenant Defeasance" has the meaning specified in Section 1303.

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

         "Defeasance" has the meaning specified in Section 1302.

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

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

         "Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.

         "Expiration Date" has the meaning specified in Section 104.

         "Global Security" means a Security that evidences all or part of the
Securities of any series which is issued to a Depositary or a nominee thereof
for such series in accordance with Section 301(17).

         "Government Obligation" has the meaning specified in Section 1304.

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

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

                                      -3-
<PAGE>   10

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

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

         "Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.

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

         "Notice of Default" means a written notice of the kind specified in
Section 501(4).

         "Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee. One of the officers signing an Officers' Certificate
given pursuant to Section 1006 shall be the principal executive, financial or
accounting officer of the Company.

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

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

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

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

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

                  (3) Securities as to which Defeasance has been effected
         pursuant to Section 1302; and

                                      -4-
<PAGE>   11

                  (4) 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 the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and (D) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor, whether of record or beneficially,
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, waiver or other
action, only Securities which the Trustee actually knows to be so owned shall be
so disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.

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

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

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

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

                                      -5-
<PAGE>   12

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

         "Principal Property" means any natural gas pipeline, natural gas
gathering system, natural gas storage facility, natural gas processing plant or
other plant or facility located in the United States that in the opinion of the
Board of Directors or management of the Company is of material importance to the
business conducted by the Company and its consolidated Subsidiaries taken as
whole.

         "Principal Subsidiary" means any Subsidiary which owns a Principal
Property.

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

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

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

         "Responsible Officer," when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any senior trust officer, any trust officer or assistant
trust officer, the controller or any assistant controller 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.

         "Sale and Leaseback Transaction" of any Person means an arrangement
with any lender or investor or to which such lender or investor is a party
providing for the leasing by such Person for a term greater than three years of
any property or asset of such Person which has been or is being sold or
transferred by such Person more than 18 months after the acquisition thereof by
such Person or the completion of construction or commencement of operation
thereof by such Person to such lender or investor or to any Person to whom funds
have been or are to be advanced by such lender or investor on the security of
such property or asset. The stated maturity of such arrangement shall be the
date of the last payment of rent or any other amount due under such arrangement
prior to the first date on which such arrangement may be terminated by such
Person without payment of a penalty.

                                      -6-
<PAGE>   13

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

         "Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.

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

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

         "Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the date on which the principal of such Security or such
installment of principal or interest is due and payable, in the case of such
principal, as such date may be advanced or extended as provided pursuant to the
terms of such Security and this Indenture.

         "Subsidiary" means, as to any Person, an entity of which more than 50%
of the outstanding capital stock having ordinary voting power (other than
capital stock having such power only by reason of contingency) is at the time
owned, directly or indirectly through one or more intermediaries, or both, by
such Person.

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

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

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

SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.

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

                                      -7-
<PAGE>   14

or an Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

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

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

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

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

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

SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

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

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

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

         Whenever, subsequent to the receipt by the Trustee of any Board
Resolution, Officers' Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document

                                      -8-
<PAGE>   15

or instrument may be substituted therefor in corrected form with the same force
and effect as if originally filed in the corrected form and, irrespective of the
date or dates of the actual execution and/or delivery thereof, such substitute
document or instrument shall be deemed to have been executed and/or delivered as
of the date or dates required with respect to the document or instrument for
which it is substituted. Anything in this Indenture to the contrary
notwithstanding, if any such corrective document or instrument indicates that
action has been taken by or at the request of the Company which could not have
been taken had the original document or instrument not contained such error or
omission, the action so taken shall not be invalidated or otherwise rendered
ineffective but shall be and remain in full force and effect, except to the
extent that such action was a result of willful misconduct or bad faith. Without
limiting the generality of the foregoing, any Securities issued under the
authority of such defective document or instrument shall nevertheless be the
valid obligations of the Company entitled to the benefits of this Indenture
equally and ratably with all other Outstanding Securities, except as aforesaid.

SECTION 104. ACTS OF HOLDERS; RECORD DATES.

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

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

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

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

                                      -9-
<PAGE>   16

         The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series; provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take or revoke the relevant action, whether or not such
Holders remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.

         The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction or to revoke
the same, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Trustee from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Company's expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be sent to the Company in
writing and to each Holder of Securities of the relevant series in the manner
set forth in Section 106.

         With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be

                                      -10-
<PAGE>   17

effective unless notice of the proposed new Expiration Date is given to the
other party hereto in writing, and to each Holder of Securities of the relevant
series in the manner set forth in Section 106, on or prior to the existing
Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the party hereto which set such record
date shall be deemed to have initially designated the 180th day after such
record date as the Expiration Date with respect thereto, subject to its right to
change the Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.

         Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.

SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.

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

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

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

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

SECTION 106. NOTICE TO HOLDERS; WAIVER.

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

                                      -11-
<PAGE>   18

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

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

SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.

         If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act which is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.

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

SECTION 109. SUCCESSORS AND ASSIGNS.

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

SECTION 110. SEPARABILITY CLAUSE.

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

SECTION 111. BENEFITS OF INDENTURE.

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

SECTION 112. GOVERNING LAW.

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

                                      -12-
<PAGE>   19

SECTION 113. LEGAL HOLIDAYS.

         In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity.

                                   ARTICLE TWO

                                 SECURITY FORMS

SECTION 201. FORMS GENERALLY.

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

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

SECTION 202. FORM OF FACE OF SECURITY.

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

                         DUKE ENERGY FIELD SERVICES, LLC

                                   ----------

No.                                                                 $
    ---------                                                         ----------
                                                                  CUSIP No.
                                                                            ----

                                      -13-
<PAGE>   20

         Duke Energy Field Services, LLC, a limited liability company duly
organized and existing under the laws of the State of Delaware (herein called
the "Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________________, or registered assigns, the principal sum of ________
Dollars on _________________________ [if the Security is to bear interest prior
to Maturity and interest payment periods are not extendable, insert -- , and to
pay interest thereon from __________ or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, [insert --
semi-annually, quarterly, monthly or other description of the relevant payment
period] on [________, ________,] and __________ in each year, commencing
_______________, at the rate of ____% per annum, until the principal hereof is
paid or made available for payment [if applicable, insert -- , provided that any
principal and premium, and any such installment of interest, which is overdue
shall bear interest at the rate of ___% per annum (to the extent that the
payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand]. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the [___________________]
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].

         [If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of ____% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand. Any such interest on overdue
principal or premium which is not paid on demand shall bear interest at the rate
of ____% per annum (to the extent that the payment of such interest on interest
shall be legally enforceable), from the date of such demand until the amount so
demanded is paid or made available for payment. Interest on any overdue interest
shall be payable on demand.]

         Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in _________________, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts [if applicable, insert

                                      -14-
<PAGE>   21

-- ; provided, however, that at the option of the Company payment of interest
may be made by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or by wire transfer at such
place and to such account at a banking institution in the United States as may
be designated in writing to the Trustee at least sixteen (16) days prior to the
date for payment by the Person entitled thereto].

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

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

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:                                 DUKE ENERGY FIELD SERVICES, LLC

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

Attest:

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

SECTION 203. FORM OF REVERSE OF SECURITY.

         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of __________, 2000 (herein called the
"Indenture," which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitation of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [if applicable,
insert -- , limited in aggregate principal amount to $__________].

         [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ____________ in any year commencing with the year _____ and ending with
the year _____ through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [if
applicable, insert -- on or after ___________, 20__], as a whole or in part, at

                                      -15-
<PAGE>   22

the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [if applicable, insert -- on
or before _________________, ___%, and if redeemed] during the 12-month period
beginning _________ of the years indicated,

<TABLE>
<CAPTION>
Year                    Redemption Price                      Year                    Redemption Price
-------------------     -------------------------------       ----------------        ------------------------------
<S>                     <C>                                   <C>                     <C>
</TABLE>

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

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

<TABLE>
<CAPTION>
                                           Redemption Price
                                                 for                                      Redemption Price for
                                          Redemption Through                           Redemption Otherwise Than
                                           Operation of the                                Through Operation
          Year                               Sinking Fund                                 of the Sinking Fund
-------------------------      -----------------------------------------           -----------------------------------
<S>                            <C>                                                 <C>
</TABLE>

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

         [If applicable, insert -- Notwithstanding the foregoing, the Company
may not, prior to _________, redeem any Securities of this series as
contemplated by [if applicable, insert -- Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation

                                      -16-
<PAGE>   23

by the application, directly or indirectly, of moneys borrowed having an
interest cost to the Company (calculated in accordance with generally accepted
financial practice) of less than ____% per annum.]

         [If applicable, insert -- The sinking fund for this series provides for
the redemption on __________ in each year beginning with the year _______ and
ending with the year ______ of [if applicable, insert -- not less than
$___________ ("mandatory sinking fund") and not more than] $____________
aggregate principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through [if
applicable, insert -- mandatory] sinking fund payments may be credited against
subsequent [if applicable, insert -- mandatory] sinking fund payments otherwise
required to be made [if applicable, insert -- , in the inverse order in which
they become due].]

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

         [If the Security is not subject to redemption, insert -- This Security
is not redeemable prior to Stated Maturity.]

         [If applicable, insert -- The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]

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

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

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of all series affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of a majority in principal amount of the Securities of all series
at the time Outstanding affected thereby (voting as one class). The

                                      -17-
<PAGE>   24

Indenture contains provisions permitting the Holders of not less than a majority
in principal amount of the Securities of all series at the time Outstanding with
respect to which a default under the Indenture shall have occurred and be
continuing (voting as one class), on behalf of the Holders of the Securities of
all such series, to waive, with certain exceptions, such past default with
respect to all such series and its consequences. The Indenture also permits the
Holders of not less than a majority in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all Securities
of such series, to waive compliance by the Company with certain provisions of
the Indenture. Any such consent or waiver by the Holder of this Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange therefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than a majority in principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction
inconsistent with such request, and shall have failed to institute any such
proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.

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

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

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

                                      -18-
<PAGE>   25

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

         Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

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

SECTION 204. FORM OF LEGEND FOR GLOBAL SECURITIES.

         Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

SECTION 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.

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

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

                                       THE CHASE MANHATTAN BANK,
                                       As Trustee

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

                                      -19-
<PAGE>   26

                                  ARTICLE THREE

                                 THE SECURITIES

SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.

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

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

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

                  (2) any limit upon the aggregate principal amount of the
         Securities of the series which may be authenticated and delivered 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 1106
         and except for any Securities which, pursuant to Section 303, are
         deemed never to have been authenticated and delivered hereunder);

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

                  (4) the date or dates on which the principal of any Securities
         of the series is payable or the method by which such date shall be
         determined and the right, if any, to shorten or extend the date on
         which the principal of any Securities of the series is payable and the
         conditions to any such change;

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

                  (6) the right, if any, to extend the interest payment periods
         and the terms of such extension or extensions;

                                      -20-
<PAGE>   27

                  (7) the place or places where the principal of and any premium
         and interest on any Securities of the series shall be payable and
         whether, if acceptable to the Trustee, any principal of such Securities
         shall be payable without presentation or surrender thereof;

                  (8) the period or periods within which, or the date or dates
         on which, the price or prices at which and the terms and conditions
         upon which any Securities of the series may be redeemed, in whole or in
         part, at the option of the Company and, if other than by a Board
         Resolution, the manner in which any election by the Company to redeem
         the Securities shall be evidenced;

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

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

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

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

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

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

                  (15) if the principal amount payable at the Stated Maturity of
         any Securities of the series will not be determinable as of any one or
         more dates prior to the Stated Maturity, the amount which shall be
         deemed to be the principal amount of such Securities as of any such
         date for any purpose thereunder or hereunder, including the principal

                                      -21-
<PAGE>   28

         amount thereof which shall be due and payable upon any Maturity other
         than the Stated Maturity or which shall be deemed to be Outstanding as
         of any date prior to the Stated Maturity (or, in any such case, the
         manner in which such amount deemed to be the principal amount shall be
         determined);

                  (16) if either or both of Sections 1302 and 1303 do not apply
         to any Securities of the series;

                  (17) if applicable, that any Securities of the series shall be
         issuable in whole or in part in the form of one or more Global
         Securities and, in such case, the respective Depositary or Depositaries
         for such Global Securities, the form of any legend or legends which
         shall be borne by any such Global Security in addition to or in lieu of
         that set forth in Section 204 and any circumstances in addition to or
         in lieu of those set forth in Clause (2) of the last paragraph of
         Section 305 in which any such Global Security may be exchanged in whole
         or in part for Securities registered, and any transfer of such Global
         Security in whole or in part may be registered, in the name or names of
         Persons other than the Depositary for such Global Security or a nominee
         thereof;

                  (18) any addition, modification or deletion of any Events of
         Default or covenants provided with respect to any Securities of the
         series and any change in the right of the Trustee or the requisite
         Holders of such Securities to declare the principal amount thereof due
         and payable pursuant to Section 502;

                  (19) any addition to or change in the covenants set forth in
         Article Ten which applies to Securities of the series; and

                  (20) any other terms of the series.

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

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

         With respect to Securities of a series offered in a Periodic Offering,
the Board Resolution (or action taken pursuant thereto), Officers' Certificate
or supplemental indenture referred to above may provide general terms or
parameters for Securities of such series and provide either that the specific
terms of particular Securities of such series shall be specified in a Company
Order or that such terms shall be determined by the Company in accordance with
other procedures specified in a Company Order as contemplated by the third
paragraph of Section 303.

                                      -22-
<PAGE>   29

         Notwithstanding Section 301(2) herein and unless otherwise expressly
provided with respect to a series of Securities, the aggregate principal amount
of a series of Securities may be increased and additional Securities of such
series may be issued up to the maximum aggregate principal amount authorized
with respect to such series as increased.

SECTION 302. DENOMINATIONS.

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

SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

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

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

         At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities, provided,
however, that in the case of Securities offered in a Periodic Offering, the
Trustee shall authenticate and deliver such Securities from time to time in
accordance with such other procedures (including, without limitation, the
receipt by the Trustee of oral or electronic instructions from the Company or
its duly authorized agents, promptly confirmed in writing) acceptable to the
Trustee as may be specified by or pursuant to a Company Order delivered to the
Trustee prior to the time of the first authentication of Securities of such
series. If the form or terms of the Securities of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,

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

                                      -23-
<PAGE>   30

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

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

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

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

         With respect to Securities of a series offered in a Periodic Offering,
the Trustee may rely, as to the authorization by the Company of any of such
Securities, the form and terms thereof and the legality, validity, binding
effect and enforceability thereof, upon the Opinion of Counsel and the other
documents delivered pursuant to Sections 201 and 301 and this Section, as
applicable, in connection with the first authentication of Securities of such
series.

         Each Security shall be dated the date of its authentication.

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

                                      -24-
<PAGE>   31

SECTION 304. TEMPORARY SECURITIES.

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

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

SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.

         The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office or in any other
office or agency of the Company in a Place of Payment being 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 Securities and of transfers of Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided.

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

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

                                      -25-
<PAGE>   32

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

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

         No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1106 not involving any transfer.

         If the Securities of any series (or of any series and specified tenor)
are to be redeemed, the Company shall not be required (A) to issue, register the
transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption and ending at the close of business on
the day of such mailing, or (B) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.

         The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:

                  (1) Each Global Security authenticated under this Indenture
         shall be registered in the name of the Depositary designated for such
         Global Security or a nominee thereof and delivered to such Depositary
         or a nominee thereof or custodian therefor, and each such Global
         Security shall constitute a single Security for all purposes of this
         Indenture.

                  (2) Notwithstanding any other provision in this Indenture, no
         Global Security may be exchanged in whole or in part for Securities
         registered, and no transfer of a Global Security in whole or in part
         may be registered, in the name of any Person other than the Depositary
         for such Global Security or a nominee thereof unless (A) such
         Depositary has notified the Company that it is unwilling or unable to
         continue as Depositary for such Global Security and a successor
         Depositary has not been appointed by the Company within 90 days of
         receipt by the Company of such notification, (B) if at any time the
         Depositary ceases to be a clearing agency registered under the Exchange
         Act at a time when the Depositary is required to be so registered to
         act as such Depositary and no successor Depositary shall have been
         appointed by the Company within 90 days after it became aware of such
         cessation, or (C) there shall exist such circumstances, if any, in
         addition to or in lieu of the foregoing as have been specified for this
         purpose as contemplated by Section 301. Notwithstanding the foregoing,
         the Company may at any time in its sole discretion determine that
         Securities issued in the form of a Global

                                      -26-
<PAGE>   33

         Security shall no longer be represented in whole or in part by such
         Global Security, and the Trustee, upon receipt of a Company Order
         therefor, shall authenticate and deliver definitive Securities in
         exchange in whole or in part for such Global Security.

                  (3) Subject to Clause (2) above, any exchange or transfer of a
         Global Security for other Securities may be made in whole or in part,
         and all Securities issued in exchange for or upon transfer of a Global
         Security or any portion thereof shall be registered in such names as
         the Depositary for such Global Security shall direct.

                  (4) Every Security authenticated and delivered upon
         registration of transfer of, or in exchange for or in lieu of, a Global
         Security or any portion thereof, whether pursuant to this Section,
         Section 304, 306, 906 or 1106 or otherwise, shall be authenticated and
         delivered in the form of, and shall be, a Global Security, unless such
         Security is registered in the name of a Person other than the
         Depositary for such Global Security or a nominee thereof.

SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.

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

         If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

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

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

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

                                      -27-
<PAGE>   34

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

SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

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

         Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, any interest on any Security of any series
which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease
to be payable to the Holder on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in Clause (1) or (2) below:

                  (1) The Company may elect to make payment of any Defaulted
         Interest to the Persons in whose names the Securities of such series
         (or their respective Predecessor Securities) are registered at the
         close of business on a Special Record Date for the payment of such
         Defaulted Interest, which shall be fixed in the following manner. The
         Company shall notify the Trustee in writing of the amount of Defaulted
         Interest proposed to be paid on each Security of such series and the
         date of the proposed payment, and at the same time the Company shall
         deposit with the Trustee an amount of money equal to the aggregate
         amount proposed to be paid in respect of such Defaulted Interest or
         shall make arrangements satisfactory to the Trustee for such deposit
         prior to the date of the proposed payment, such money when deposited to
         be held in trust for the benefit of the Persons entitled to such
         Defaulted Interest as in this Clause provided. Thereupon the Trustee
         shall fix a Special Record Date for the payment of such Defaulted
         Interest which shall be not more than 15 days and not less than 10 days
         prior to the date of the proposed payment and not less than 10 days
         after the receipt by the Trustee of the notice of the proposed payment.
         The Trustee shall promptly notify the Company of such Special Record
         Date and, in the name and at the expense of the Company, shall cause
         notice of the proposed payment of such Defaulted Interest and the
         Special Record Date therefor to be given to each Holder of Securities
         of such series in the manner set forth in Section 106, not less than 10
         days prior to such Special Record Date. Notice of the proposed payment
         of such Defaulted Interest and the Special Record Date therefor having
         been so mailed, such Defaulted Interest shall be paid to the Persons in
         whose names the Securities of such series (or their respective
         Predecessor Securities) are registered at the close of business on such
         Special Record Date and shall no longer be payable pursuant to the
         following Clause (2).

                  (2) The Company may make payment of any Defaulted Interest on
         the Securities of any series in any other lawful manner not
         inconsistent with the requirements

                                      -28-
<PAGE>   35

         of any securities exchange, if any, on which such Securities may be
         listed, and upon such notice as may be required by such exchange, if,
         after notice given by the Company to the Trustee of the proposed
         payment pursuant to this Clause, such manner of payment shall be deemed
         practicable by the Trustee.

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

SECTION 308. PERSONS DEEMED OWNERS.

         Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

SECTION 309. CANCELLATION.

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

SECTION 310. COMPUTATION OF INTEREST.

