Document:

AMENDMENT #3
                                     to the
                  Purchase of Equipment and Services Agreement
                                     Between
                        Sprint/United Management Company
                                       And
                          Hybrid Networks, Incorporated

     This is the Third  Amendment  ("Amendment  3") to the Purchase of Equipment
and Services Agreement  ("Agreement")  dated May 1, 2000, between  Sprint/United
Management  Company  ("Sprint"),  a Kansas  corporation,  with  offices  at 2330
Shawnee Mission  Parkway,  Westwood,  Kansas 66205,  and Hybrid  Networks,  Inc.
("Hybrid"), a Delaware corporation, with its principal offices at 6409 Guadalupe
Mines Road, San Jose, CA 95120.

     This  Amendment 3 shall be effective (the  "Effective  Date") as of July 3,
2001.

     In order to facilitate the parties' working relationship, Sprint and Hybrid
have agreed to certain  modifications of the Agreement and the December 22, 2000
Amendment to the Agreement  ("Amendment  1") and the March 31, 2001 Amendment to
the Agreement ("Amendment 2"), as follows:

1. Terms of Purchase and Sale.

     (a)  Sprint  has  submitted  a  binding   purchase  order  (Purchase  Order
#21-0002442223,  dated July 24, 2001) to Hybrid in the amount of $1,590,400  for
the  purchase  of Base  Station  (head end)  Equipment.  The  parties  expressly
acknowledge  and agree that,  notwithstanding  anything in the  Agreement to the
contrary, (i) such Base Station Equipment will not be subject to the Substantial
Completion  and  Final  Acceptance  testing  referenced  in  Section  11 of  the
Agreement, nor to any testing under Section 7 or Schedule 1.21 of the Agreement,
and (ii)  Hybrid  will have the right  (notwithstanding  Section  23.2(b) of the
Agreement)  to  invoice  Sprint  for the full  purchase  price for all such Base
Station  Equipment  upon the date the Base  Station  Equipment  is  shipped.  In
accordance with Section 23.2(a) of the Agreement, Hybrid's invoice for such Base
Station  Equipment  will be due and  payable  in full by Sprint 30 days from the
date of shipment.  The foregoing will not be deemed to waive any warranties made
by Hybrid in the Agreement or any other rights Sprint has under the Agreement.

     (b)  Notwithstanding  anything  to  the  contrary  in  Section  2.6  of the
Agreement,  on the first business day of each calendar month beginning with July
6, 2001,  Sprint will deliver 12-month rolling forecasts to Hybrid for purchases
of Modems (as defined  herein.) The quantity  indicated for the first 90 days of
each such  forecast  will be a binding  commitment  to purchase  by Sprint.  For
purposes  hereof,  "Modems"  means  P-modems  (WBR-60-231  or 231B) and ThruWAVE
modems.

     (c) Sprint  will  submit an initial  12-month  rolling  forecast  of 96,000
Modems  for the period  from July 1, 2001  through  June 30,  2002 that will (i)
include 24,000 P-modems to be

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purchased  at a price of $335 per  P-modem  during the first 90 days  covered by
such forecast and (ii) have the following shipment dates:

--------------------------------------------------------------------------------
Shipment Date                                        Quantity of P-modems
--------------------------------------------------------------------------------
by 7/15/01                                           8,000
--------------------------------------------------------------------------------
8/01/01                                              8,000
--------------------------------------------------------------------------------
9/04/01                                              8,000
--------------------------------------------------------------------------------

     (d) After Sprint purchases from Hybrid, at a price of $335 per P-modem, the
lesser of (i) 37,000 P-modems or (ii) Hybrid's remaining  available inventory of
P-modems,  then Sprint may meet its future  purchase  commitments  for Modems by
acquiring ThruWAVE modems at $335 per modem. Hybrid may, but is not required to,
make more than 24,000  P-modems  available  to Sprint.  Sprint will  continue to
receive  shipping  priority and Most Favored  Customer  Status,  as set forth in
Sections 3.5 and 21.2 of the  Agreement,  respectively,  in connection  with any
Modem purchases.