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

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

                                      -29-
<PAGE>   36

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.

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.

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

                  (1) either

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

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

                                    (i) have become due and payable, or

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

                                    (iii) are to be called for redemption within
                           one year under arrangements satisfactory to the
                           Trustee for the giving of notice of redemption by the
                           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 (I) money in an amount, (II)
                  Government Obligations (as defined in Section 1304) which
                  through the scheduled payment of principal and interest in
                  respect thereof in accordance with their terms will provide,
                  not later than the due date of any payment, money in an
                  amount, or (III) a combination thereof, sufficient, in the
                  case of (II) or (III), in the opinion of a nationally
                  recognized firm of independent

                                      -30-
<PAGE>   37

                  public accountants expressed in a written certification
                  thereof delivered to the Trustee, to pay and discharge, and
                  which shall be applied by the Trustee to pay and discharge,
                  the entire indebtedness on such Securities not theretofore
                  delivered to the Trustee for cancellation, for principal and
                  any premium and interest to the date of such deposit (in the
                  case of Securities which have become due and payable) or to
                  the Stated Maturity or Redemption Date, as the case may be;

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

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

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

SECTION 402. APPLICATION OF TRUST MONEY.

         Subject to 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 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 any premium and
interest for whose payment such money has been deposited with the Trustee.

                                  ARTICLE FIVE

                                    REMEDIES

SECTION 501. EVENTS OF DEFAULT.

         "Event of Default," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body),
unless it is inapplicable to a particular series or is specifically deleted or
modified in the Board Resolution (or action taken pursuant thereto), Officers'
Certificate or supplemental indenture under which such series of Securities is
issued or has been deleted or modified in an indenture supplemental hereto:

                  (1) default in the payment of any interest upon any Security
         of that series when it becomes due and payable, and continuance of such
         default for a period of 60

                                      -31-
<PAGE>   38

         days; provided, however, that if the Company is permitted by the terms
         of the Securities of such series to defer the payment in question, the
         date on which such payment is due and payable shall be the date on
         which the Company is required to make payment following such deferral,
         if such deferral has been elected pursuant to the terms of the
         Securities; or

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

                  (3) default in the making of any sinking fund payment, when
         and as due by the terms of a Security of that series, and continuance
         of such default for a period of 60 days; or

                  (4) default in the performance, or breach, of any covenant of
         the Company in this Indenture (other than a covenant a default in whose
         performance or whose breach is elsewhere in this Section specifically
         dealt with or which has expressly been included in this Indenture
         solely for the benefit of series of Securities other than that series),
         and continuance of such default or breach for a period of 90 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 33% 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, unless the Trustee, or the Trustee and the Holders of a
         principal amount of Securities of such series not less than the
         principal amount of Securities the Holders of which gave such notice,
         as the case may be, shall agree in writing to an extension of such
         period prior to its expiration; provided, however, that the Trustee, or
         the Trustee and the Holders of such principal amount of Securities of
         such series, as the case may be, shall be deemed to have agreed to an
         extension of such period if corrective action is initiated by the
         Company within such period and is being diligently pursued; or

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

                  (6) the commencement by the Company of a voluntary case or
         proceeding under any applicable federal or state bankruptcy,
         insolvency, reorganization or other similar law or of any other case or
         proceeding to be adjudicated a bankrupt or insolvent, or the consent by
         it to the entry of a decree or order for relief in respect of the
         Company in an involuntary case or proceeding under any applicable
         federal or state bankruptcy,

                                      -32-
<PAGE>   39

         insolvency, reorganization or other similar law or to the commencement
         of any bankruptcy or insolvency case or proceeding against it, or the
         filing by it of a petition or answer or consent seeking reorganization
         or relief under any applicable federal or state law, or the consent by
         it to the filing of such petition or to the appointment of or taking
         possession by a custodian, receiver, liquidator, assignee, trustee,
         sequestrator or other similar official of the Company or of any
         substantial part of its property, or the making by it of an assignment
         for the benefit of creditors, or the admission by it in writing of its
         inability to pay its debts generally as they become due, or the
         authorization of any such action by the Board of Directors; or

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

SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

         If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 33% in principal amount of the Outstanding
Securities of that series may declare the principal amount of all the Securities
of that series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable.

         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 Event of Default giving rise to such declaration of
acceleration shall, without further act, be deemed to have been waived, and such
declaration and its consequences shall, without further act, be deemed to have
been rescinded and annulled, if

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

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

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

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

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

                                      -33-
<PAGE>   40

         and

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

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

SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

         The Company covenants that if

                  (1) default is made in the payment of any interest on any
         Security when such interest becomes due and payable and such default
         continues for a period of 60 days, or

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

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

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

SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.

         In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the

                                      -34-
<PAGE>   41

Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 607.

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

SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.

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

SECTION 506. APPLICATION OF MONEY COLLECTED.

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

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

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

         THIRD: To the payment of the balance, if any, to the Company or any
other Person or Persons legally entitled thereto.

SECTION 507. LIMITATION ON SUITS.

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

                                      -35-
<PAGE>   42

                  (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 a majority 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;

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

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

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

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

SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
             INTEREST.

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

SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.

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

                                      -36-
<PAGE>   43

SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.

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

SECTION 511. DELAY OR OMISSION NOT WAIVER.

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

SECTION 512. CONTROL BY HOLDERS.

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

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

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

                  (3) subject to the provisions of Section 601, the Trustee
         shall have the right to decline to follow any such direction if the
         Trustee in good faith shall, by a Responsible Officer or Officers of
         the Trustee, determine that the proceeding so directed would involve
         the Trustee in personal liability.

SECTION 513. WAIVER OF PAST DEFAULTS.

         The Holders of not less than a majority in principal amount of the
Outstanding Securities of all series with respect to which any default under the
Indenture shall have occurred and be continuing (voting as one class) may, on
behalf of the Holders of all Securities of all such series, waive such past
default under the Indenture and its consequences, except a default

                                      -37-
<PAGE>   44

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

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

         Upon any such waiver, such default shall cease to exist and be deemed
not to have occurred, and any Event of Default arising therefrom shall be deemed
to have been cured and not to have occurred, 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.

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

SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.

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

                                   ARTICLE SIX

                                   THE TRUSTEE

SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.

         The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every

                                      -38-
<PAGE>   45

provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.

SECTION 602. NOTICE OF DEFAULTS.

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

SECTION 603. CERTAIN RIGHTS OF TRUSTEE.

         Subject to the provisions of Section 601:

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

                  (2) any request or direction of the Company mentioned herein
         shall be sufficiently evidenced by a Company Request or Company Order
         or as otherwise expressly provided herein, and any resolution of the
         Board of Directors shall be sufficiently evidenced by a Board
         Resolution;

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

                  (4) 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;

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

                  (6) 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,

                                      -39-
<PAGE>   46

         request, direction, consent, order, bond, debenture, note, other
         evidence of indebtedness or other paper or document, but the Trustee,
         in its discretion, may make such further inquiry or investigation into
         such facts or matters as it may see fit, and, if the Trustee shall
         determine to make such further inquiry or investigation, it shall be
         entitled, at reasonable times previously notified to the Company, to
         examine the relevant books, records and premises of the Company,
         personally or by agent or attorney; and

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

SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

         The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.

SECTION 605. MAY HOLD SECURITIES.

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

SECTION 606. MONEY HELD IN TRUST.

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

SECTION 607. COMPENSATION AND REIMBURSEMENT.

         The Company agrees

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

                  (2) except as otherwise expressly provided herein, to
         reimburse the Trustee upon its request for all reasonable expenses,
         disbursements and advances incurred or

                                      -40-
<PAGE>   47

         made by the Trustee in accordance with any provision of this Indenture
         (including the reasonable compensation and the expenses and
         disbursements of its agents and counsel), except any such expense,
         disbursement or advance as may be attributable to its negligence,
         willful misconduct or bad faith; and

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

         The Trustee shall have a lien prior to the Securities upon all property
and funds held by it hereunder for any amount owing it or any predecessor
Trustee pursuant to this Section 607, except with respect to funds held in trust
for the benefit of the Holders of particular Securities.

         Without limiting any rights available to the Trustee under applicable
law, when the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(5) or Section 501(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.

         The provisions of this Section shall survive the termination of this
Indenture.

SECTION 608. CONFLICTING INTERESTS.

         If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.

SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

         There shall at all times be a Trustee hereunder with respect to the
Securities of each series, which may be Trustee hereunder for Securities of one
or more other series. Each Trustee shall be a Person that is eligible pursuant
to the Trust Indenture Act to act as such and has a combined capital and surplus
of at least $50,000,000. If any such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of its supervising or
examining authority, then for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
with respect to the Securities of any series shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.

                                      -41-
<PAGE>   48

SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

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

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

         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 at any time:

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

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

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

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

         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 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a

                                      -42-
<PAGE>   49

successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

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

SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

         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.

         In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee

                                      -43-
<PAGE>   50

of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.

         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 the
first or second preceding paragraph, as the case may be.

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

SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided that
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. As soon as practicable thereafter, the successor
Trustee shall mail a notice of its succession to the Company and to the Holders
of the Securities. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.

SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

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

SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.

         The Trustee may appoint an Authenticating Agent or Agents acceptable to
the Company 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 exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall be

                                      -44-
<PAGE>   51

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 that 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. As soon as
practicable thereafter, the successor Authenticating Agent shall mail a notice
of its succession to the Trustee and the Company.

         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 give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. 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 Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.

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

                                      -45-
<PAGE>   52

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

                                       THE CHASE MANHATTAN BANK,
                                            As Trustee

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

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

                                  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

                  (1) 15 days after each Regular Record Date, a list, in such
         form as the Trustee may reasonably require, of the names and addresses
         of the Holders of Securities of each series as of such Regular Record
         Date, and

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

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

SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.

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

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

                                      -46-
<PAGE>   53

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

SECTION 703. REPORTS BY TRUSTEE.

         The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
60 days after each June 1 following the date of this Indenture, deliver to
Holders a brief report, dated as of such June 1, which complies with the
provisions of such Section 313(a).

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

SECTION 704. REPORTS BY COMPANY.

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

                                  ARTICLE EIGHT

                  CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.

         Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company with or into any other Person
or Persons (whether or not affiliated with the Company), or successive
consolidations or mergers in which the Company or its successor or successors
shall be a party or parties, or shall prevent any conveyance or transfer of the
properties and assets of the Company as an entirety or substantially as an
entirety to any other Person (whether or not affiliated with the Company)
lawfully entitled to acquire the same; provided, however, and the Company hereby
covenants and agrees, that upon any such consolidation, merger, conveyance or
transfer, (i) the due and punctual payment of the principal of and premium, if
any, and interest on all of 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, shall be expressly
assumed, by indenture supplemental hereto, in form reasonably satisfactory to
the Trustee, executed and delivered to the Trustee by the

                                      -47-
<PAGE>   54

Person (if other than the Company) formed by such consolidation, or into which
the Company shall have been merged, or by the Person which shall have acquired
such properties and assets, and (ii) the Company shall deliver to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance or transfer and, if a supplemental indenture
is required in connection with such transaction, such supplemental indenture
comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.

SECTION 802. SUCCESSOR SUBSTITUTED.

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

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.

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

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

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

                  (3) to add any additional Events of Default for the benefit of
         the Holders of all or any series of Securities (and if such additional
         Events of Default are to be for the benefit of less than all series of
         Securities, stating that such additional Events of Default are
         expressly being included solely for the benefit of such series); or

                                      -48-
<PAGE>   55

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

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

                  (6) to secure the Securities; or

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

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

                  (9) 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; provided that such
         action pursuant to this Clause (9) shall not adversely affect the
         interests of the Holders of Securities of any series in any material
         respect.

SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.

         With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of all series affected by such
supplemental indenture (voting as one class), 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 any
supplemental indenture, or modifying in any manner the rights of the Holders of
Securities 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 principal of or interest on, any Security, or reduce the
         principal amount thereof or the rate of interest thereon or any premium
         payable upon the redemption thereof, or reduce the amount of the
         principal of an Original Issue Discount Security or any other Security
         which would be due and payable upon a declaration of acceleration of
         the Maturity

                                      -49-
<PAGE>   56

         thereof pursuant to Section 502 or change the coin or currency in which
         any Security or any premium or interest thereon is payable, or impair
         the right to institute suit for the enforcement of any such payment on
         or after the Stated Maturity thereof (or, in the case of redemption, on
         or after the Redemption Date), or

                  (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

                  (3) modify any of the provisions of this Section, Section 513
         or Section 1007, except to increase any such percentage or to provide
         that certain other provisions of this Indenture cannot be modified or
         waived without the consent of the Holder of each Outstanding Security
         affected thereby; provided, however, that this clause shall not be
         deemed to require the consent of any Holder with respect to changes in
         the references to "the Trustee" and concomitant changes in this Section
         and Section 1007, or the deletion of this proviso, in accordance with
         the requirements of Sections 611 and 901(8). A supplemental indenture
         which changes or eliminates any covenant or other provision of this
         Indenture which has expressly been included solely for the benefit of
         one or more particular series of Securities, or which modifies the
         rights of the Holders of Securities of such series with respect to such
         covenant or other provision, shall be deemed not to affect the rights
         under this Indenture of the Holders of Securities of any other series.

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

SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.

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

SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.

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

                                      -50-
<PAGE>   57

SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.

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

SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

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

                                   ARTICLE TEN

                                    COVENANTS

SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

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

SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.

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

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

                                      -51-
<PAGE>   58

SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.

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

         Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act. The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.

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

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

                                      -52-
<PAGE>   59

SECTION 1004. LIMITATION ON LIENS.

         The Company will not, nor will it permit any Principal Subsidiary of
the Company to, while any of the Securities remain Outstanding, create, or
suffer to be created or to exist, any mortgage, lien, pledge, security interest
or other encumbrance of any kind upon any Principal Property of the Company or
any Principal Subsidiary of the Company or upon any shares of stock of any
Principal Subsidiary of the Company, whether such Principal Property is, or
shares of stock are, now owned or hereafter acquired, to secure any indebtedness
for borrowed money of the Company, unless it shall make effective provision
whereby the Securities then Outstanding shall be secured by such mortgage, lien,
pledge, security interest or other encumbrance equally and ratably with any and
all indebtedness for borrowed money thereby secured so long as any such
indebtedness shall be so secured; provided, however, that nothing in this
Section shall be construed to prevent the Company or any Principal Subsidiary of
the Company from creating, or from suffering to be created or to exist, any
mortgages, liens, pledges, security interests or other encumbrances, or any
agreements, with respect to:

                  (1) purchase money mortgages, or other purchase money liens,
         pledges, security interests or encumbrances of any kind upon property
         hereafter acquired by the Company or any Principal Subsidiary of the
         Company, or mortgages, liens, pledges, security interests or other
         encumbrances of any kind existing on any property or any shares of
         stock at the time of the acquisition thereof (including mortgages,
         liens, pledges, security interests or other encumbrances which exist on
         any property or any shares of stock of a Person which is consolidated
         with or merged with or into the Company or any Principal Subsidiary of
         the Company or which transfers or leases all or substantially all of
         its properties to the Company or any Principal Subsidiary of the
         Company), or conditional sales agreements or other title retention
         agreements and leases in the nature of title retention agreements with
         respect to any property hereafter acquired; provided, however, that no
         such mortgage, lien, pledge, security interest or other encumbrance
         shall extend to or cover any other property of the Company or such
         Principal Subsidiary of the Company;

                  (2) mortgages, liens, pledges, security interests or other
         encumbrances of any kind upon any property of the Company or any
         Principal Subsidiary of the Company or any shares of stock of any
         Principal Subsidiary of the Company existing as of the date of the
         initial issuance of the Securities or upon the property or any shares
         of stock of any corporation, which mortgages, liens, pledges, security
         interests or other encumbrances existed at the time such corporation
         became a Principal Subsidiary of the Company; liens for taxes or
         assessments or other governmental charges or levies; pledges to secure
         other governmental charges or levies; pledges or deposits to secure
         obligations under worker's compensation laws, unemployment insurance
         and other social security legislation, including liens relating to
         judgments thereunder which are not currently dischargeable; pledges or
         deposits to secure performance in connection with bids, tenders,
         contracts (other than contracts for the payment of money) or leases to
         which the Company or any Principal Subsidiary of the Company is a
         party; pledges or deposits to secure public or statutory obligations of
         the Company or any Principal Subsidiary of the Company;

                                      -53-
<PAGE>   60

         builders', materialmen's, mechanics', carriers', warehousemen's,
         workers', repairmen's, operators', landlords' or other like liens in
         the ordinary course of business, or deposits to obtain the release of
         such liens; pledges or deposits to secure surety, stay, appeal,
         indemnity, customs, performance or return-of-money bonds or pledges or
         deposits in lieu thereof; other pledges or deposits for similar
         purposes in the ordinary course of business; liens created by or
         resulting from any litigation or proceeding which at the time is being
         contested in good faith by appropriate proceedings; liens incurred in
         connection with repurchase, swap or other similar agreements
         (including, without limitation, commodity price, currency exchange and
         interest rate protection agreements); mortgages, liens, pledges,
         security interests or other encumbrances in connection with leases
         made, or existing on property acquired, in the ordinary course of
         business; mortgages, liens, pledges, security interests or other
         encumbrances on any property arising in connection with any defeasance,
         covenant defeasance or in-substance defeasance of indebtedness of the
         Company or any Principal Subsidiary of the Company, including the
         Securities; zoning restrictions, easements, licenses, rights-of-way,
         restrictions on the use of property or minor irregularities in title
         thereto, which do not, in the opinion of the Company, materially impair
         the use of such property in the operation of the business of the
         Company or the value of such property for the purpose of such business;

                  (3) mortgages, liens, pledges, security interests or other
         encumbrances in favor of the United States of America, any State, any
         foreign country or any department, agency or instrumentality or
         political subdivision of any such jurisdiction, to secure partial,
         progress, advance or other payments pursuant to any contract or statute
         or to secure any indebtedness incurred for the purpose of financing all
         or any part of the purchase price or the cost of constructing or
         improving the property subject to such mortgages, including, without
         limitation, mortgages to secure indebtedness of the pollution control
         or industrial revenue bond type;

                  (4) indebtedness which may be issued by the Company or any
         Principal Subsidiary of the Company in connection with a consolidation
         or merger of the Company or any Principal Subsidiary of the Company
         with or into any other Person (which may be an Affiliate of the Company
         or any Principal Subsidiary of the Company) in exchange for or
         otherwise in substitution for secured indebtedness of such Person
         ("Third Party Debt") which by its terms (i) is secured by a mortgage on
         all or a portion of the property of such Person, (ii) prohibits secured
         indebtedness from being incurred by such Person, unless the Third Party
         Debt shall be secured equally and ratably with such secured
         indebtedness, or (iii) prohibits secured indebtedness from being
         incurred by such Person;

                  (5) indebtedness of any Person which is required to be assumed
         by the Company or any Principal Subsidiary of the Company in connection
         with a consolidation or merger of such Person, with respect to which
         any property of the Company or any Principal Subsidiary of the Company
         is subjected to a mortgage, lien, pledge, security interest or other
         encumbrance;

                  (6) mortgages, liens, pledges, security interests or other
         encumbrances on property held or used by the Company or any Principal
         Subsidiary of the Company in

                                      -54-
<PAGE>   61

         connection with the gathering, processing, transportation or marketing
         of natural gas, oil or other minerals;

                  (7) mortgages, liens, pledges, security interests or other
         encumbrances of any kind upon any property acquired, constructed,
         developed or improved by the Company or any Principal Subsidiary of the
         Company (whether alone or in association with others) after the date of
         the Indenture which are created prior to, at the time of, or within 18
         months after such acquisition (or in the case of property constructed,
         developed or improved, after the completion of such construction,
         development or improvement and commencement of full commercial
         operation of such property, whichever is later) to secure or provide
         for the payment of any part of the purchase price or cost thereof;
         provided that in the case of such construction, development or
         improvement the mortgages, liens, pledges, security interests or other
         encumbrances shall not apply to any property theretofore owned by the
         Company or any Principal Subsidiary of the Company other than
         theretofore unimproved real property;

                  (8) mortgages, liens, pledges, security interests or other
         encumbrances in favor of the Company, one or more Principal
         Subsidiaries of the Company, one or more wholly-owned Subsidiaries of
         the Company or any of the foregoing in combination;

                  (9) the replacement, extension or renewal (or successive
         replacements, extensions or renewals), as a whole or in part, of any
         mortgage, lien, pledge, security interest or other encumbrance, or of
         any agreement, referred to above in clauses (1) through (8) inclusive,
         or the replacement, extension or renewal (not exceeding the principal
         amount of indebtedness secured thereby together with any premium,
         interest, fee or expense payable in connection with any such
         replacement, extension or renewal) of the indebtedness secured thereby;
         provided that such replacement, extension or renewal is limited to all
         or a part of the same property that secured the mortgage, lien, pledge,
         security interest or other encumbrance replaced, extended or renewed
         (plus improvements thereon or additions or accessions thereto); or

                  (10) any other mortgage, lien, pledge, security interest or
         other encumbrance not excepted by the foregoing clauses (1) through
         (9); provided that immediately after the creation or assumption of such
         mortgage, lien, pledge, security interest or other encumbrance, the
         aggregate principal amount of indebtedness for borrowed money of the
         Company secured by all mortgages, liens, pledges, security interests
         and other encumbrances created or assumed under the provisions of this
         clause (10) shall not exceed an amount equal to 10% of the Consolidated
         Adjusted Net Assets of the Company, as shown on its consolidated
         balance sheet for the accounting period occurring immediately prior to
         the creation or assumption of such mortgage, lien, pledge, security
         interest or other encumbrance.

As used in this Section 1004, the term "shares of stock" means any and all
shares of corporate stock as well as interests, participations or other equity
equivalents in any Principal Subsidiary.

                                      -55-
<PAGE>   62

SECTION 1005.  LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.

         The Company shall not, and shall not permit any Principal Subsidiary
to, enter into any Sale and Leaseback Transaction unless:

                  (1) the Company or such Principal Subsidiary would be entitled
         to incur indebtedness, in a principal amount equal to the Attributable
         Debt with respect to such Sale and Leaseback Transaction, secured by a
         mortgage, lien, pledge, security interest or other encumbrance on the
         property subject to such Sale and Leaseback Transaction without equally
         and ratably securing the Securities pursuant to Section 1004;

                  (2) after the date of initial issuance of the Securities and
         within a period commencing 12 months prior to the consummation of such
         Sale and Leaseback Transaction and ending 12 months after the
         consummation thereof, the Company or such Principal Subsidiary shall
         have expended for any property used or to be used in the business of
         the Company and its Principal Subsidiaries an amount equal to all or a
         portion of the net proceeds from such Sale and Leaseback Transaction
         and the Company shall have elected to designate such amount as a credit
         against such Sale and Leaseback Transaction (with any such amount not
         being so designated to be applied as set forth in clause (3) below);

                  (3) the Company, during the 12-month period after the
         effective date of such Sale and Leaseback Transaction, shall have
         applied to the voluntary defeasance or retirement of Securities or any
         other indebtedness an amount equal to the greater of the net proceeds
         of the sale or transfer of the property leased in such Sale and
         Leaseback Transaction and the fair value, as determined by the Board of
         Directors of the Company, of such property at the time of entering into
         such Sale and Leaseback Transaction (in either case adjusted to reflect
         the remaining term of the lease and any amount expended by the Company
         as set forth in clause (2) above), less an amount equal to the
         principal amount of Securities and other indebtedness voluntarily
         defeased or retired by the Company within such 12-month period and not
         designated as a credit against any other Sale and Leaseback Transaction
         entered into by the Company or any Principal Subsidiary of the Company
         during such period; or

                  (4) such Sale and Leaseback Transaction is with an Affiliate
         of the Company.

SECTION 1006. STATEMENT BY OFFICERS AS TO DEFAULT.

         The Company will deliver to the Trustee, on or before June 1 of each
calendar year or on or before such other day in each calendar year as the
Company and the Trustee may from time to time agree upon, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

                                      -56-
<PAGE>   63

SECTION 1007. WAIVER OF CERTAIN COVENANTS.

         Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(19),
901(2) or 901(7) for the benefit of the Holders of such series or in Section
1004 or 1005 if before the time for such compliance the Holders of not less than
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.

SECTION 1008. CALCULATION OF ORIGINAL ISSUE DISCOUNT.

         The Company shall file with the Trustee promptly after the end of each
calendar year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on Outstanding Securities as
of the end of such year.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

SECTION 1101. APPLICABILITY OF ARTICLE.

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

SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.

         The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution or in another manner specified as contemplated by Section
301 for such Securities. In case of any redemption at the election of the
Company, the Company shall, at least 45 days prior to the Redemption Date fixed
by the Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities (a) prior
to the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, or (b) pursuant to an election
of the Company which is subject to a condition specified in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officers' Certificate evidencing compliance with such restriction or
condition.

                                      -57-
<PAGE>   64

SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

         If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), 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 a portion of the principal amount of any Security of such series;
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.

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

         The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

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

SECTION 1104. NOTICE OF REDEMPTION.

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

         All notices of redemption shall state:

                  (1) the Redemption Date;

                  (2) the Redemption Price or, if not then ascertainable, the
         manner of calculation thereof;

                  (3) if less than all the Outstanding Securities of any series
         and of a specified tenor consisting of more than a single Security are
         to be redeemed, the identification

                                      -58-
<PAGE>   65

         (and, in the case of partial redemption of any such Securities, the
         principal amounts) of the particular Securities to be redeemed and, if
         less than all the Outstanding Securities of any series and of a
         specified tenor consisting of a single Security are to be redeemed, the
         principal amount of the particular Security to be redeemed;

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

                  (5) the place or places where each such Security is to be
         surrendered for payment of the Redemption Price and accrued interest,
         if any, unless it shall have been specified as contemplated by Section
         301 with respect to such Securities that such surrender shall not be
         required;

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

                  (7) such other matters as the Company shall deem desirable or
         appropriate.

         Unless otherwise specified with respect to any Securities in accordance
with Section 301, with respect to any redemption of Securities at the election
of the Company, unless, upon the giving of notice of such redemption, Defeasance
shall have been effected with respect to such Securities pursuant to Section
1302, such notice may state that such redemption shall be conditional upon the
receipt by the Trustee or the Paying Agent(s) for such Securities, on or prior
to the date fixed for such redemption, of money sufficient to pay the principal
of and any premium and interest on such Securities and that if such money shall
not have been so received such notice shall be of no force or effect and the
Company shall not be required to redeem such Securities. In the event that such
notice of redemption contains such a condition and such money is not so
received, the redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the manner in which the notice of
redemption was given, that such money was not so received and such redemption
was not required to be made, and the Trustee or Paying Agent(s) for the
Securities otherwise to have been redeemed shall promptly return to the Holders
thereof any of such Securities which had been surrendered for payment upon such
redemption.

         Notice of redemption of Securities to be redeemed at the election of
the Company, and any notice of non-satisfaction of redemption as aforesaid,
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. Subject to the preceding paragraph,
any such notice of redemption shall be irrevocable.

SECTION 1105. SECURITIES PAYABLE ON REDEMPTION DATE.

         Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the
Securities or portions thereof 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, in the case of an unconditional notice of redemption,
the

                                      -59-
<PAGE>   66

Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities or portions thereof, if interest-bearing,
shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance with said notice, such Security or portion thereof shall be paid
by the Company at the Redemption Price, together with accrued interest, if any,
to the Redemption Date; provided, however, that no such surrender shall be a
condition to such payment if so specified as contemplated by Section 301 with
respect to such Security, and provided further that, unless otherwise specified
as contemplated by Section 301, installments of interest whose Stated Maturity
is on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.

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

SECTION 1106. SECURITIES REDEEMED IN PART.

         Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

                                 ARTICLE TWELVE

                                  SINKING FUNDS

SECTION 1201. APPLICABILITY OF ARTICLE.

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

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

                                      -60-
<PAGE>   67

SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.

         The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to any Securities of such series required to be made
pursuant to the terms of such Securities as and to the extent provided for by
the terms of such Securities; provided that the Securities to be so credited
have not been previously so credited. The Securities to be so credited shall be
received and credited for such purpose by the Trustee at the Redemption Price,
as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.

SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND.

         Not less than 45 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and stating the basis for such credit and that such Securities have
not been previously so credited and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days prior to each such sinking
fund payment date, the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1105 and 1106.

                                ARTICLE THIRTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1301. APPLICABILITY OF ARTICLE.

         Unless, pursuant to Section 301, provision is made that either or both
of (a) defeasance of any Securities or any series of Securities under Section
1302 and (b) covenant defeasance of any Securities or any series of Securities
under Section 1303 shall not apply to such Securities of a series, then the
provisions of either or both of Sections 1302 and Section 1303, as the case may
be, together with Sections 1304 and 1305, shall be applicable to the Outstanding
Securities of such series upon compliance with the conditions set forth below in
this Article.

SECTION 1302. DEFEASANCE AND DISCHARGE.

         The Company may cause itself to be discharged from its obligations with
respect to any Securities or any series of Securities on and after the date the
conditions set forth in Section 1304

                                      -61-
<PAGE>   68

are satisfied (hereinafter called "Defeasance"). For this purpose, such
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Securities and to have satisfied all
its other obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), subject to the following
which shall survive until otherwise terminated or discharged hereunder: (1) the
rights of Holders of such Securities to receive, solely from the trust fund
described in Section 1304 and as more fully set forth in such Section, payments
in respect of the principal of and any premium and interest on such Securities
when payments are due, (2) the Company's obligations with respect to such
Securities under Sections 304, 305, 306, 1002 and 1003 and with respect to the
Trustee under Section 607, (3) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and (4) this Article. Subject to compliance with this
Article, Defeasance with respect to any Securities or any series of Securities
by the Company is permitted under this Section 1302 notwithstanding the prior
exercise by the Company of its rights under Section 1303 with respect to such
Securities. Following a Defeasance, payment of such Securities may not be
accelerated because of an Event of Default.

SECTION 1303. COVENANT DEFEASANCE.

         The Company may cause itself to be released from its obligations under
Sections 1004 and 1005 and any covenants provided pursuant to Section 301(19),
901(2), 901(6) or 901(7) with respect to any Securities or any series of
Securities for the benefit of the Holders of such Securities and the occurrence
of any event specified in Sections 501(4) (with respect to Sections 1004 and
1005 and any such covenants provided pursuant to Section 301(19), 901(2), 901(6)
or 901(7)) or 501(7) shall be deemed not to be or result in an Event of Default
with respect to such Securities as provided in this Section, in each case on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that, with respect to such Securities, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section (to the extent so specified
in the case of Section 501(4)), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.

SECTION 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.

         The following shall be the conditions to the application of Section
1302 or Section 1303 to any Securities or any series of Securities, as the case
may be:

                  (1) The Company shall irrevocably have deposited or caused to
         be deposited with the Trustee as trust funds in trust for the purpose
         of making the following payments, specifically pledged as security for,
         and dedicated solely to, the benefit of the Holders of such Securities,
         (A) money in an amount, or (B) Government Obligations which through the
         scheduled payment of principal and interest in respect thereof in
         accordance with their terms will provide, not later than the due date
         of any payment, money in an amount, or (C) a combination thereof,
         sufficient, in the case of (B) or (C), in the opinion of a

                                      -62-
<PAGE>   69

         nationally recognized firm of independent public accountants expressed
         in a written certification thereof delivered to the Trustee, to pay and
         discharge, and which shall be applied by the Trustee to pay and
         discharge, the principal of and any premium and interest on such
         Securities on the respective Stated Maturities or on any Redemption
         Date established pursuant to Clause (3) below, in accordance with the
         terms of this Indenture and such Securities. As used herein,
         "Government Obligation" means (x) any security which is (i) a direct
         obligation of the United States of America or the government which
         issued the foreign currency in which such Securities are payable, for
         the payment of which its full faith and credit is pledged or (ii) an
         obligation of a Person controlled or supervised by and acting as an
         agency or instrumentality of the United States of America or such
         government which issued the foreign currency in which such Securities
         are payable, the payment of which is unconditionally guaranteed as a
         full faith and credit obligation by the United States of America or
         such other government, which, in either case (i) or (ii), is not
         callable or redeemable at the option of the issuer thereof, and (y) any
         depositary receipt issued by a bank (as defined in Section 3(a)(2) of
         the Securities Act) as custodian with respect to any Government
         Obligation which is specified in clause (x) above and held by such bank
         for the account of the holder of such depositary receipt, or with
         respect to any specific payment of principal of or interest on any
         Government Obligation which is so specified and held, provided that
         (except as required by law) such custodian is not authorized to make
         any deduction from the amount payable to the holder of such depositary
         receipt from any amount received by the custodian in respect of the
         Government Obligation or the specific payment of principal or interest
         evidenced by such depositary receipt.

                  (2) No event which is, or after notice or lapse of time or
         both would become, an Event of Default with respect to such Securities
         or any other Securities shall have occurred and be continuing at the
         time of such deposit or, with regard to any such event specified in
         Sections 501(5) and (6), at any time on or prior to the 90th day after
         the date of such deposit (it being understood that this condition shall
         not be deemed satisfied until after such 90th day).

                  (3) If the Securities are to be redeemed prior to Stated
         Maturity (other than from mandatory sinking fund payments or analogous
         payments), notice of such redemption shall have been duly given
         pursuant to this Indenture or provision therefor satisfactory to the
         Trustee shall have been made.

                  (4) The Company shall have delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that all
         conditions precedent with respect to such Defeasance or Covenant
         Defeasance have been complied with.

SECTION 1305. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST;
              MISCELLANEOUS PROVISIONS.

         Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee pursuant to Section 1304 in respect of any Securities shall be held
in trust and applied by the Trustee, in

                                      -63-
<PAGE>   70

accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law.

         The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1304 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of Outstanding Securities.

         Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations held by it as provided in Section 1304 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.

                                ARTICLE FOURTEEN

                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                            OFFICERS, DIRECTORS, ETC.

SECTION 1401. INDENTURE AND SECURITIES SOLELY COMPANY OBLIGATIONS.

         No recourse for the payment of the principal of or any premium or
interest on any Security, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any supplemental indenture, or in any
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer, director, member or
manager, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Securities.

         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.

                                      -64-
<PAGE>   71

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

                                       DUKE ENERGY FIELD SERVICES, LLC

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

                                       THE CHASE MANHATTAN BANK,
                                                      as Trustee

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

                                      -65-<PAGE>   1
                                                                    EXHIBIT 10.1

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

                            ASSET PURCHASE AGREEMENT

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

                THIS AGREEMENT MADE THE 24TH DAY OF MARCH, 2000,

                                     AMONG:

                               584022 ALBERTA LTD.

                                       AND

                               THE SHAREHOLDERS OF

                               584022 ALBERTA LTD.

                                       AND

                              PHELPS DRILLING LTD.

                                       AND

                                UTI ENERGY CORP.

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
<S>                                                                       <C>
ARTICLE 1             INTERPRETATION..........................................1
         1.1      Defined Terms...............................................1
         1.2      Currency....................................................5
         1.3      Sections and Headings.......................................5
         1.4      Number, Gender and Persons..................................5
         1.5      Accounting Principles.......................................5
         1.6      Entire Agreement............................................5
         1.7      Time of Essence.............................................5
         1.8      Applicable Law..............................................5
         1.9      Successors and Assigns......................................6
         1.10     Severability................................................6
         1.11     Amendments and Waivers......................................6
         1.12     Knowledge or Awareness......................................6
         1.13     Schedules...................................................7

ARTICLE 2             PURCHASE AND SALE OF PURCHASED ASSETS...................7
         2.1      Purchased Assets............................................7
         2.2      Excluded Assets.............................................9
         2.3      Merchantability............................................10

ARTICLE 3             PURCHASE PRICE.........................................10
         3.1      Purchase Price.............................................10
         3.2      Adjustments................................................10
         3.3      Allocation of Purchase Price...............................12
         3.4      GST........................................................12

ARTICLE 4             ASSUMPTION OF OBLIGATIONS..............................13
         4.1      Assumption of Obligations..................................13
         4.2      Exclusion of Liabilities...................................13

ARTICLE 5             REPRESENTATIONS AND WARRANTIES OF SELLER...............13
         5.1      Organization...............................................13
         5.2      Authorization..............................................14
         5.3      No Conflict................................................14
         5.4      No Other Agreements to Purchase............................14
         5.5      Sufficiency of Purchased Assets............................14
         5.6      Title to Purchased Assets..................................15
</TABLE>

<PAGE>   3

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
<S>                                                                       <C>
         5.7      Leased Real Property.......................................15
         5.8      Intellectual Property......................................15
         5.9      Insurance..................................................16
         5.10     Material Contracts.........................................16
         5.11     Compliance with Laws; Governmental Authorization...........17
         5.12     Consents and Approvals.....................................18
         5.13     Financial Statements.......................................18
         5.14     Books and Records..........................................18
         5.15     Absence of Changes.........................................18
         5.16     Non-Arm's Length Transactions..............................19
         5.17     Litigation.................................................20
         5.18     Residency..................................................20
         5.19     Environmental Matters......................................20
         5.20     Employee Matters...........................................20
         5.21     Customers and Suppliers....................................20
         5.22     Y2K Compliance.............................................21
         5.23     Full Disclosure............................................21
         5.24     Brokers....................................................21

ARTICLE 6             REPRESENTATIONS AND WARRANTIES OF PURCHASER............22
         6.1      Organization...............................................22
         6.2      Authorization..............................................22
         6.3      No Conflict................................................22
         6.4      Consents and Approvals.....................................22
         6.5      Investment Canada..........................................23
         6.6      Brokers....................................................23

ARTICLE 7             SURVIVAL OF REPRESENTATIONS AND WARRANTIES.............23
         7.1      Survival of Representations and Warranties.................23

ARTICLE 8             COVENANTS..............................................23
         8.1      Access to Purchased Business and Purchased Assets..........23
         8.2      Delivery of Books and Records..............................24
         8.3      Change of Name.............................................25
         8.4      Conduct of Purchased Business Prior to Closing.............25
         8.5      Third Party Consents and Novations.........................26
</TABLE>

<PAGE>   4

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
<S>                                                                       <C>
         8.6      Financial Statement Cooperation............................27
         8.7      Exclusivity................................................27
         8.8      Non-Competition............................................27

ARTICLE 9             CONDITIONS OF CLOSING..................................29
         9.1      Conditions of Closing in Favour of Purchaser...............29
         9.2      Conditions of Closing in Favour of Seller..................31

ARTICLE 10            CLOSING AND TRANSFER OF POSSESSION.....................32
         10.1     Place of Closing...........................................32
         10.2     Closing Deliveries by Seller...............................32
         10.3     Closing Deliveries by Purchaser............................33
         10.4     Further Assurances.........................................33
         10.5     Transfer of Possession and Title...........................33
         10.6     Risk of Loss...............................................33

ARTICLE 11            INDEMNIFICATION........................................34
         11.1     Indemnification by Seller and Shareholders.................34
         11.2     Indemnification by Purchaser and UTI.......................34
         11.3     Limitations on Indemnification.............................35
         11.4     Notice of Claim............................................35
         11.5     Direct Claims..............................................36
         11.6     Third Party Claims.........................................36
         11.7     Settlement of Third Party Claims...........................37
         11.8     Co-operation...............................................37
         11.9     Scope......................................................37