     (e)  Notwithstanding  anything to the  contrary  in Section  23.2(d) of the
Agreement,  Sprint agrees to wire transfer the aggregate purchase price for each
shipment of Modems within 3 business  days after  receipt of the  shipment,  but
only if Hybrid  provides an accurate and complete pro forma invoice to Sprint at
least 5 business days before shipment.

     (f)  Hybrid  shall use  commercially  reasonable  efforts  to  achieve  the
shipment  dates set forth in subsection (c) above.  However,  Hybrid will not be
deemed to be in breach of the Agreement if Hybrid  supplies the Modems  pursuant
to the lead times  governed  by Section  2.7 of the  Agreement.  If there is any
breach of the  Agreement by Hybrid,  in any material or  non-material  way, then
Sprint may,  in its sole  discretion  and in  addition to any other  remedies in
equity or at law, accelerate its purchase of P-modems,  which were included in a
purchase order submitted by Sprint to Hybrid, at any time, by giving 1-day prior
written notice to Hybrid.  Any cure period  otherwise  applicable to such breach
does not apply.

     (g) The material breach provision in Section 17.2 of the Agreement  changes
from "135 days" to "30 days" with respect to CPE (customer  premises  equipment)
until such time as Hybrid publicly reports a net worth of $10,000,000,  at which
time the number of days will revert back to "135 days".

2. Warrant. Concurrently with the execution of this Amendment 3 by both parties,
Hybrid will execute the warrant, attached hereto as Exhibit A, pursuant to which
Hybrid will grant  Sprint the right to acquire 25 shares of Hybrid  common stock
for each P-modem  purchased by Sprint pursuant to the terms of this Amendment 3,
up to the first 24,000 P-modems purchased by Sprint after July 1, 2001.

3.  Defined  Terms.   Unless  otherwise  specified  in  this  Amendment  3,  all
capitalized  terms  used  herein  shall  have  the  meanings  set  forth  in the
Agreement.

4. Termination of Letter  Agreement.  The Letter  Agreement  between the parties
dated July 3, 2001 is hereby terminated and is null and void.

                                       2
<PAGE>

5.  Controlling  Terms.  In the event of a  conflict  between  the terms of this
Amendment 3 and the terms of  Amendment  1,  Amendment 2 or the  Agreement,  the
terms of this Amendment 3 shall control.

6.  Effect of  Amendment.  All  other  terms and  conditions  of the  Agreement,
including  Amendment 1 and Amendment 2 remain unchanged.  Except as specifically
stated  herein,  nothing in this  Amendment 3 waives either party's rights under
the Agreement or Amendment 1 or Amendment 2.

IN  WITNESS  WHEREOF,  each  party  has  executed  this  Amendment  3 by a  duly
authorized  representative.   The  parties  acknowledge  that  they  have  read,
understood and agreed to the terms of this Amendment 3.

SPRINT/UNITED MANAGEMENT COMPANY          HYBRID NETWORKS, INC.

By: /s/ Brett A. Krause                   By: /s/ Judson W. Goldsmith
    -------------------------------           ----------------------------------
Name: Brett A. Krause                     Name: Judson W. Goldsmith

Title: AVP Business Operations            Title: Vice President of Finance

Dated: 8/8/01                             Dated: 8/15/01

                                       3
<PAGE>

                                    EXHIBIT A

THIS WARRANT AND THE SECURITIES  ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN  REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  THE "ACT",  OR
UNDER  THE  SECURITIES  LAWS OF ANY  STATE.  THESE  SECURITIES  ARE  SUBJECT  TO
RESTRICTIONS ON TRANSFERABILITY  AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO  REGISTRATION  OR EXEMPTION  THEREFROM AND IN  ACCORDANCE  WITH SECTION 6 AND
SECTION 11(b) HEREOF.  THE ISSUE OF THESE  SECURITIES  MAY REQUIRE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE  SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED  TRANSFER OR RESALE IS IN  COMPLIANCE  WITH THE ACT AND ANY  APPLICABLE
STATE SECURITIES LAWS.