ARTICLE 12            TERMINATION; REMEDIES; LIMITATIONS.....................37
         12.1     Termination Agreement......................................37
         12.2     Effect of Termination......................................38

ARTICLE 13            MISCELLANEOUS..........................................38
         13.1     Notices....................................................38
         13.2     Consultation...............................................39
         13.3     Disclosure.................................................40
         13.4     Best Efforts...............................................40
         13.5     Counterparts...............................................40
</TABLE>

<PAGE>   5

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
<S>                                                                       <C>
                  Schedule 1         -   Financial Statements
                  Schedule 2         -   Drilling Rigs and Equipment
                  Schedule 3         -   Drilling Contracts
                  Schedule 4         -   Leased Real Property
                  Schedule 5         -   Vehicles
                  Schedule 6         -   Other Agreements
                  Schedule 7         -   Licenses and Permits
                  Schedule 8         -   Intellectual Property
                  Schedule 9         -   Allocation of Purchase Price
                  Schedule 10        -   Insurance Policies
                  Schedule 11        -   Consents and Approvals
                  Schedule 12        -   Permitted Encumbrances
                  Schedule 13        -   Subsequent Changes
                  Schedule 14        -   Legal and Regulatory Proceedings
                  Schedule 15        -   Environmental Matters
                  Schedule 16        -   Intentionally Left Blank
                  Schedule 17        -   Major Customers
                  Schedule 18        -   Opinion of Seller's Counsel
                  Schedule 19        -   Opinion of Purchaser's and UTI's Counsel
                  Schedule 20        -   Related Transactions
                  Schedule 21        -   Bill of Sale
</TABLE>

<PAGE>   6
                            ASSET PURCHASE AGREEMENT

         THIS AGREEMENT made the 24th day of March, 2000,

AMONG:

                  584022 ALBERTA LTD., a corporation existing under the
                  laws of Alberta (hereinafter referred to as the
                  "SELLER")

                                     - and -

                  THE PERSONS LISTED ON THE SIGNATURE PAGES HEREOF
                  UNDER THE HEADING "SHAREHOLDERS", each being a
                  shareholder of 584022 Alberta Ltd. (hereinafter
                  referred to collectively as the "SHAREHOLDERS")

                                     - and -

                  PHELPS DRILLING LTD., a corporation existing under
                  the laws of Alberta (hereinafter referred to as the
                  "PURCHASER")

                                     - and -

                  UTI ENERGY CORP., a corporation existing under the
                  laws of Delaware (hereinafter referred to as "UTI")

         THIS AGREEMENT WITNESSES THAT in consideration of the respective
covenants, agreements, representations, warranties and indemnities of the
Parties herein contained and for other good and valuable consideration (the
receipt and sufficiency of which are acknowledged by each Party), the Parties
agree as follows:

                                   ARTICLE 1
                                 INTERPRETATION

1.1      DEFINED TERMS

         For the purposes of this Agreement, unless the context otherwise
requires, the following terms shall have the respective meanings set out below
and grammatical variations of such terms shall have corresponding meanings:

         "ABCA" means the Business Corporations Act (Alberta) as in effect on
the date hereof;

         "AFFILIATE" has the meaning given to that term in the ABCA;

<PAGE>   7
                                      -2-

         "ANNUAL FINANCIAL STATEMENTS" means the financial statements of the
         Seller prepared by Seller's accountants on a review engagement basis as
         at and for financial year ended November 30, 1996 and thereafter
         prepared by the Seller for the financial years ended November 30, 1997,
         November 30, 1998 and November 30, 1999, including the notes thereto,
         copies of which are annexed hereto as Part 1 of Schedule 1;

         "ASSOCIATE" has the meaning given to that term in the ABCA;

         "ASSUMED OBLIGATIONS" has the meaning set out in Section 4.1;

         "BILL OF SALE" means the assignment, bill of sale and assumption
         agreement in substantially in the form attached as Schedule 21;

         "BUSINESS DAY" means any day of the week, except Saturday, Sunday, or
         any statutory holiday in Calgary, Alberta or Los Angeles, California;

         "CDN. $" or "$" means lawful currency of Canada;

         "CLOSING" means the closing of the purchase and sale contemplated
         hereby on the Closing Date;

         "CLOSING DATE" means April 18, 2000 or such other date as the Seller
         and the Purchaser may mutually determine;

         "CONTRACT" means any agreement, indenture, contract, lease, deed of
         trust, licence, option, instrument or other commitment, whether written
         or oral;

         "EFFECTIVE TIME" means 12:01 a.m. (Calgary time) on the Closing Date;

         "ENCUMBRANCE" means any encumbrance, lien, charge, hypothecation,
         pledge, mortgage, title retention agreement, security interest of any
         nature, adverse claim, exception, reservation, easement, right of
         occupation, any matter capable of registration against title,
         preferential arrangement or restriction of any kind including, without
         limitation, any restriction on the use, voting, transfer, receipt of
         income or other exercise of any attributes of ownership;

         "ENVIRONMENTAL LAWS" has the meaning set out in Subsection 5.19(a);

         "EXCLUDED ASSETS" has the meaning set out in Section 2.2;

         "EXCLUDED LIABILITIES" has the meaning set out in Section 4.2;

         "FINAL ACCOUNTING STATEMENT" has the meaning set out in Subsection
         3.2(c);

         "FINANCIAL STATEMENTS" means the Annual Financial Statements and the
         Interim Financial Statements;

         "GST" has the meaning set out in Subsection 3.4(a);

<PAGE>   8
                                      -3-

         "INTELLECTUAL PROPERTY" has the meaning set out in Subsection 2.1(l);

         "INTERIM ACCOUNTING STATEMENT" has the meaning set out in Subsection
         3.2(b);

         "INTERIM FINANCIAL STATEMENTS" means the unaudited financial statements
         of the Seller as prepared by the Seller as at and for the three month
         period commencing December 1, 1999 and ending on February 29, 2000, a
         copy of which are annexed hereto as Part 2 of Schedule 1;

         "LEASED REAL PROPERTY" means the real property that is used in the
         Purchased Business and leased by the Seller and which is described in
         Schedule 4;

         "LIABILITIES" means any and all indebtedness, liabilities and
         obligations, whether accrued or fixed, absolute or contingent, matured
         or unmatured or determined or determinable, including, without
         limitation, those arising under any Contract or law;

         "LOSSES" means, in respect of any matter, all claims, demands,
         proceedings, losses, damages, Liabilities, deficiencies, costs and
         expenses (including, without limitation, all legal and other
         professional fees and disbursements, interest, penalties and amounts
         paid in settlement) arising directly or indirectly as a consequence of
         such matter;

         "MANAGEMENT AGREEMENT" means the Amended and Restated Management
         Agreement dated September 1, 1996 between the Seller and Phelps, as
         amended;

         "PARTY" means a party to this Agreement, and "PARTIES" means all of
         such parties;

         "PERMITTED ENCUMBRANCES" means any of the following Encumbrances:

                  (i)      servitudes, easements, restrictions, rights-of-way
                           and other similar rights in real property or any
                           interest therein, provided the same are not of such
                           nature as to materially adversely affect the use of
                           the property subject thereto;

                  (ii)     undetermined or inchoate liens, charges and
                           privileges incidental to current construction or
                           current operations and statutory liens, charges,
                           adverse claims, security interests or encumbrances of
                           any nature whatsoever claimed or held by any
                           governmental authority that relate to obligations not
                           due or delinquent;

                  (iii)    assignments of insurance provided to landlords (or
                           their mortgagees) pursuant to the terms of any lease,
                           and liens or rights reserved in any lease for rent or
                           for compliance with the terms of such lease and that
                           relate to obligations not due or delinquent;

                  (iv)     security given in the ordinary course of the
                           Purchased Business to any public utility, any
                           municipality or government or any statutory or public
                           authority and that relate to obligations not due or
                           delinquent;

<PAGE>   9
                                      -4-

                  (v)      the reservations in any original grants from the
                           Crown of any real property or interest therein and
                           statutory exceptions to title, which do not
                           materially detract from the value of the real
                           property concerned or materially impair its use in
                           the operation of the Purchased Business;

                  (vi)     the Encumbrances described in Part 1 of Schedule 12
                           which will continue after Closing; and

                  (vii)    the Encumbrances described in Part 2 of Schedule 12
                           which will be discharged by the Seller at the
                           Closing;

         "PERSON" means any individual, corporation, partnership, joint venture,
         trust, unincorporated association, or any other judicial entity or a
         government, state or agency or political subdivision thereof;

         "PHELPS" means Phelps Drilling International Ltd., a corporation
         subsisting under the laws of Alberta;

         "PRIME RATE" means the annual variable rate of interest quoted or
         published from time to time by Royal Bank of Canada at its main branch
         in Calgary, Alberta as the "prime rate" of interest charged by it for
         Canadian dollar loans made in Canada;

         "PURCHASE PRICE" has the meaning set out in Section 3.1;

         "PURCHASED ASSETS" has the meaning set out in Section 2.1;

         "PURCHASED BUSINESS" means the business carried on by the Seller
         consisting primarily of an oilfield drilling contract business;

         "TAX ACT" means the Income Tax Act (Canada), as amended from time to
         time;

         "TIME OF CLOSING" means 2:00 p.m. (Calgary time) on the Closing Date,
         or such other time on the Closing Date as the Seller and the Purchaser
         may mutually determine;

         "US EXCHANGE ACT" means the United States Securities Exchange Act of
         1934, as amended from time to time;

         "US SECURITIES ACT" means the United States Securities Act of 1933, as
         amended from time to time;

         "UTI" means UTI Energy Corp., a corporation subsisting under the laws
         of the State of Delaware;

         "592655" means 592655 Alberta Ltd., a corporation subsisting under the
         laws of Alberta; and

         "700392" means 700392 Alberta Ltd., a corporation subsisting under the
         laws of Alberta.

<PAGE>   10
                                      -5-

1.2      CURRENCY

         Unless otherwise indicated, all dollar amounts in this Agreement are
expressed in Canadian funds.

1.3      SECTIONS AND HEADINGS

         The division of this Agreement into Articles, Sections and Subsections
and the insertion of headings are for convenience of reference only and shall
not affect the interpretation of this Agreement. Unless otherwise indicated, any
reference in this Agreement to an Article, Section, Subsection or Schedule
refers to the specified Article, Section or Subsection of or Schedule to this
Agreement.

1.4      NUMBER, GENDER AND PERSONS

         In this Agreement, words importing the singular number only shall
include the plural and vice versa, words importing gender shall include all
genders and words importing persons shall include individuals, corporations,
partnerships, associations, trusts, unincorporated organizations, governmental
bodies and other legal or business entities of any kind whatsoever.

1.5      ACCOUNTING PRINCIPLES

         Any reference in this Agreement to generally accepted accounting
principles refers to generally accepted accounting principles that have been
established in Canada, including those approved from time to time by the
Canadian Institute of Chartered Accountants or any successor body thereto.

1.6      ENTIRE AGREEMENT

         Except for the provisions of the Confidentiality Agreement dated June
16, 1999 between Phelps and UTI that survive the termination of this Agreement,
this Agreement constitutes the entire agreement between the Parties with respect
to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether written or oral. There are
no conditions, covenants, agreements, representations, warranties or other
provisions, express or implied, collateral, statutory or otherwise, relating to
the subject matter hereof except as herein provided.

1.7      TIME OF ESSENCE

         Time shall be of the essence of this Agreement.

1.8      APPLICABLE LAW

         This Agreement shall be construed, interpreted and enforced in
accordance with, and the respective rights and obligations of the Parties shall
be governed by, the laws of the Province of Alberta and the federal laws of
Canada applicable therein, and each Party irrevocably and unconditionally
submits to the non-exclusive jurisdiction of the courts of such province and all
courts competent to hear appeals therefrom.

<PAGE>   11
                                      -6-

1.9      SUCCESSORS AND ASSIGNS

         (a)      Subject to Subsection 1.9(b), no Party may assign any of its
                  rights or obligations hereunder without the prior written
                  consent of the other Parties.

         (b)      The Purchaser may assign its right under this Agreement in
                  whole or in part to any Affiliate of UTI; provided, however,
                  that any such assignment shall not relieve either the
                  Purchaser or UTI from any of its obligations to the Seller or
                  the Shareholders hereunder. Notwithstanding any such
                  assignment, if an event of default occurs under this
                  Agreement, the Seller shall have the option to claim
                  performance or payment of the obligations from the Purchaser,
                  UTI or the assignee or transferee and to bring proceedings
                  against any or all of them, provided that nothing herein shall
                  entitle the Seller to receive duplicate performance or payment
                  of the same obligation.

         (c)      This Agreement shall enure to the benefit of and shall be
                  binding on and enforceable by the Parties and, where the
                  context so permits, their respective successors and permitted
                  assigns.

1.10     SEVERABILITY

         If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct; provided that if the economic
or legal substance of the transactions contemplated hereby are affected in an
adverse manner to any Party by the severance of such provision, then the Parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the extent
possible.

1.11     AMENDMENTS AND WAIVERS

         No amendment or waiver of any provision of this Agreement shall be
binding on any Party unless consented to in writing by such Party. No waiver of
any provision of this Agreement shall constitute a waiver of any other provision
nor shall any waiver constitute a continuing waiver unless otherwise provided.

1.12     KNOWLEDGE OR AWARENESS

         In this Agreement, references to a Party's knowledge or awareness and
similar references mean the actual knowledge of the current officers and
employees of such Party who are primarily responsible for the matters in
question after such Persons have engaged in, or caused to be performed, a
reasonable review of the relevant files and records of such Party relating to
the Purchased Assets, but without any further inquiry and does not include
knowledge or awareness of any other Person.

<PAGE>   12
                                      -7-

1.13     SCHEDULES

         The following Schedules are attached to and form part of this
Agreement:

                  Schedule 1     -     Financial Statements
                  Schedule 2     -     Drilling Rigs and Equipment
                  Schedule 3     -     Drilling Contracts
                  Schedule 4     -     Leased Real Property
                  Schedule 5     -     Vehicles
                  Schedule 6     -     Other Agreements
                  Schedule 7     -     Licenses and Permits
                  Schedule 8     -     Intellectual Property
                  Schedule 9     -     Allocation of Purchase Price
                  Schedule 10    -     Insurance Policies
                  Schedule 11    -     Consents and Approvals
                  Schedule 12    -     Permitted Encumbrances
                  Schedule 13    -     Subsequent Changes
                  Schedule 14    -     Legal and Regulatory Proceedings
                  Schedule 15    -     Environmental Matters
                  Schedule 16    -     Intentionally Left Blank
                  Schedule 17    -     Major Customers
                  Schedule 18    -     Opinion of Seller's Counsel
                  Schedule 19    -     Opinion of Purchaser's and UTI's Counsel
                  Schedule 20    -     Related Transactions
                  Schedule 21    -     Bill of Sale

                                   ARTICLE 2
                      PURCHASE AND SALE OF PURCHASED ASSETS

2.1      PURCHASED ASSETS

         Upon the terms and subject to the conditions of this Agreement, the
Seller shall sell, assign and transfer to the Purchaser and the Purchaser shall
purchase from the Seller, on the Closing Date, all of the property and assets of
the Seller (other than the Excluded Assets), whether real or personal, tangible
or intangible, of every kind and description and wherever situate (collectively,
the "PURCHASED ASSETS"), including, without limitation, the following:

         (a)      DRILLING EQUIPMENT. All drilling rigs and related assets and
                  ancillary equipment together with all spare parts and related
                  assets necessarily incidental to the use of the drilling rigs
                  including, without limitation, the drilling equipment
                  described in Part 1 of Schedule 2;

         (b)      DRILLING CONTRACTS. All rights under drilling contracts under
                  which Seller has agreed to provide drilling services to a
                  third party including drilling contracts for which drilling
                  services have been commenced by Seller prior to but have not
                  been completed by Seller as of the Effective Time including,
                  without limitation, the Contracts described in Schedule 3;

<PAGE>   13
                                      -8-

         (c)      LEASED REAL PROPERTY. All rights (whether as lessee or lessor)
                  under leases of real property, together with all leasehold
                  improvements relating thereto including, without limitation,
                  the Leased Real Property described in Schedule 4;

         (d)      OFFICE EQUIPMENT. All furniture, furnishings and accessories,
                  computer equipment (hardware and software, including all
                  rights under licences and other agreements relating thereto),
                  telephones, cellular phones, office equipment and office
                  supplies together with all service, operational and other
                  manuals and all replacement parts and tools with respect to
                  the foregoing including, without limitation, all office
                  equipment described in Part 2 of Schedule 2;

         (e)      OTHER MACHINERY AND EQUIPMENT. All machinery and shop
                  equipment, hand tools and handling equipment including,
                  without limitation, the machinery and equipment described in
                  Part 3 of Schedule 2;

         (f)      VEHICLES. All trucks, cars and other vehicles including,
                  without limitation, the vehicles described in Schedule 5;

         (g)      LEASES OF PERSONAL PROPERTY. All rights under vehicle and
                  equipment leases, rental equipment contracts and office
                  equipment leases and Contracts including, without limitation,
                  the leases described in Schedules 2 and 5;

         (h)      INVENTORIES. All inventories including, without limitation,
                  raw materials and replacement parts;

         (i)      PREPAID EXPENSES. All prepaid expenses;

         (j)      OTHER AGREEMENTS. All rights under orders or Contracts for the
                  provision of goods or services (whether as buyer or seller),
                  distribution and agency agreements, and other Contracts not
                  otherwise referred to in this Section 2.1 including, without
                  limitation, the Contracts described in Schedule 6;

         (k)      LICENCES AND PERMITS. All licences, permits, approvals,
                  consents, registrations, certificates and other authorizations
                  required to carry on the Purchased Business in the ordinary
                  course including, without limitation, those described in
                  Schedule 7;

         (l)      INTELLECTUAL PROPERTY. All trade or brand names, business
                  names, trade marks, trade mark registrations and applications,
                  service marks, service mark registrations and applications,
                  copyrights, copyright registrations and applications, patents,
                  patent registrations and applications and other patent rights
                  (including any patents issued on such applications or rights),
                  trade secrets, proprietary manufacturing information and
                  know-how, equipment and parts lists and descriptions,
                  instruction manuals, inventions, inventors' notes, research
                  data, unpatented blue prints, drawings and designs, formulae,
                  processes, technology and other intellectual property,
                  together with all rights under licences, registered user
                  agreements, technology transfer agreements and other
                  agreements or instruments relating to any of the foregoing
                  (collectively, "INTELLECTUAL

<PAGE>   14
                                      -9-

                  PROPERTY") including, without limitation, the trademarks,
                  copyrights, patents, licences and agreements described in
                  Schedule 8;

         (m)      BOOKS AND RECORDS. All books and records (other than those
                  required by law to be retained by the Seller, copies of which
                  will be made available to the Purchaser), including, without
                  limitation, customer lists, sales records, price lists and
                  catalogues, sales literature, advertising material,
                  manufacturing data, production records, employee manuals,
                  personnel records, supply records, inventory records and
                  correspondence files (together with, in the case of any such
                  information that is stored electronically, the media on which
                  the same is stored);

         (n)      TELEPHONE NUMBERS. The right to the use of the Seller's
                  telephone and cellular numbers and facsimile numbers to the
                  extent permitted by the appropriate telephone authority; and

         (o)      GOODWILL. All goodwill, together with the exclusive right for
                  the Purchaser to represent itself as carrying on the Purchased
                  Business in succession to the Seller and the right to use any
                  words indicating that the Purchased Business is so carried on.

2.2      EXCLUDED ASSETS

         Notwithstanding the provisions of Section 2.1, the Purchased Assets
shall exclude the following property and assets of the Seller as determined at
the Effective Time (collectively, the "EXCLUDED ASSETS"):

         (a)      CASH. All cash on hand or in banks or other depositories;

         (b)      ACCOUNTS RECEIVABLE. All accounts receivable, trade accounts,
                  notes receivable, and book debts due or accruing due in
                  respect of services provided by the Seller or Phelps on behalf
                  of the Seller prior to the Effective Time and which have been
                  invoiced by the Seller or by Phelps prior to the Effective
                  Time;

         (c)      WORK IN PROGRESS. All work in progress consisting of services
                  provided by the Seller or by Phelps prior to the Effective
                  Time and which have not been invoiced by the Seller or by
                  Phelps as of the Effective Time;

         (d)      INCOME TAXES. All income tax payments and/or installments paid
                  by the Seller and the right to receive any refund of income
                  taxes paid by the Seller;

         (e)      PROVINCIAL SALES TAXES. All British Columbia provincial sales
                  tax payments and/or installments paid by the Seller and the
                  right to receive any refund of provincial sales taxes paid by
                  the Seller;

         (f)      GST. All GST payments and/or installments paid by the Seller
                  and the right to receive any refund of GST paid by the Seller;

         (g)      BANK ACCOUNTS. All bank accounts of the Seller;

<PAGE>   15
                                      -10-

         (h)      MANAGEMENT AGREEMENTS. The interest of Seller in the
                  Management Agreement;

         (i)      INTERCORPORATE INDEBTEDNESS. All amounts due or accruing due
                  to or by the Seller from or to Phelps including, without
                  limitation, any amounts due or accruing due from or to Phelps
                  under the Management Agreement; and

         (j)      LITIGATION. Any and all payments payable or to become payable
                  to the Seller in regard to any actions, suits or proceedings.

2.3      MERCHANTABILITY

         Notwithstanding anything to the contrary contained in this Agreement,
the Purchaser and UTI acknowledge that the Purchaser will acquire the Purchased
Assets on an "as is" "where is" basis and that the Seller does not make any
representation or warranty as to the fitness for purpose, condition or
merchantability of the Purchased Assets or any of them, except as expressly
provided otherwise in Article 5. Each of the Purchaser and UTI acknowledge and
agree that they have relied and shall rely solely on their own appraisal and
estimate as to the quantum value of the Purchased Assets and the Purchased
Business and that they have relied and shall rely on their own analysis related
thereto, notwithstanding anything to the contrary contained in this Agreement.

                                   ARTICLE 3
                                 PURCHASE PRICE

3.1      PURCHASE PRICE

         Subject to the adjustments provided for in Section 3.2, the aggregate
purchase price (the "PURCHASE PRICE") payable by the Purchaser to the Seller for
the Purchased Assets shall be Cdn. $8,807,333, payable by delivery of a bank
draft or wire transfer at Closing.

3.2      ADJUSTMENTS

         (a)      APPORTIONMENT OF BENEFITS AND OBLIGATIONS. All benefits and
                  obligations of any kind and nature accruing, payable or paid
                  in respect of the Purchased Assets shall be apportioned
                  between the Seller and the Purchaser as of the Effective Time.

         (b)      INTERIM ACCOUNTING. An interim accounting and adjustment shall
                  be carried out by the Seller and a statement (the "INTERIM
                  ACCOUNTING STATEMENT") shall be prepared and delivered by the
                  Seller to the Purchaser at least three Business Days prior to
                  the Closing Date based on the Seller's good faith estimate of
                  all adjustments to be made to the Purchase Price as of the
                  Effective Time. The Purchase Price shall be adjusted on the
                  Closing Date to reflect the adjustments provided for in the
                  Interim Accounting Statement. At its initiative or upon the
                  reasonable request of the Seller, the Purchaser agrees to
                  provide subsequent Interim Accounting Statement(s) after the
                  Closing Date and before the Final Accounting Statement is
                  provided, and the Seller and the Purchaser agree to make all
                  reasonable efforts to agree upon these subsequent interim
                  adjustments and to provide for the prompt payment of same,
                  together with interest thereon at the

<PAGE>   16
                                      -11-

                  Prime Rate from and including the Closing Date to but
                  excluding the date of payment.

         (c)      FINAL ACCOUNTING. Following Closing, a final accounting shall
                  be carried out by the Purchaser and a statement (the "FINAL
                  ACCOUNTING STATEMENT") shall be prepared and delivered by the
                  Purchaser to the Seller within nine (9) months after the
                  Closing Date. Neither the Seller nor the Purchaser shall be
                  obligated to make any further adjustments to the items
                  provided for in the Final Accounting Statement after the Final
                  Accounting Statement is approved or is deemed to have been
                  approved.

         (d)      APPROVAL OF FINAL ACCOUNTING STATEMENT. The Seller shall have
                  a period of 30 days from the date it receives the Final
                  Accounting Statement in which to review the same. For the
                  purpose of such review, the Purchaser agrees to permit the
                  Seller and its authorized representatives to examine all
                  working papers, schedules and other documentation used or
                  prepared by the Purchaser in connection with the preparation
                  of the Final Accounting Statement. If no objection to the
                  Final Accounting Statement is given to the Purchaser by the
                  Seller within such 30 day period in accordance with the
                  provisions of Subsection 3.2(e), the Final Accounting
                  Statement shall be deemed to have been approved as of the last
                  day of such 30 day period.

         (e)      OBJECTION TO FINAL ACCOUNTING STATEMENT. If the Seller objects
                  to the Final Accounting Statement within the 30 day period
                  referenced in Subsection 3.2(d) by giving written notice to
                  the Purchaser setting out in reasonable detail the nature of
                  such objection, the Seller and Purchaser agree to attempt to
                  resolve the matters in dispute within 15 days from the date of
                  giving such notice. If all matters in dispute are resolved by
                  the Seller and the Purchaser, the Final Accounting Statement
                  shall be modified to the extent required to give effect to
                  such resolution and shall be deemed to have been approved as
                  of the date of such resolution.

         (f)      DISPUTE RESOLUTION. If the Seller and Purchaser cannot resolve
                  all matters in dispute within the 15 day period referenced in
                  Subsection 3.2(e), all unresolved matters shall be submitted
                  for resolution to a single arbitrator chosen by the Seller and
                  the Purchaser, or failing agreement, chosen by a judge of the
                  Court of Queen's Bench of Alberta (the "ARBITRATOR"). The
                  Arbitrator shall be given access to all materials and
                  information reasonably requested by it for such purpose. The
                  rules and procedures to be followed in the arbitration
                  proceedings shall be determined by the Arbitrator in its
                  discretion. The Arbitrator's determination of all such matters
                  shall be final and binding and shall not be subject to appeal
                  by any Party. The fees and expenses of the Arbitrator shall be
                  borne equally by the Seller and the Purchaser or in such other
                  proportion as may be determined by the Arbitrator in its sole
                  discretion. The Final Accounting Statement shall be modified
                  to the extent required to give effect to the Arbitrator's
                  determination and shall be deemed to have been approved as of
                  the date of such determination.

<PAGE>   17
                                      -12-

         (g)      PAYMENT OF ADJUSTED AMOUNT. Any adjustments to the Purchase
                  Price shall be settled by the indebted Party by cash payment
                  to the recipient Party within 5 Business Days after the Final
                  Accounting Statement is deemed to have been approved in
                  accordance with this Section 3.2, together with interest
                  thereon at the Prime Rate from and including the Closing Date
                  to but excluding the date of payment.

3.3      ALLOCATION OF PURCHASE PRICE

         The Seller and the Purchaser agree to allocate the Purchase Price among
the Purchased Assets in accordance with Schedule 9 and to report the sale and
purchase of the Purchased Assets for all federal, provincial and local tax
purposes in a manner consistent with such allocation.

3.4      GST

         (a)      The Parties acknowledge that the Purchase Price is exclusive
                  of the Goods and Services Tax ("GST") as provided for in the
                  Excise Tax Act (Canada).

         (b)      Each of the Seller and the Purchaser represent and warrant to
                  the other that it is a registrant for GST purposes and will
                  continue to be a registrant at the Closing Date in accordance
                  with the provisions of the Excise Tax Act (Canada) and that
                  each of their GST registration numbers is:

                  Seller    - BN 13686 5854 RT0001

                  Purchaser - o

         (c)      The Seller represents and warrants to the Purchaser that the
                  sale of the Purchased Assets is a sale of a business or part
                  of a business carried on by the Seller at the time of the sale
                  for the purposes of the Excise Tax Act (Canada), and the
                  Purchaser represents and warrants to the Seller that the
                  acquisition of the Purchased Assets represents the acquisition
                  of all or substantially all of the property that can
                  reasonably be regarded as being necessary for the Purchaser to
                  be capable of carrying on the Seller's business or such part
                  of the Seller's business as a business.

         (d)      The Seller and the Purchaser shall jointly prepare and execute
                  the election prescribed by subsection 167(1) of the Excise Tax
                  Act (Canada) and the Purchaser shall file such election in the
                  manner and within the time prescribed thereto.

         (e)      Pursuant to paragraph Subsection 3.4(d) above, and subsection
                  167(1.1) of the Excise Tax Act (Canada), no GST is payable by
                  the Purchaser to the Seller in respect of the sale and
                  purchase of the Purchased Assets.

<PAGE>   18
                                      -13-

                                   ARTICLE 4
                            ASSUMPTION OF OBLIGATIONS

4.1      ASSUMPTION OF OBLIGATIONS

         Upon the terms and subject to the conditions of this Agreement, the
Purchaser shall assume, pay, satisfy, discharge, perform and fulfill, on the
Closing Date, all prospective obligations of the Seller which are required to be
performed on or after the Effective Time (the "ASSUMED OBLIGATIONS") under:

         (a)      the Contracts described in Schedules 2 through 6 inclusive and
                  Schedule 8;

         (b)      the licenses, permits, approvals, consents, registrations,
                  certificates and other authorizations described in Schedule 7;

         (c)      any other Contracts entered into by the Seller in the ordinary
                  course consistent with past business practice and generally
                  accepted industry practice for the provision of goods or
                  services by a third party to the Seller on normal commercial
                  terms and which will not require an aggregate expenditure in
                  excess of $100,000; and

         (d)      any other Contracts entered into by the Seller in the ordinary
                  course consistent with past business practice and generally
                  accepted industry practice for the provision of goods or
                  services by the Seller to a third party on normal commercial
                  terms and which will not result in the receipt of revenue in
                  excess of $50,000.

4.2      EXCLUSION OF LIABILITIES

         Except as set forth in Section 4.1, the Purchaser shall not be
obligated to pay or perform or otherwise be responsible for any Liabilities of
the Seller including any Liabilities or claims of any kind or nature arising out
of or related to the operation of the Purchased Business, the Seller or the
Purchased Assets accrued or incurred or caused by any act, condition, or event
existing or arising on or prior to the Effective Time or relating to the
Excluded Assets (the "EXCLUDED LIABILITIES").

                                   ARTICLE 5
                    REPRESENTATIONS AND WARRANTIES OF SELLER

         The Seller represents and warrants to the Purchaser as follows:

5.1      ORGANIZATION

         The Seller is a corporation validly subsisting under the laws of the
Province of Alberta and has the corporate power to carry on the Purchased
Business as now being conducted by it and to enter into this Agreement and to
perform its obligations hereunder. The Shareholders are all of the legal and
beneficial shareholders of the Seller.

<PAGE>   19
                                      -14-

5.2      AUTHORIZATION

         This Agreement has been duly authorized, executed and delivered by the
Seller and the Shareholders and is a legal, valid and binding obligation of the
Seller and the Shareholders, enforceable against them by the Purchaser in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency and other laws affecting the rights of creditors generally and except
that equitable remedies may be granted only in the discretion of a court of
competent jurisdiction.

5.3      NO CONFLICT

         The execution and delivery of this Agreement by the Seller and the
consummation of the transactions herein provided for will not result in:

         (a)      the breach or violation of any of the provisions of, or
                  constitute a default under, or conflict with:

                  (i)      any provision of the constating documents or by-laws
                           or resolutions of the board of directors (or any
                           committee thereof) or shareholders of the Seller;

                  (ii)     any judgment, decree, order or award of any court,
                           governmental body or arbitration having jurisdiction
                           over the Seller;

                  (iii)    any licence, permit, approval, consent or
                           authorization held by the Seller or necessary to the
                           operation of the Purchased Business except as set
                           forth in Schedule 11; or

                  (iv)     any applicable law, statute, ordinance, regulation or
                           rule;

         (b)      a default under any Contract to which the Seller is a party or
                  by which it is or any of the Purchased Assets are bound,
                  except for the notifications, consents and approvals described
                  in Part 2 of Schedule 11; or

         (c)      the creation or imposition of any Encumbrance on any of the
                  Purchased Assets.

5.4      NO OTHER AGREEMENTS TO PURCHASE
         No Person other than the Purchaser has any written or oral agreement or
option or any right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an agreement or option for the purchase or acquisition from
the Seller of any of the Purchased Assets.

5.5      SUFFICIENCY OF PURCHASED ASSETS

         The Purchased Assets owned or leased by the Seller are sufficient to
carry on the Purchased Business in a manner consistent with the past business
practices of the Seller. All the tangible Purchased Assets are situate at the
locations set out in Schedules 2 and 5.

<PAGE>   20
                                      -15-

5.6      TITLE TO PURCHASED ASSETS

         The Seller is the absolute legal and beneficial owner of and has good
and marketable title to, or in the case of leased, subleased, licensed or
sublicensed Purchased Assets, valid and subsisting leasehold interests or
licenses as the case may be in, all of the Purchased Assets, free and clear of
all Encumbrances, except Permitted Encumbrances, and is exclusively entitled to
possess and dispose of the Purchased Assets (subject only to the necessity for
obtaining the consents and approvals described in Schedule 11).

5.7      LEASED REAL PROPERTY

         The Seller is not the beneficial or registered owner of and has not
agreed to acquire any real property or any interest in any real property other
than the Leased Real Property described in Schedule 4. The Seller is not a party
to any lease or agreement to lease in respect of any real property, whether as
lessor or lessee, other than the leases (the "LEASES") described in Schedule 4.
Schedule 4 sets out the parties to each of the Leases, their dates of execution
and expiry dates, any options to renew, the locations of the leased lands and
premises and the rent payable thereunder. Except as described in Schedule 4, the
Seller occupies the Leased Property and has the exclusive right to occupy and
use the Leased Property. Each of the Leases is in good standing and in full
force and effect, and neither the Seller nor any other party thereto is in
breach of any covenants, conditions or obligations contained therein. The Seller
has provided to the Purchaser a true and complete copy of each Lease and all
amendments thereto referred to in Schedule 4.

5.8      INTELLECTUAL PROPERTY

         Schedule 8 sets out all registered or pending Intellectual Property
(including particulars of registration or application for registration) and all
licences, registered user agreements and other Contracts that comprise or relate
to Intellectual Property. The Intellectual Property comprises all trade or brand
names, business names, trade marks, service marks, copyrights, patents, trade
secrets, know-how, inventions, designs and other industrial or intellectual
property necessary to conduct the Purchased Business. The Seller is the
beneficial owner of the Intellectual Property, free and clear of all
Encumbrances, and is not a party to or bound by any Contract or any other
obligation whatsoever that limits or impairs its ability to sell, transfer,
assign or convey, or that otherwise affects, the Intellectual Property. No
Person has been granted any interest in or right to use all or any portion of
the Intellectual Property. To the knowledge of the Seller, the conduct of the
Purchased Business does not infringe upon the industrial or intellectual
property rights, domestic or foreign, of any other Person. Neither the Seller
nor the Shareholders are aware of a claim of any infringement or breach of any
industrial or intellectual property rights of any other Person, nor have the
Seller or the Shareholders received any notice that the conduct of the Purchased
Business, including the use of the Intellectual Property, infringes upon or
breaches any industrial or intellectual property rights of any other Person, and
the Seller and the Shareholders have no knowledge of any infringement or
violation of any of the Seller's rights in the Intellectual Property. Neither
the Seller nor the Shareholders are aware of any state of facts that casts doubt
on the validity or enforceability of any of the Intellectual Property. The
Seller has provided to the Purchaser a true and complete copy of all Contracts
and amendments thereto that comprise or relate to the Intellectual Property
referred to in Schedule 8.

<PAGE>   21
                                      -16-

5.9      INSURANCE

         The Seller has insured the Purchased Assets set forth in Schedules 2, 4
and 5 in accordance with the Seller's normal business practices against loss or
damage by all insurable hazards or risks and such insurance coverage will be
continued in full force and effect up to and including the Time of Closing.
Schedule 10 sets out all insurance policies (specifying the insurer, the amount
of the coverage, the type of insurance, the policy number and any pending claims
thereunder) maintained by the Seller on the Purchased Assets set forth in
Schedules 2, 4 and 5 as of the date hereof and true and complete copies of the
most recent inspection reports, if any, received from insurance underwriters or
others as to the condition of the Purchased Assets. The Seller is not in default
with respect to any of the provisions contained in any such insurance policy and
has not failed to give any notice or present any claim under any such insurance
policy, in due and timely fashion. The Seller has provided to the Purchaser a
true copy of each insurance policy referred to in Schedule 10.

5.10     MATERIAL CONTRACTS

         The Schedules describe each of the following material subsisting
Contracts relating to the Purchased Business or Purchased Assets to which the
Seller is a party or by which it or any of the Purchased Assets is bound:

         (a)      any Contract for the purchase or supply of materials,
                  supplies, equipment or services involving more than $50,000 in
                  respect of any one such Contract or more than $100,000 in
                  respect of all such Contracts;

         (b)      any employment, consulting or management Contract or any other
                  Contract with any officer, employee or consultant, other than
                  oral Contracts of indefinite hire terminable by the Seller
                  without cause or reasonable notice;

         (c)      any profit sharing, bonus, stock option, pension, retirement,
                  disability, stock purchase, medical, dental, hospitalization,
                  insurance or similar plan or agreement providing benefits to
                  any current or former director, officer, employee or
                  consultant;

         (d)      any Encumbrance registered against any of the Purchased Assets
                  or a leasing transaction of the type required to be
                  capitalized in accordance with generally accepted accounting
                  principles;

         (e)      any distributor, sales, advertising, agency or manufacturer's
                  representative Contract;

         (f)      any collective bargaining agreement or other Contract with any
                  labour union;

         (g)      any Contracts for capital expenditures in excess of $50,000 in
                  respect of any one such Contract or in excess of $100,000 in
                  the aggregate in respect of all such Contracts;

         (h)      any Contract for the sale of any assets;

<PAGE>   22
                                      -17-

         (i)      any Contract pursuant to which the Seller is a lessor of any
                  machinery, equipment, motor vehicles, office furniture,
                  fixtures or other personal property;

         (j)      any non-competition or similar Contract;

         (k)      any licence, franchise or other agreement that relates in
                  whole or in part to any Intellectual Property;

         (l)      any agreement of guarantee, support, indemnification,
                  assumption or endorsement of, or any other similar commitment
                  with respect to, the obligations, Liabilities (whether
                  accrued, absolute, contingent or otherwise) or indebtedness of
                  any other Person, except for cheques endorsed for collection
                  in the ordinary course of the Purchased Business, which
                  obligations, Liabilities or indebtedness the Purchaser shall
                  be obligated to pay, assume or perform or otherwise be
                  responsible;

         (m)      any Contract that expires, or may expire if the same is
                  renewed or extended at the option of any Person other than the
                  Seller, more than one year after the date of this Agreement;

         (n)      any Contract entered into by the Seller other than in the
                  ordinary course of the Purchased Business; or

         (o)      any other Contract which is material to the Seller or the
                  absence of which would have a material adverse effect on the
                  Purchased Business or the Purchased Assets.