                           WARRANT FOR THE PURCHASE OF
                             SHARES OF COMMON STOCK
                                       OF
                              HYBRID NETWORKS, INC.
                            (a Delaware corporation)

                            DATED AS OF JULY 31,2001

          VOID AFTER 5:00 P.M., CENTRAL STANDARD TIME, ON JULY 31, 2006

     HYBRID  NETWORKS,  INC., a Delaware  corporation  (the  "Company"),  hereby
certifies  that Sprint  Corporation,  a Kansas  corporation  (together  with its
Affiliates  (as defined  below),  "Sprint"),  is  entitled to purchase  from the
Company,  at the time, in the amounts and during the period described in Section
3 below,  that  number  of  shares of  Common  Stock of the  Company  determined
pursuant to the provisions of Section 2 below, at the Purchase Price (as defined
below) then in effect.

1. Definitions.

     "Affiliate"  means any entity that,  directly or indirectly  through one or
more  intermediaries,  is controlled by, or is under common control with, Sprint
Corporation.

     "Common  Stock"  means the  Company's  common  stock,  par value $0.001 per
share, and stock of any other class of the equity of the Company into which such
shares may hereafter have been changed.

     "Conversion  Price"  means the price  per share for which  Common  Stock is
issuable upon the conversion or exchange of Convertible  Securities,  determined
by dividing (i) the total amount,  if any, received or receivable by the Company
as  consideration  for the  issuance of such  Convertible  Securities,  plus the
minimum aggregate amount of additional consideration payable to the Company upon
the conversion or exchange of such Convertible Securities, by (ii) the total

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maximum  number of  shares  of Common  Stock  issuable  upon the  conversion  or
exchange of all such Convertible Securities.

     "Convertible  Securities"  mean any securities  issued by the Company or an
affiliate  of the  Company  which  are  convertible  into or  exchangeable  for,
directly or indirectly, shares of Common Stock.

     "Exercise  Term" means any time  between the date hereof and July 31, 2006,
subject to the vesting schedule set forth in Section 2 hereof.

     "Market  Price" of a share of Common Stock on any day means (i) the average
closing price of a share of Common Stock for the twenty (20) consecutive trading
days preceding such day on the principal national  securities  exchange on which
the shares of Common  Stock are listed or admitted  to  trading,  or (ii) if not
listed or admitted to trading on any national securities  exchange,  the average
of the last reported  sales price for the twenty (20)  consecutive  trading days
preceding such day on the Nasdaq National Market,  or (iii) if not traded on the
Nasdaq National  Market,  the average of the highest reported bid and the lowest
reported  asked  prices on each of the  twenty  (20)  consecutive  trading  days
preceding such day in the  over-the-counter  market as furnished by the National
Association of Securities  Dealers,  Inc. automated quotation system, or (iv) if
such firm is not then  engaged in the  business of  reporting  such  prices,  as
furnished  by any similar  firm then  engaged in such  business  selected by the
Company or, if there is no such firm, as furnished by any member of the National
Association  of  Securities  Dealers,  Inc.  selected  by the Company or, if the
shares of Common  Stock are not publicly  traded,  the Market Price for such day
shall be equal to the price per share of the  Company's  Common  Stock (or other
capital stock of the Company  convertible into Common Stock at a 1:1 ratio) sold
in the Company's latest bona fide round of equity financing.

     "New Security" shall have the meaning set forth in Section 4(b) hereof.

     "Purchase Price" shall have the meaning set forth in Section 3(b) hereof.

     "Registered Holder" means; Sprint Corporation, together with its successors
and permitted assigns.