Except as described in the Schedules, the Seller has performed all of the
obligations required to be performed by it and is entitled to all benefits
under, and is not in default or alleged to be in default in respect of, any
Contract relating to the Purchased Business or Purchased Assets to which it is a
party or by which it is bound; the Seller has not received payment under any
Contract for any goods or services not yet provided by the Seller under such
Contract; all such Contracts are in good standing and in full force and effect,
and no event, condition or occurrence exists that, after notice or lapse of time
or both, would constitute a default under any of the foregoing. The Seller has
provided to the Purchaser a true and complete copy of each Contract listed or
described in the Schedules and all amendments thereto, other than oral
Contracts.

5.11     COMPLIANCE WITH LAWS; GOVERNMENTAL AUTHORIZATION

         To the knowledge of the Seller, the Seller has complied in all material
respects with all laws, statutes, ordinances, regulations, rules, judgments,
decrees or orders applicable to the Purchased Business or the Purchased Assets.
Schedule 7 sets out a complete and accurate list of all licences, permits,
approvals, consents, certificates, registrations and authorizations (whether
governmental, regulatory or otherwise) (the "LICENCES") held by or granted to
the Seller, and there are no other licences, permits, approvals, consents,
certificates, registrations or authorizations necessary to carry on the
Purchased Business or to own or lease any of the Purchased Assets. Each Licence
is valid, subsisting, in good standing, and transferable or assignable to the
Purchaser, except as noted otherwise in Schedule 7. The Seller has received no
notice of nor is the Seller in default or breach of any Licence and, to the
knowledge of the Seller, no proceeding is pending or threatened to revoke or
limit any Licence. The Seller has provided

<PAGE>   23
                                      -18-

to the Purchaser a true and complete copy of each Licence and all amendments
thereto referred to in Schedule 7.

5.12     CONSENTS AND APPROVALS

         (a)      REGULATORY CONSENTS. There is no requirement to make any
                  filing with, give any notice to or to obtain any licence,
                  permit, certificate, registration, authorization, consent or
                  approval of, any governmental or regulatory authority as a
                  condition to the lawful consummation of the transactions
                  contemplated by this Agreement, except for the filings,
                  notifications, licences, permits, certificates, registrations,
                  consents and approvals described in Part 1 of Schedule 11 or
                  that relate solely to the identity of the Purchaser or the
                  nature of any business carried on by the Purchaser.

         (b)      THIRD PARTY CONSENTS. There is no requirement under any
                  Contract relating to the Purchased Business or Purchased
                  Assets to which the Seller is a party or by which it is bound
                  to give any notice to, or to obtain the consent or approval
                  of, any party to such agreement, instrument or commitment
                  relating to the consummation of the transactions contemplated
                  by this Agreement, except for the notifications, consents and
                  approvals described in Part 2 of Schedule 11.

5.13     FINANCIAL STATEMENTS

         The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a basis consistent with
prior periods, are correct and complete, and present fairly the assets,
Liabilities and financial condition of the Seller as at the respective dates of
the Financial Statements and the sales, earnings and results of operations of
the Seller for the respective periods covered by the Financial Statements. The
Seller has provided to the Purchaser true and complete copies of the Financial
Statements.

5.14     BOOKS AND RECORDS

         The books and records of the Seller fairly and correctly set out and
disclose, in accordance with Canadian generally accepted accounting principles,
the financial position of the Seller as at the date hereof, and all financial
transactions of the Seller relating to the Purchased Business have been
accurately recorded in such books and records.

5.15     ABSENCE OF CHANGES

         Since September 1, 1999, the Purchased Business has been carried on in
the ordinary and normal course consistent with the Seller's past business
practice and, except as set forth in the Financial Statements or as described in
Schedule 13 there has not been:

         (a)      any material adverse change in the condition (financial or
                  otherwise), assets, Liabilities, operations, earnings,
                  business or prospects of the Purchased Business;

<PAGE>   24
                                      -19-

         (b)      any damage, destruction or loss (whether or not covered by
                  insurance) affecting Purchased Assets having a value in excess
                  of $100,000 in each instance or $200,000 in the aggregate;

         (c)      any Liability or Contract incurred or entered into by the
                  Seller in connection with the Purchased Business, other than
                  those incurred or entered into in the ordinary and normal
                  course of the Purchased Business and consistent with the
                  Seller's past business practice;

         (d)      any labour trouble adversely affecting the Purchased Business
                  or the Purchased Assets;

         (e)      any sale, assignment, transfer, licenses, disposition, pledge,
                  mortgage or granting of a security interest or other
                  Encumbrance on or over any Purchased Assets;

         (f)      any write-down or write-off of any inventory, accounts or
                  notes receivable or any portion thereof relating to the
                  Purchased Business in amounts exceeding $50,000 in each
                  instance or $100,000 in the aggregate;

         (g)      any amendment, termination or waiver of any rights of value to
                  the Purchased Business in amounts exceeding $100,000 in each
                  instance or $200,000 in the aggregate;

         (h)      any capital expenditures or commitments relating to the
                  Purchased Business or Purchased Assets in excess of $200,000
                  in the aggregate;

         (i)      any change in the maintenance procedures followed by the
                  Seller;

         (j)      any change in the accounting or tax practices followed by the
                  Seller; or

         (k)      any change in the credit terms offered to customers of, or by
                  suppliers to, the Purchased Business.

5.16     NON-ARM'S LENGTH TRANSACTIONS

         (a)      Except for any Contracts which do not form part of the
                  Purchased Assets or the Assumed Obligations, the Seller is not
                  party to any Contract with any officer, director, employee,
                  shareholder or any other Person not dealing at arm's length
                  with the Seller (within the meaning of the Tax Act) or any
                  Affiliate or Associate of any of the foregoing.

         (b)      No officer, director or shareholder of the Seller and no
                  entity that is an Affiliate or Associate of one or more of
                  such individuals:

                  (i)      owns, directly or indirectly, any interest in (except
                           for shares representing less than five per cent of
                           the outstanding shares of any class or series of any
                           publicly traded company), or is an officer, director,
                           employee or consultant of, any Person that is, or is
                           engaged in business as, a competitor

<PAGE>   25
                                      -20-

                           of the Purchased Business or a lessor, lessee,
                           supplier, distributor, sales agent or customer of the
                           Purchased Business; or

                  (ii)     owns, directly or indirectly, in whole or in part,
                           any property that the Seller uses in the operation of
                           the Purchased Business.

5.17     LITIGATION

         Except as described in Schedule 14, there are no actions, suits or
proceedings (whether or not purportedly on behalf of the Seller) pending or, to
the best knowledge of the Seller, threatened against or affecting the Seller at
law or in equity or before or by any federal, provincial, municipal or other
governmental department, court, commission, board, bureau, agency or
instrumentality, domestic or foreign, or before or by an arbitrator or
arbitration board. The Seller is not aware of any ground on which any such
action, suit or proceeding might be commenced with any reasonable likelihood of
success.

5.18     RESIDENCY

         The Seller is a resident of Canada for the purposes of the Tax Act.

5.19     ENVIRONMENTAL MATTERS

         (a)      Except as described in Schedule 15, the Seller has been and is
                  in compliance in all material respects with all applicable
                  federal, provincial, municipal and local laws, statutes,
                  ordinances, by-laws and regulations, and other directives and
                  decisions rendered by any ministry, department or
                  administrative or regulatory agency ("ENVIRONMENTAL LAWS")
                  relating to the protection of the environment, occupational
                  health and safety or the manufacture, processing,
                  distribution, use, treatment, storage, disposal, transport or
                  handling of any pollutants, contaminants, chemicals or
                  industrial toxic or hazardous wastes or substances.

         (b)      The Seller has never received any notice of nor been
                  prosecuted for non-compliance with any Environmental Laws with
                  respect to the Purchased Business or the Purchased Assets.

         (c)      The Seller has delivered to the Purchaser a true and complete
                  copy of all environmental audits, evaluations, assessments,
                  studies or tests relating to the Purchased Business or
                  Purchased Assets of which it is aware.

5.20     EMPLOYEE MATTERS

         The Seller has no employees and has not entered into any consulting or
employment contracts or similar contracts.

5.21     CUSTOMERS AND SUPPLIERS

         (a)      Schedule 17 sets out the major customers of the Purchased
                  Business, being those customers of the Purchased Business
                  accounting for more than 10% of revenue

<PAGE>   26
                                      -21-

                  during either the period January 1, 1996 to February 29, 2000,
                  or the last 12 calendar months. To the knowledge of the Seller
                  there has been no termination or cancellation of, and no
                  modification or change in, the Seller's business relationship
                  with any major customer or group of major customers. The
                  Seller has no reason to believe that the benefits of any
                  relationship with any of the major customers or suppliers of
                  the Purchased Business will not continue after the Closing
                  Date in substantially the same manner as prior to the date of
                  this Agreement.

         (b)      Except as set forth in Schedule 17, the Seller has not derived
                  any of its revenues during its last fiscal year from sales to,
                  or within, the United States or from services performed in the
                  United States.

5.22     Y2K COMPLIANCE

         To the knowledge of the Seller, all of the Purchased Assets are Year
2000 Compliant to the extent applicable. For the purposes of this Agreement,
"Year 2000 Compliant" means that:

         (a)      neither the performance nor the functionality of the Purchased
                  Assets will be affected by dates prior to, during, or after
                  the year 2000, or by any changes to the field configuration
                  which contains the date information within any part of the
                  Purchased Assets caused by the advent of the year 2000;

         (b)      the Purchased Assets are and will be capable of accurate and
                  timely processing, storage, inputting, outputting, displaying,
                  sorting and sequencing of any data or input which includes an
                  indication of or reference to a date; and

         (c)      the Purchased Assets are and will be capable of accurate and
                  timely identification, manipulation, and calculation using
                  dates outside the 1900 - 1999 year range.

5.23     FULL DISCLOSURE

         To the knowledge of the Seller, there are no facts pertaining to the
Seller, the Purchased Business or the Purchased Assets which could reasonably be
expected to have a material adverse effect on the Purchased Business or the
Purchased Assets and which have not been disclosed in this Agreement or the
Schedules.

5.24     BROKERS

         No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Seller.

<PAGE>   27
                                      -22-

                                   ARTICLE 6
                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

         The Purchaser and UTI, jointly and severally, represent and warrant to
the Seller as follows:

6.1      ORGANIZATION

         The Purchaser is a corporation validly subsisting under the laws of the
Province of Alberta and has the corporate power to enter into this Agreement and
to perform its obligations hereunder. UTI is a corporation validly subsiding
under the laws of the State of Delaware and has the corporate power to enter
into this Agreement and to perform its obligations hereunder.

6.2      AUTHORIZATION

         This Agreement has been duly authorized, executed and delivered by each
of the Purchaser and UTI and are legal, valid and binding obligations of the
Purchaser and UTI enforceable against the Purchaser and UTI, as the case may be,
by the Seller in accordance with the terms of this Agreement, except as such
enforcement may be limited by bankruptcy, insolvency and other laws affecting
the rights of creditors generally and except that equitable remedies may only be
granted in the discretion of a court of competent jurisdiction.

6.3      NO CONFLICT

         The execution and delivery of this Agreement by each of the Purchaser
and UTI and the consummation of the transactions herein provided for will not
result in the violation of any provision of, or constitute a default under, or
conflict with or cause the acceleration of any obligation of the Purchaser or
UTI under:

         (a)      any provision of the constating documents or by-laws or
                  resolutions of the board of directors (or any committee
                  thereof) or shareholders of the Purchaser or UTI;

         (b)      any judgment, decree, order or award of any court,
                  governmental body or arbitrator having jurisdiction over the
                  Purchaser or UTI;

         (c)      any applicable law, statute, ordinance, regulation or rule; or

         (d)      any Contract to which the Purchaser or UTI is a party or by
                  which the Purchaser or UTI are bound.

6.4      CONSENTS AND APPROVALS

         (a)      REGULATORY CONSENTS. There is no requirement for either the
                  Purchaser or UTI to make any filing with, give any notice to
                  or obtain any licence, permit, certificate, registration,
                  authorization, consent or approval of, any government or
                  regulatory authority as a condition to the lawful consummation
                  of the transactions contemplated by this Agreement and that
                  would materially adversely affect the

<PAGE>   28
                                      -23-

                  Purchaser's or UTI's ability to consummate the transactions
                  contemplated by this Agreement.

         (b)      THIRD PARTY CONSENTS. Except for notices to UTI's lenders and
                  any applicable stock exchange, there is no requirement under
                  any Contract to which either the Purchaser or UTI is a party
                  or by which either the Purchaser or UTI is bound, to give
                  notice to, to obtain the consent or approval of, any party to
                  such Contract relating to the transactions contemplated in
                  this Agreement that would materially adversely affect the
                  Purchaser's or UTI's ability to consummate the transactions
                  contemplated by this Agreement.

6.5      INVESTMENT CANADA

         The Purchaser will comply with the Investment Canada Act and the
Competition Act to the extent, if any, applicable to the transactions referred
to in this Agreement including, without limitation, the related transactions
contemplated by the agreements listed in Schedule 20.

6.6      BROKERS

         No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Purchaser.

                                   ARTICLE 7
                   SURVIVAL OF REPRESENTATIONS AND WARRANTIES

7.1      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

         Notwithstanding the Closing or any investigation made by or on behalf
of the Party entitled to the benefit thereof, the representations and warranties
contained in this Agreement and in all certificates and documents delivered
pursuant to or contemplated by this Agreement shall survive the Closing of the
transactions contemplated hereby and shall not be merged in any conveyances or
other documents provided pursuant to this Agreement, provided that no claim may
be made by one Party against any other Party, pursuant to or based upon any of
these representations and warranties unless written notice thereof with
reasonable particulars shall have been provided by such Party to the other Party
within 18 months following the Closing.

                                   ARTICLE 8
                                   COVENANTS

8.1      ACCESS TO PURCHASED BUSINESS AND PURCHASED ASSETS

         The Seller shall permit the Purchaser to conduct a due diligence review
of the Purchased Assets and the records and documents related thereto and to the
Purchased Business. The Seller shall forthwith make available to the Purchaser
and its authorized representatives and, if requested by the Purchaser, provide a
copy to the Purchaser of, all title documents, Contracts,

<PAGE>   29
                                      -24-

financial statements, policies, plans, reports, licences, orders, permits, books
of account, accounting records and all other documents, information and data
relating to the Purchased Business. The Seller shall afford the Purchaser and
its authorized representatives every reasonable opportunity to have free and
unrestricted access to the Purchased Assets during normal business hours and all
other property and assets utilized in the Purchased Business. At the request of
the Purchaser, the Seller shall execute such consents, authorizations and
directions as may be necessary to permit any inspection of the Purchased
Business or any of the Purchased Assets or to enable the Purchaser or its
authorized representative to obtain full access to all files and records
relating to any of the Purchased Assets maintained by governmental or other
public authorities. At the Purchaser's request, the Seller shall co-operate with
the Purchaser in arranging any such meetings as the Purchaser should reasonably
request with:

         (a)      customers, suppliers, distributors or others who have or have
                  had a business relationship with the Seller in respect of the
                  Purchased Business; and

         (b)      the auditors, solicitors or any other persons engaged or
                  previously engaged to provide services to the Seller who have
                  knowledge of matters relating to the Purchased Business or
                  Purchased Assets.

         In particular, without limitation, the Seller shall permit the
Purchaser's representatives or consultants to conduct all such testing and
inspection in respect of environmental matters at such locations of the
Purchased Business as the Purchaser may determine, in its sole discretion, as
may be required to satisfy the Purchaser in respect of such matters and the
Seller shall permit the representatives or consultants of the Purchaser to
conduct a physical review of the equipment of the Purchased Business as the
Purchaser reasonably deems necessary so as to enable the Purchaser to appraise
and/or estimate the quantum of value of such equipment. The exercise of any
rights of inspection by or on behalf of the Purchaser under this Section 8.1
shall not mitigate or otherwise affect any of the representations and warranties
of the Seller hereunder, which shall continue in full force and effect as
provided in Section 7.1. Notwithstanding the foregoing or anything to the
contrary contained in this Agreement, each of the Purchaser and UTI acknowledge
and agree that it has relied and shall rely solely on its own appraisal and
estimate of the quantum of value of the Purchased Assets and the Purchased
Business and that it has relied and shall rely on its own analysis related
thereto.

8.2      DELIVERY OF BOOKS AND RECORDS

         At the Time of Closing, there shall be delivered to the Purchaser by
the Seller all the books and records described in Section 2.1. The Purchaser
agrees that it will preserve the books and records so delivered to it for a
period of 4 years from the Closing Date, or for such longer period as is
required by any applicable law, and will permit the Seller or its authorized
representatives reasonable access thereto in connection with the affairs of the
Seller relating to its matters, but the Purchaser shall not be responsible or
liable to the Seller for or as result of any accidental loss or destruction of
or damage to any such books or records. Until March 1, 2001, the Seller will be
permitted reasonable access to the computer system which relates to the
Purchased Assets to handle accounting and other matters relating to Seller.

<PAGE>   30
                                      -25-

8.3      CHANGE OF NAME

         The Seller agrees that from and after the Closing Date the Seller will
not use the words "Phelps Drilling" or "Phelps Drilling International" or any
variation thereof or any similar words in any active business or other activity
which might create any confusion over these names.

8.4      CONDUCT OF PURCHASED BUSINESS PRIOR TO CLOSING

         Without in any way limiting any other obligations of the Seller
hereunder, during the period from the date hereof to the Time of Closing:

         (a)      CONDUCT BUSINESS IN THE ORDINARY COURSE. The Seller shall
                  conduct the Purchased Business and maintain the Purchased
                  Assets in a proper and prudent manner consistent with past
                  practice and generally accepted industry practice. In
                  addition, the Seller shall not, without the prior written
                  consent of the Purchaser (such consent not to be unreasonably
                  withheld), (i) enter into any transaction or refrain from
                  doing any action that, if effected before the date of this
                  Agreement, would constitute a breach of any representation,
                  warranty, covenant or other obligation of the Seller contained
                  herein, or (ii) make any material decisions or enter into any
                  material Contracts with respect to the Purchased Business or
                  the Purchased Assets other than the entering into or
                  performance of drilling contracts and maintenance and repair
                  activities that are entered into or conducted in the ordinary
                  course of business and in a proper and prudent manner
                  consistent with past business practice and generally accepted
                  industry practice;

         (b)      CONTINUE INSURANCE. The Seller shall (i) continue to maintain
                  in full force and effect all policies of insurance or renewals
                  thereof now in effect, (ii) take out, at the expense of the
                  Purchaser, such additional insurance as may be reasonably
                  requested by the Purchaser and (iii) give all notices and
                  present all claims under all policies of insurance in a due
                  and timely fashion;

         (c)      REGULATORY CONSENTS. The Seller shall use its best efforts to
                  obtain, at or prior to the Time of Closing, from all
                  appropriate federal, provincial, municipal or other
                  governmental or regulatory bodies, the licences, permits,
                  consents, approvals, certificates, registrations and
                  authorizations described in Part 1 of Schedule 11;

         (d)      PRESERVE GOODWILL. The Seller shall use its best efforts to
                  preserve intact the Purchased Business and Purchased Assets
                  and to carry on the Purchased Business as currently conducted,
                  and the Seller shall use its best efforts to promote and
                  preserve for the Purchaser the goodwill of suppliers,
                  customers and others having business relations with the
                  Seller;

         (e)      DISCHARGE LIABILITIES. The Seller shall pay and discharge the
                  Liabilities of the Seller relating to the Purchased Business
                  in the ordinary course in accordance and consistent with the
                  previous practice of the Seller, except those contested in
                  good faith by the Seller;

<PAGE>   31
                                      -26-

         (f)      CORPORATE ACTION. The Seller shall use its best efforts to
                  take or cause to be taken all necessary corporate action,
                  steps and proceedings to approve or authorize validly and
                  effectively the transfer of the Purchased Assets to the
                  Purchaser and the execution and delivery of this Agreement and
                  the other agreements and documents contemplated hereby and to
                  cause all necessary meetings of directors and shareholders of
                  the Seller to be held for such purpose; and

         (g)      BEST EFFORTS. The Seller shall use its best efforts to satisfy
                  the conditions contained in Section 9.1.

8.5      THIRD PARTY CONSENTS AND NOVATIONS

         (a)      The Seller shall promptly give such notices to third parties
                  and use its best efforts to obtain such third party consents
                  and novations as the Purchaser or the Seller may reasonably
                  deem necessary or desirable in connection with the
                  transactions contemplated by this Agreement including, without
                  limitation, those consents and novations described in Schedule
                  11. The Purchaser shall cooperate and use its best efforts to
                  assist the Seller in giving such notices and obtaining such
                  consents and novations.

         (b)      Each of the Seller and the Purchaser agree that, in the event
                  any consent or novation necessary or desirable to preserve for
                  the Purchased Business any right or benefit under any lease,
                  license, contract, commitment or other agreement or
                  arrangement to which the Seller is a party is not obtained or
                  in the reasonable opinion of the Seller shall not be obtained
                  prior to the Closing, the Seller will, subsequent to the
                  Closing, cooperate with the Purchaser in attempting to obtain
                  such consent or novation as promptly thereafter as
                  practicable. Until such consent or novation is obtained or if
                  such consent or novation cannot be obtained, the Seller shall
                  use its best efforts to provide the Purchaser with the rights
                  and benefits of the affected lease, license, contract,
                  commitment or other agreement or arrangement (collectively,
                  the "NON-ASSIGNABLE RIGHTS") for the term of such lease,
                  license, contract or other agreement or arrangement, and, if
                  the Seller provides such rights and benefits, the Purchaser
                  shall assume the obligations and burdens thereunder and
                  indemnify and save harmless the Seller in respect thereof. In
                  particular, the Seller shall, at the request of the Purchaser:

                  (i)      hold any such Non-Assignable Rights in trust for the
                           Purchaser or act as agent for the Purchaser;

                  (ii)     enforce any rights of the Seller arising from such
                           Non-Assignable Rights against the issuer thereof or
                           the other party or parties thereto;

                  (iii)    take all such actions and do, or cause to be done,
                           all such things at the request of the Purchaser as
                           shall reasonably be necessary and proper in order
                           that the value of any Non-Assignable Rights shall be
                           preserved and shall enure to the benefit of the
                           Purchaser; and

                  (iv)     pay over to the Purchaser, all monies collected by or
                           paid to the Seller in respect of such Non-Assignable
                           Rights in respect of amounts due or accruing due
                           subsequent to the Effective Time.

<PAGE>   32

                                      -27-

         (iv)     pay over to the Purchaser, all monies collected by or paid to
                  the Seller in respect of such Non-Assignable Rights in respect
                  of amounts due or accruing due subsequent to the Effective
                  Time.

8.6      FINANCIAL STATEMENT COOPERATION

         The Seller agrees, at the cost and expense of the Purchaser, to
cooperate with the Purchaser and to assist the Purchaser's outside auditors in
the preparation of any financial statements relating to the Purchased Assets and
the Seller that may be reasonably requested by the Purchaser or UTI for filing
with the Securities and Exchange Commission in connection with any filings that
may be made by the Purchaser or UTI under the US Securities Act or the US
Exchange Act. Such financial statements shall consist of (i) such audited
balance sheets and audited statements of operations, cash flows and changes in
equity together with the notes thereon and (ii) such unaudited interim balance
sheet and unaudited interim statements of operations, cash flows and changes in
equity, if any, in each case as the Purchaser or UTI shall reasonably deem to be
required by the Purchaser or UTI.

8.7      EXCLUSIVITY

         From the date hereof until the Closing, neither the Seller nor any of
the Shareholders will directly or indirectly initiate discussions with or engage
in negotiations with any Person other than the Purchaser for any sale of the
Purchased Business or any of the Purchased Assets, whether through any sale of
assets, sale of shares, reorganization or otherwise.

8.8      NON-COMPETITION

         (a)      Each of the Seller and the Shareholders acknowledges that
                  pursuant to this Agreement the Purchaser will purchase from
                  the Seller the goodwill of the Seller and the Purchased
                  Business, and that to induce the Purchaser to pay the Purchase
                  Price, the protection and maintenance of such goodwill
                  constitutes a legitimate interest to be protected by the
                  Purchaser and UTI by this covenant not to compete. Therefore,
                  each of the Seller and the Shareholders agrees, severally and
                  not jointly, that for the period (the "NONCOMPETITION PERIOD")
                  commencing upon the Closing Date and ending upon the fifth
                  anniversary (the "ENDING DATE") of the Closing Date, he, she
                  or it shall not, directly or indirectly, either as an
                  employee, employer, consultant, agent, principal, partner,
                  shareholder (other than a shareholder of 5% or less of a
                  publicly traded company), corporate officer or director, or in
                  any other individual or representative capacity, engage or
                  participate in the land contract drilling business in North
                  America (such entire geographic area is hereinafter referred
                  to as the "NONCOMPETITION AREA") provided that nothing herein
                  shall restrict the Seller or any Shareholder upon his or her
                  cessation of employment with the Purchaser from providing
                  well-site drilling consulting services to operators. Each of
                  the Seller and the Shareholders represents to the Purchaser
                  that the enforcement of the restriction contained in this
                  Section 8.8 would not be unduly burdensome to it. Each of the
                  Seller and the Shareholders further represents and
                  acknowledges that it has willingly entered

<PAGE>   33

                                      -28-

                  into this agreement not to compete and is willing and able to
                  compete in other geographical areas not prohibited by this
                  Section 8.8.

         (b)      Each of the Seller and the Shareholders agrees that in
                  addition to the application of the provisions set forth in
                  Article 11, a breach or violation of this covenant not to
                  compete shall entitle the Purchaser and UTI, as a matter of
                  right, to an injunction issued by any court of competent
                  jurisdiction, restraining any further or continued breach or
                  violation of this covenant. Such right to an injunction shall
                  be cumulative and in addition to, and not in lieu of, any
                  other remedies to which the Purchaser or UTI may show itself
                  justly entitled. Further, each of the Seller and the
                  Shareholders agrees that during any period in which it is in
                  breach of this covenant not to compete, the Noncompetition
                  Period applicable to such Seller or Shareholder who is in
                  breach of this covenant shall be extended for the amount of
                  time that it is in breach hereof.

         (c)      Each of the Seller and the Shareholders agrees, severally and
                  not jointly, that for the Noncompetition Period it will not,
                  either directly or indirectly, (i) solicit for employment, or
                  allow any corporation or business entity controlled directly
                  or indirectly by or affiliated with the Seller or any such
                  Shareholder to solicit for employment, any Person that at that
                  time is, or at any time during the 12 month period immediately
                  preceding the Closing Date was, an employee, consultant or
                  agent of the Seller, the Purchaser, UTI or any of their
                  Affiliates (except that this shall not prohibit reasonable and
                  customary general solicitations of employment through the
                  media) or (ii) make known to any Person that is engaged in the
                  contract land drilling business in the Non-Competition Area or
                  executive recruiting or search firms that have clients engaged
                  in such business, the names of any Person that at that time
                  is, or at any time during the 12-month period immediately
                  preceding the Closing Date was, an employee, consultant or
                  agent of the Purchaser, the Seller or any of their Affiliates
                  relating to the Purchased Business.

         (d)      Notwithstanding anything contained herein to the contrary, the
                  existence of any claim or cause of action of the Seller
                  against the Purchaser or UTI, whether predicated on this
                  Agreement or otherwise, shall not constitute a defense to the
                  enforcement by the Purchaser of the covenants of the Seller
                  and the Shareholders contained in this Section 8.8.

         (e)      The Parties agree that the limitations contained in this
                  Section 8.8 with respect to geographic area, duration and
                  scope of activity are reasonable. However, if any court shall
                  determine that the geographic area, duration or scope of
                  activity of any restriction contained in this Section 8.8 is
                  unenforceable, it is the intention of the Parties that such
                  restrictive covenant set forth herein shall not thereby be
                  terminated but shall be deemed amended to the extent required
                  to render it valid and enforceable.

<PAGE>   34
                                      -29-

8.9      UPDATE OF SCHEDULES

         From the date hereof through and including the Closing Date, the Seller
may correct or update any of the Schedules. Any such correction or update shall
be made by actual delivery of an amended Schedule, marked to show changes (the
"AMENDED SCHEDULE"), which Amended Schedule shall replace the original Schedule
hereto. The Purchaser shall be given a reasonable opportunity to review any
Amended Schedule prior to Closing and shall have the right to postpone the
Closing for up to two Business Days to review any Amended Schedule delivered on
or immediately before the Closing Date. The Purchaser shall have the right to
terminate this Agreement at any time prior to the Closing if it is not
satisfied, acting reasonably, with any information contained in any Amended
Schedule.

                                   ARTICLE 9
                              CONDITIONS OF CLOSING

9.1      CONDITIONS OF CLOSING IN FAVOUR OF PURCHASER

         The sale and purchase of the Purchased Assets is subject to the
following terms and conditions for the exclusive benefit of the Purchaser, to be
performed or fulfilled at or prior to the Time of Closing:

         (a)      CLOSING DELIVERIES. The Seller shall have delivered to the
                  Purchaser the documents required to be delivered pursuant to
                  Section 10.2;

         (b)      REPRESENTATIONS AND WARRANTIES. The representation and
                  warranties of the Seller contained in this Agreement shall be
                  true and correct in all material respects at the Time of
                  Closing with the same force and effect as if such
                  representations and warranties were made at and as of such
                  time, and a certificate of the Seller, dated the Closing Date
                  to that effect shall have been delivered to the Purchaser,
                  such certificate to be in form and substance satisfactory to
                  the Purchaser, acting reasonably;

         (c)      COVENANTS. All of the terms, covenants and conditions of this
                  Agreement to be complied with or performed by the Seller at or
                  before the Time of Closing shall have been complied with or
                  performed in all material respects, and a certificate of the
                  Seller dated the Closing Date to that effect shall have been
                  delivered to the Purchaser, such certificate to be in form and
                  substance satisfactory to the Purchaser, acting reasonably;

         (d)      REGULATORY CONSENTS. There shall have been obtained from all
                  appropriate federal, provincial, municipal or other
                  governmental or administrative bodies such licences, permits,
                  consents, approvals, certificates, registrations and
                  authorizations as are required to be obtained by the Seller to
                  permit the change of ownership of the Purchased Assets
                  contemplated hereby, including, without limitation, those
                  described in Part 1 of Schedule 11, in each case in form and
                  substance satisfactory to the Purchaser, acting reasonably;

<PAGE>   35

                                      -30-

         (e)      CONTRACTUAL CONSENTS. The Seller shall have given or obtained
                  the notices, consents and approvals described in Part 2 of
                  Schedule 11, in each case in form and substance satisfactory
                  to the Purchaser, acting reasonably;

         (f)      NO ACTION OR PROCEEDING. No legal or regulatory action or
                  proceeding shall be pending or threatened by any Person to
                  enjoin, restrict or prohibit the purchase and sale of the
                  Purchased Assets contemplated hereby;

         (g)      NO MATERIAL DAMAGE. No material damage or physical alteration
                  to the whole or any material part of the Purchased Assets or
                  the Purchased Business, which would materially affect the
                  value of the Purchased Assets or the Purchased Business, shall
                  have occurred between the date hereof and the Time of Closing;

         (h)      NO MATERIAL ADVERSE CHANGE. There shall have been no material
                  adverse changes in the condition (financial or otherwise), of
                  the assets, Liabilities, operations, earnings, business or
                  prospects of the Purchased Business since the date of the most
                  recent Financial Statements;

         (i)      NO ENCUMBRANCES. The Seller shall have provided for the
                  discharge of the Encumbrances listed in Part 2 of Schedule 12
                  to the satisfaction of the Purchaser, acting reasonably;

         (j)      CONTINUED OPERATION. During the period from the date hereof to
                  the Time of Closing, the Seller shall have operated the
                  Purchased Business in a proper and prudent manner in
                  accordance with generally accepted industry practices;

         (k)      LEGAL OPINION. The Seller shall have delivered to the
                  Purchaser a favourable opinion of counsel to the Seller in the
                  form annexed hereto as Schedule 18;

         (l)      DUE DILIGENCE. The Purchaser shall have completed, within 14
                  days following execution of this Agreement by the Parties,
                  satisfactory due diligence regarding the Purchased Assets, the
                  results of which are in all respects satisfactory to the
                  Purchaser in its sole discretion;

         (m)      BOARD APPROVAL. UTI shall have obtained, within fourteen days
                  following execution of this Agreement by the Parties, the
                  approval of its board of directors for the matters set out
                  herein; and

         (n)      COMPLETE TRANSACTION. This Agreement constitutes one part of a
                  three part transaction, and accordingly shall not be binding
                  unless the related transactions contemplated by the agreements
                  listed in Schedule 20 are closed concurrent with the Closing
                  of the transactions contemplated by this Agreement.

         If any of the conditions contained in this Section 9.1 shall not be
performed or fulfilled at or prior to the Time of Closing to the sole
satisfaction of the Purchaser, acting reasonably, the Purchaser may, by notice
to the Seller, terminate this Agreement, provided that the Purchaser may also
bring an action pursuant to Article 11 against the Seller and/or the
Shareholders for damages suffered by the Purchaser where the non-performance or
non-fulfillment of the relevant

<PAGE>   36

                                      -31-

condition is a result of a breach of covenant, representation or warranty by the
Seller. Any such condition may be waived in whole or in part by the Purchaser
without prejudice to any claims it may have for breach of covenant,
representation or warranty.

9.2      CONDITIONS OF CLOSING IN FAVOUR OF SELLER

         The sale and purchase of the Purchased Assets is subject to the
following terms and conditions for the exclusive benefit of the Seller, to be
performed or fulfilled at or prior to the Time of Closing:

         (a)      CLOSING DELIVERIES. The Purchaser shall have delivered to the
                  Seller the Purchase Price and documents required to be
                  delivered pursuant to Section 10.3;

         (b)      REPRESENTATIONS AND WARRANTIES. The representations and
                  warranties of the Purchaser and UTI contained in this
                  Agreement shall be true and correct in all material respects
                  at the Time of Closing with the same force and effect as if
                  such representations and warranties were made at and as of
                  such time, and a certificate of each of the Purchaser and UTI,
                  dated the Closing Date, to that effect shall have been
                  delivered to the Seller each such certificate to be in form
                  and substance satisfactory to the Seller, acting reasonably;

         (c)      COVENANTS. All of the terms, covenants and conditions of this
                  Agreement to be complied with or performed by the Purchaser
                  and UTI at or before the Time of Closing shall have been
                  complied with or performed in all material respects, and a
                  certificate of each of the Purchaser and UTI, dated the
                  Closing Date, to that effect shall have been delivered to the
                  Seller, each such certificate to be in form and substance
                  satisfactory to the Seller, acting reasonably;

         (d)      REGULATORY CONSENTS. There shall have been obtained from all
                  appropriate federal, provincial, municipal or other
                  governmental or administrative bodies such licences, permits,
                  consents, approvals, certificates, registrations and
                  authorizations as are required to be obtained by the Purchaser
                  to permit the change of ownership of the Purchased Assets
                  contemplated hereby, including those described in Part I of
                  Schedule 11, in each case in form and substance satisfactory
                  to the Seller, acting reasonably;

         (e)      NO ACTION OR PROCEEDING. No legal or regulatory action or
                  proceeding shall be pending or threatened by any person to
                  enjoin, restrict or prohibit the purchase and sale of the
                  Purchased Assets contemplated hereby;

         (f)      LEGAL OPINIONS. The Purchaser and UTI shall have delivered to
                  the Seller favourable opinions of counsel to the Purchaser and
                  UTI in the form annexed hereto as Schedule 19;

         (g)      APPROVALS. The Seller shall have obtained, within five
                  Business Days following execution of this Agreement, the
                  approval of its board of directors and of its shareholders for
                  the matters set out herein; and

<PAGE>   37

                                      -32-

         (h)      COMPLETE TRANSACTION. This Agreement constitutes one part of a
                  three part transaction, and accordingly shall not be binding
                  unless the related transactions contemplated by the agreements
                  listed in Schedule 20 are closed concurrent with the Closing
                  of the transactions contemplated by this Agreement.

         If any of the conditions contained in this Section 9.2 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Seller acting reasonably, the Seller may, by notice to the Purchaser and
UTI, terminate this Agreement, provided that the Seller may also bring an action
pursuant to Article 11 against the Purchaser and/or UTI for damages suffered by
the Seller where the non-performance or non-fulfillment of the relevant
condition is as a result of a breach of covenant, representation or warranty by
the Purchaser and UTI. Any such condition may be waived in whole or in part by
the Seller without prejudice to any claims it may be have for breach of
covenant, representation or warranty.

                                   ARTICLE 10
                       CLOSING AND TRANSFER OF POSSESSION

10.1     PLACE OF CLOSING

         The Closing shall take place at the Time of Closing at the offices of
Macleod Dixon in Calgary, Alberta.

10.2     CLOSING DELIVERIES BY SELLER

         At the Closing the Seller shall deliver to the Purchaser:

         (a)      an executed counterpart of the Bill of Sale plus any other
                  deeds, conveyances, bills of sale, assurances, transfers,
                  assignments and any other documentation necessary or
                  reasonably required to transfer the Purchased Assets to the
                  Purchaser with a good and marketable title, free and clear of
                  all Encumbrances whatsoever except for Permitted Encumbrances.

         (b)      a certificate of corporate status and an officer's
                  certificate, certified by a senior officer of the Seller as of
                  the Closing Date, which certificate shall include copies of
                  its constating documents and by-laws and of the resolution
                  authorizing the execution, delivery and performance by the
                  Seller of this Agreement and any documents to be provided by
                  it pursuant to the provisions hereof;

         (c)      a receipt for the Purchase Price;

         (d)      the certificates and other documents required to be delivered
                  pursuant to Section 9.1; and

         (e)      all such other documents relevant to the closing of the
                  transactions contemplated hereby as the Purchaser, acting
                  reasonably, may request.

<PAGE>   38

                                      -33-

10.3     CLOSING DELIVERIES BY PURCHASER

         At the Closing the Purchaser shall deliver to the Seller:

         (a)      the Purchase Price by bank draft or wire transfer;

         (b)      an executed counterpart of the Bill of Sale;

         (c)      certificates of corporate status and officers' certificates,
                  certified by a senior officer of each of the Purchaser and of
                  UTI as of the Closing Date, which certificates shall include
                  copies of constating documents and by-laws and of the
                  resolution authorizing the execution, delivery and performance
                  by the Purchaser and UTI of this Agreement and any documents
                  to be provided by them pursuant to the provisions hereof;

         (d)      the certificates and other documents required to be delivered
                  pursuant to Section 9.2; and

         (e)      all such other documents relevant to the closing of the
                  transactions contemplated hereby as the Seller, acting
                  reasonably, may request.

10.4     FURTHER ASSURANCES

         From and after the Closing Date, each Party to this Agreement covenants
and agrees that it will at all times after the Closing Date, at the expense of
the requesting Party, promptly execute and deliver all such documents,
including, without limitation, all such additional conveyances, transfers,
consents and other assurances and do all such other acts and things as any other
Party, acting reasonably, may from time to time request be executed or done in
order to better evidence or perfect or effectuate any provision of this
Agreement or of any agreement or other document executed pursuant to this
Agreement or any of the respective obligations intended to be created hereby or
thereby.

10.5     TRANSFER OF POSSESSION AND TITLE

         Subject to compliance with the terms and conditions hereof, the
transfer of possession of and title to the Purchased Assets shall be deemed to
take effect as at the Time of Closing.

10.6     RISK OF LOSS

         From the date hereof up to the Time of Closing, the Purchased Assets
shall be and remain at the risk of the Seller. If, prior to the Time of Closing,
all or any part of the Purchased Assets that are necessary to carry on the
Purchased Business as currently conducted are destroyed or damaged by fire or
any other casualty or shall be appropriated, expropriated or seized by
governmental or other lawful authority, the Purchaser may elect to complete the
purchase without reduction of the Purchase Price, in which event all proceeds of
insurance or compensation for expropriation or seizure shall be paid to the
Purchaser at the Time of Closing and all right and claim of the Seller to any
such amounts not paid by the Closing Date shall be assigned at the Time of
Closing to the Purchaser.

<PAGE>   39

                                      -34-

                                   ARTICLE 11
                                 INDEMNIFICATION

11.1     INDEMNIFICATION BY SELLER AND SHAREHOLDERS

         The Seller and the Shareholders jointly and severally agree to
indemnify and save harmless the Purchaser from all Losses suffered or incurred
by the Purchaser as a result of or arising directly or indirectly out of or in
connection with:

         (a)      any breach by the Seller of or any inaccuracy of any
                  representation or warranty of the Seller contained in this
                  Agreement or in any agreement, certificate or other document
                  delivered pursuant hereto;

         (b)      any breach or non-performance by the Seller of any covenant to
                  be performed by it that is contained in this Agreement or in
                  any agreement, certificate or other document delivered
                  pursuant hereto;

         (c)      the Excluded Liabilities or the Excluded Assets; and

         (d)      the operation of the Purchased Business, or the ownership of
                  the Purchased Assets, prior to the Time of Closing.

11.2     INDEMNIFICATION BY PURCHASER AND UTI

         The Purchaser and UTI jointly and severally agree to indemnify and save
harmless the Seller from all Losses suffered or incurred by the Seller as a
result of or arising directly or indirectly out of or in connection with:

         (a)      any breach by the Purchaser or UTI of or any inaccuracy of any
                  representation or warranty contained in this Agreement or in
                  any agreement, instrument, certificate or other document
                  delivered pursuant hereto;

         (b)      any breach or non-performance by the Purchaser or UTI of any
                  covenant to be performed by it that is contained in this
                  Agreement or in any agreement, certificate or other document
                  delivered pursuant hereto;

         (c)      the Assumed Obligations;

         (d)      any GST which becomes payable by the Seller in respect of the
                  sale of the Purchased Assets other than as a result of a
                  misrepresentation or breach by the Seller; and

         (e)      the operation of the Purchased Business, or the ownership of
                  the Purchased Assets, on or after the Time of Closing.

<PAGE>   40

                                      -35-

11.3     LIMITATIONS ON INDEMNIFICATION

         (a)      Notwithstanding the foregoing provisions of this Article, but
                  subject to (c) below, no Party shall be liable under the
                  indemnifications in Section 11.1 or 11.2 unless and until the
                  aggregate amount of liability thereunder exceeds Cdn. $25,000.

         (b)      Notwithstanding the foregoing provisions of this Article, but
                  subject to (c) below, the aggregate liability of the Seller
                  and the Shareholders to the Purchaser under the
                  indemnification provisions of this Agreement, and the
                  aggregate liability of the Purchaser and UTI to the Seller
                  under the indemnification provisions of this Agreement, shall
                  be limited in each case to an amount equal to the Purchase
                  Price.

         (c)      The limitations on the liability of any Party under this
                  Agreement shall only apply to the extent that there is not any
                  fraud or wilful misconduct on the part of such Party, and all
                  such limits on the liability of any Party shall lapse and be
                  of no force and effect if and to the extent that there is or
                  has been fraud or wilful misconduct on the part of such Party
                  in connection with the matter with respect to which any claim
                  against such Party is made hereunder.

         (d)      All indemnification to which an indemnified Party may be
                  entitled pursuant to the provisions of this Article shall be
                  net of any insurance coverage paid to the indemnified Party
                  with respect thereto, and shall exclude any claims arising
                  from the indemnified Party's gross negligence or willful
                  misconduct after the Closing.

         (e)      Except for those covenants contained in Article 8 and which
                  are intended to survive Closing as provided in Article 8, no
                  Party shall be liable under the indemnifications in Section
                  11.1 or 11.2 unless written notice of the claim as provided
                  for in Section 11.4 is given by the Indemnified Party (as
                  defined in Section 11.4) to the Indemnifying Party (as defined
                  in Section 11.4), within 18 months following the Closing.

11.4     NOTICE OF CLAIM

         In the event that a Party (the "INDEMNIFIED PARTY") shall become aware
of any claim, proceeding or other matter (a "CLAIM") in respect of which any
other Party (the "INDEMNIFYING PARTY") agreed to indemnify the Indemnified Party
pursuant to this Agreement, the Indemnified Party shall promptly give written
notice thereof to the Indemnifying Party. Such notice shall specify whether the
Claim arises as a result of a claim by a Person against the Indemnified Party (a
"THIRD PARTY CLAIM") or whether the Claim does not so arise (a "DIRECT CLAIM"),
and shall also specify with reasonable particularity (to the extent that the
information is available):

         (a)      the factual basis for the Claim; and

         (b)      the amount of the Claim, if known.

         If, through the fault of the Indemnified Party, the Indemnifying Party
does not receive notice of any Claim in time to effectively contest the
determination of any liability susceptible of being contested, the Indemnifying
Party shall be entitled to set off against the amount claimed by the Indemnified
Party the amount of any Losses incurred by the Indemnifying Party resulting from

<PAGE>   41

                                      -36-

the Indemnified Party's failure to give such notice on a timely basis.

         In the event that a Shareholder shall, within 18 months following the
Closing, become aware of a Claim arising from a breach of any representation and
warranty contained in Section 5.6 (Title to Purchased Assets), Section 5.10
(Material Contracts) or 5.19 (Environmental Matters), such Shareholder severally
agrees to give prompt written notice thereof to the Purchaser and UTI. This
obligation is in addition to any disclosure obligation which such Shareholder
may owe to the Purchaser in such Shareholder's capacity as an employee of the
Purchaser or otherwise.

11.5     DIRECT CLAIMS

         With respect to any Direct Claim, following receipt of notice from the
Indemnified Party of the Claim, the Indemnifying Party shall have 30 days to
make such investigation of the Claim as is considered necessary or desirable.
For the purpose of such investigation, the Indemnified Party shall make
available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the affected Claim, together with all such
other information as the Indemnifying Party may reasonably request. If both
affected Parties agree at or prior to the expiration of such 30 day period (or
any mutually agreed upon extension thereof) to the validity and amount of such
Claim, the Indemnifying Party shall immediately pay to the Indemnified Party the
full agreed upon amount of the Claim, failing which the matter shall be referred
to binding arbitration in such manner as the Parties may agree or shall be
determined by a court of competent jurisdiction.

11.6     THIRD PARTY CLAIMS

         With respect to any Third Party Claim, the Indemnifying Party shall
have the right, at its expense, to participate in or assume control of the
negotiation, settlement or defence of the Claim and, in such event, the
Indemnifying Party shall reimburse the Indemnified Party for all the Indemnified
Party's out-of-pocket expenses as a result of such participation or assumption.
If the Indemnifying Party elects to assume such control, the Indemnified Party
shall have the right to participate in the negotiation, settlement or defence of
such Third Party Claim and to retain counsel to act on its behalf, provided that
the fees and disbursements of such counsel shall be paid by the Indemnified
Party unless the Indemnifying Party consents to the retention of such counsel or
unless the named parties to any action or proceeding include both the
Indemnifying Party and the Indemnified Party and a representation of both the
Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to the actual or potential differing interests between them
(such as the availability of different defenses). If the Indemnifying Party,
having elected to assume such control, thereafter fails to defend the Third
Party Claim within a reasonable time, the Indemnified Party shall be entitled to
assume such control and the Indemnifying Party shall be bound by the results
obtained by the Indemnified Party with respect to such Third Party Claim. If any
Party Claim is of a nature such that the Indemnified Party is required by
applicable law to make a payment to any Person (a "THIRD PARTY") with respect to
the Third Party Claim before the completion of settlement negotiations or
related legal proceedings, the Indemnified Party may make such payment and the
Indemnifying Party shall, forthwith after demand by the Indemnified Party,
reimburse the Indemnified Party

<PAGE>   42

                                      -37-

for such payment. If the amount of any liability of the Indemnified Party under
the Third Party Claim in respect of which such a payment was made, as finally
determined, is less than the amount that was paid by the Indemnifying Party to
the Indemnified Party, the Indemnified Party shall, forthwith after receipt of
the difference from the Third Party, pay the amount of such difference to the
Indemnifying Party.

11.7     SETTLEMENT OF THIRD PARTY CLAIMS

         If the Indemnifying Party fails to promptly assume control of the
defence of any Third Party Claim, the Indemnified Party shall have the exclusive
right to contest, settle or pay the amount claimed. Whether or not the
Indemnifying Party assumes control of the negotiation, settlement or defence of
any Third Party Claim, the Indemnifying Party shall not settle any Third Party
Claim without the written consent of the Indemnified Party, which consent shall
not be unreasonably withheld or delayed; provided, however, that the liability
of the Indemnifying Party shall be limited to the proposed settlement amount if
any such consent is not obtained for any reason.

11.8     CO-OPERATION

         The Indemnified Party and the Indemnifying Party shall co-operate fully
with each other with respect to Third Party Claims, and shall keep each other
fully advised with respect thereto (including supplying copies of all relevant
documentation promptly as it becomes available).

11.9     SCOPE

         The provisions of this Article 11 shall apply to any Claim for breach
of any covenant, representation, warranty or other provision of this Agreement
or any agreement, certificate or other document delivered pursuant to this
Agreement (other than a claim for specific performance or injunctive relief)
with the intent that all such Claims shall be subject to the limitations and
other provisions contained in this Article 11.

                                   ARTICLE 12
                       TERMINATION; REMEDIES; LIMITATIONS

12.1     TERMINATION AGREEMENT

         This Agreement and the transactions contemplated hereby may be
terminated at any time prior to the Closing:

         (a)      by the mutual consent of the Seller, the Purchaser and UTI; or

         (b)      if the Closing has not occurred by May 17, 2000, then

                  (i)      by the Purchaser if any condition specified in
                           Section 9.1 has not been satisfied on or before such
                           date, and shall not have been waived by the
                           Purchaser, or

<PAGE>   43

                                      -38-

                  (ii)     by the Seller if any condition specified in Section
                           9.2 has not been satisfied on or before such date,
                           and shall not have been waived by the Seller;

                  provided, in each case, that the failure to consummate the
                  transactions contemplated hereby on or before such date did
                  not result from the failure by the Party or Parties seeking
                  termination of this Agreement to fulfill any undertaking or
                  commitment provided for herein on the part of such Party or
                  Parties that is required to be fulfilled on or prior to
                  Closing.

12.2     EFFECT OF TERMINATION

         Without limiting any Party's respective rights, Liabilities and
remedies hereunder, in the event of termination of this Agreement by the
Purchaser or the Seller pursuant to Subsection 12.1(b), written notice thereof
shall forthwith be given by the terminating Party to the other Party or Parties
hereto, and this Agreement shall thereupon terminate.

                                   ARTICLE 13
                                  MISCELLANEOUS

13.1     NOTICES

         (a)      Any notice or other communication required or permitted to be
                  given hereunder shall be in writing and shall be delivered in
                  person, transmitted by telecopy or similar means of recorded
                  electronic communication or sent by registered mail, charges
                  prepaid, addressed as follows:

                  (i)      if to the Seller or the Shareholders:

                           584022 ALBERTA LTD.
                           Hanover Place, Suite 1450
                           101-6th Avenue S.W.
                           Calgary, Alberta  T2P 3P4

                           Attention:  T.V. Dumont
                           Fax No.:  (403) 262-2497

                  with a copy to:

                           FIELD ATKINSON PERRATON
                           1900 First Canadian Centre
                           350 - 7th Avenue S.W.
                           Calgary, Alberta T2P 3N9

                           Attention:  Mr. Brian Yaworski
                           Fax No:  (403) 264-7084

<PAGE>   44

                                      -39-

                  (ii)     if to the Purchaser or UTI:

                           PHELPS DRILLING LTD. or UTI ENERGY CORP.
                           c/o UTI Energy Corp.
                           16800 Greenspoint Park, Suite 225N
                           Houston, Texas  77060

                           Attention:  Chief Executive Officer
                           Fax No.:  (281) 875-9145

                  with a copy to:

                           MACLEOD DIXON
                           3700 Canterra Tower
                           400 - 3rd Avenue S.W.
                           Calgary, Alberta
                           T2P 4H7

                           Attention:  Mr. Richard P. Borden
                           Fax No.  (403) 264-5973

         (b)      Any such notice or other communication shall be deemed to have
                  been given and received on the day on which it was delivered
                  or transmitted (or, if such day is not a Business Day, on the
                  next following Business Day) or, if mailed, on the third
                  Business Day following the date of mailing; provided, however,
                  that if at the time of mailing or within three Business Days
                  thereafter there is or occurs a labour dispute or other event
                  that might reasonably be expected to disrupt the delivery of
                  documents by mail, any notice or other communication hereunder
                  shall be delivered or transmitted by means of recorded
                  electronic communication as aforesaid.

         (c)      A Party may at any time change its address for service from
                  time to time by giving notice to the other Party in accordance
                  with this Section 13.1

13.2     CONSULTATION

         Prior to the Closing and except as required by any applicable law or
any regulatory or stock exchange requirement, no Party shall issue any press
release or make any public announcement without the prior written consent of the
other Parties, which consent shall not be unreasonably withheld or delayed. Upon
the Closing, the Parties shall consult with each other before issuing any press
release or making any other public announcement with respect to this Agreement
or the transactions contemplated hereby.

<PAGE>   45

                                      -40-

13.3     DISCLOSURE

         Prior to any press release or public announcement of the transaction
contemplated hereby pursuant to Section 13.2, no Party shall disclose this
Agreement or any aspects of the transaction contemplated hereby except to its
board of directors, its senior management, its legal, accounting, financial or
other professional advisors or its lenders, all on a "need to know basis", or as
otherwise may be required by any applicable law or any regulatory authority or
stock exchange having jurisdiction.

13.4     BEST EFFORTS

         The Parties acknowledge and agree that, for all purposes of this
Agreement, an obligation on the part of one Party to use its best efforts to
obtain from any Person any waiver, consent, approval, permit, licence or other
document shall not require such Party to make any payment to such Person for the
purpose of procuring the same, other than payments for amounts due and payable
to such Person, payments for incidental expenses incurred by such Person and
payments required by any applicable law or regulation.

13.5     COUNTERPARTS

         This Agreement may be executed in counterparts, each of which shall
constitute an original and all of which taken together shall constitute one and
the same instrument.

         IN WITNESS WHEREOF this Agreement has been executed by the Parties as
of the date first above written.

                                                584022 ALBERTA LTD.

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

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

<PAGE>   46

                                      -41-

                                           SHAREHOLDERS

-------------------------------            -------------------------------------
Witness                                    THEODORE V. DUMONT

--------------------------------           ------------------------------------
Witness                                    DONALD E. NAKONECHNY

--------------------------------           ------------------------------------
Witness                                    ARTHUR G. HIBBARD

--------------------------------           ------------------------------------
Witness                                    GORDON E. VAN EATON

--------------------------------           ------------------------------------
Witness                                    JOHN W. MILLER

                                           PHELPS DRILLING LTD.

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

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

                                           UTI ENERGY CORP.

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

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

<PAGE>   47

                                   SCHEDULE 9

                          ALLOCATION OF PURCHASE PRICE

Class 41 Tangible Depreciable Property
                                                       -------------------

<PAGE>   48

                                   SCHEDULE 21

                ASSIGNMENT, BILL OF SALE AND ASSUMPTION AGREEMENT

         This Assignment, Bill of Sale and Assumption Agreement (the
"Agreement") is dated effective the _____day of April, 2000, and made between
584022 Alberta Ltd. (the "Seller") and Phelps Drilling Ltd. (the "Purchaser").

         WHEREAS the Seller, the shareholders of the Seller, the Purchaser and
UTI Energy Corp. entered into an Asset Purchase Agreement dated as of the
_______ day of March, 2000 (the "Purchase and Sale Agreement") providing, among
other things, for the sale by the Seller to the Purchaser of the Purchased
Assets;

         AND WHEREAS pursuant to the Purchase and Sale Agreement, the Seller and
the Purchaser are required to execute and deliver this Agreement in connection
with the consummation of the transactions contemplated by the Purchase and Sale
Agreement;

         AND WHEREAS any capitalized term used but not defined in this Agreement
shall have the meaning ascribed to such term in the Purchase and Sale Agreement;

         NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1.       ASSIGNMENT OF ASSETS. The Seller hereby assigns, transfers, conveys,
         sells and delivers to the Purchaser, and the Purchaser hereby accepts,
         all right, title and interest of the Seller in and to the Purchased
         Assets, TO HAVE AND TO HOLD the Purchased Assets unto the Purchaser
         forever, together with all rights belonging or pertaining thereto.

2.       FURTHER ASSURANCES RE PURCHASED ASSETS. The Seller hereby covenants to
         execute and deliver to the Purchaser all such other and further
         instruments of assignment and transfer, and all such notices, releases
         and other documents that would more fully and specifically assign and
         transfer to and vest in the Purchaser the title and interest of the
         Seller in and to all of the Purchased Assets hereby assigned and
         transferred, or intended to be assigned and transferred free and clear
         of all Encumbrances whatsoever except for Permitted Encumbrances. To
         the extent that, with respect of any of the Purchased Assets, no
         assignment document other than this Agreement is executed, the parties
         intend that this Agreement constitutes the conveyance, transfer and
         assignment of such Purchased Assets.

3.       ASSUMPTION OF OBLIGATIONS. The Purchaser hereby assumes, in accordance
         with the terms of the Purchase and Sale Agreement, the Assumed
         Obligations.

4.       FURTHER ASSURANCES RE ASSUMED OBLIGATIONS. The Purchaser hereby
         covenants to execute and deliver to the Purchaser all such other and
         further instruments of assumption, and all such notices, releases and
         other documents that would more fully and specifically assume all of
         the Assumed Obligations.

<PAGE>   49
                                      -2-

5.       GOVERNING LAW. This Agreement and the rights and obligations of the
         Seller and the Purchaser hereunder shall be governed by, interpreted
         and enforced in accordance with the laws of the Province of Alberta
         without giving effect to principles thereof relating to conflicts of
         law rules that would direct application of laws of another
         jurisdiction, except to the extent that it is mandatory that the law of
         another jurisdiction shall apply.

6.       CONFLICT AND INCONSISTENCY, NO MERGER. To the extent any conflict or
         inconsistency exists between the provisions of this Agreement and the
         Purchase and Sale Agreement, the provisions of the Purchase and Sale
         Agreement shall govern. The terms and provisions of the Purchase and
         Sale Agreement (including, without limitation, the representations,
         warranties and covenants therein) shall not merge, be extinguished or
         otherwise affected by the delivery and execution of this Agreement or
         any other document delivered pursuant to Section 2 of this Agreement or
         Section 10.2 or Section 10.3 of the Purchase and Sale Agreement.

7.       BINDING EFFECT. This Agreement shall be binding upon and shall enure to
         the benefit of the parties hereto and their respective successors and
         assigns.

8.       COPIES. This Agreement may be executed in counterpart, each of which
         shall be deemed an original and which shall constitute one and the same
         instrument.

         IN WITNESS WHEREOF, the Seller and the Purchaser have executed this
Agreement as of the day and year first above written.

                                               584022 ALBERTA LTD.

                                               BY:
                                                  -----------------------------

                                               BY:
                                                  -----------------------------

                                               PHELPS DRILLING LTD.

                                               BY:
                                                  -----------------------------

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