     "Strike Price" means the price per share for which Common Stock is issuable
upon the exercise of any rights,  options or warrants for the purchase of Common
Stock,  determined  by  dividing  (i) the  total  amount,  if any,  received  or
receivable by the Company as consideration for the grant of such rights, options
or  warrants,  plus the minimum  aggregate  amount of  additional  consideration
payable to the Company upon the exercise of such rights, options or warrants, by
(ii) the total  maximum  number of shares  of  Common  Stock  issuable  upon the
exercise of such rights, options or warrants.

     "Warrant Stock" means the shares of Common Stock or New Securities acquired
or acquirable  upon exercise of this Warrant,  any shares of Common Stock or New
Securities  issued  as (or  issuable  upon the  conversion  or  exercise  of any
warrant,  right  or  other  security  that is  issued  as) a  dividend  or other
distribution with respect to, or in exchange for, or in replacement

                                       5
<PAGE>

of, such shares of Common Stock,  or any other  interest in the Company that has
been or may be acquired upon exercise of this Warrant.

2. Vesting Schedule.

     A total of 600,000  shares of Common Stock shall be available  for purchase
hereunder  in  accordance  with the  following  schedule,  and such shares shall
remain available for purchase during the Exercise Term:

     (a) 200,000  shares of Common  Stock shall vest and become  exercisable  on
August 1, 2001;

     (b) 200,000  shares of Common  Stock shall vest and become  exercisable  on
September 5, 2001; and

     (c) 200,000  shares of Common  Stock shall vest and become  exercisable  on
September 30, 2001.

3. Exercise of Warrant.

     (a) In addition to the Registered  Holder's rights pursuant to Section 3(e)
hereof,  this Warrant may be  exercised at any time during the Exercise  Term by
the  Registered  Holder  in  whole  or in  part,  and  from  time  to  time,  by
surrendering  this Warrant,  with the purchase form appended hereto as Exhibit A
duly executed by such Registered Holder, at the principal office of the Company,
or at such other office or agency as the Company may  designate,  accompanied by
payment in full of the Purchase Price payable in respect of the number of shares
of Warrant Stock purchased upon such exercise. The Purchase Price may be paid by
a check drawn on the bank account of the  Registered  Holder or the surrender of
shares  pursuant to the Net Issue Election  provisions set forth in Section 3(e)
hereof.

     (b) As used herein,  the term "Purchase  Price," with respect to a share of
Warrant Stock, shall mean $1.20.

     (c) Each  exercise of this  Warrant  shall be deemed to have been  effected
immediately  prior to the close of  business  on the day on which  this  Warrant
shall have been surrendered to the Company as provided in subsection 3(a) above.
At  such  time,  the  person(s)  or  entity(ies)  in  whose  name or  names  any
certificates  for Warrant Stock shall be issuable upon such exercise as provided
in subsection 3(d) below shall be deemed to have become the holder or holders of
record of the Warrant Stock represented by such certificates.

     (d) As soon as practicable  after each exercise of this Warrant in whole or
in part,  and in any event within ten (10) days  thereafter,  the Company at its
expense will cause to be issued in the name of, and delivered to, the Registered
Holder, or, subject to the terms and conditions hereof, as the Registered Holder
(upon payment by the  Registered  Holder of any applicable  transfer  taxes) may
direct:

                                       6
<PAGE>

          (i) a  certificate  or  certificates  for the number of full shares of
     Warrant Stock to which such  Registered  Holder shall be entitled upon such
     exercise  plus, in lieu of any  fractional  share to which such  Registered
     Holder would otherwise be entitled,  cash in an amount determined  pursuant
     to Section 5 hereof; and

          (ii) in case such  exercise is in part only, a new warrant or warrants
     (dated the date hereof) of like tenor, with a new Warrant Schedule attached
     thereto  reflecting  the number of shares of Warrant  Stock equal  (without
     giving  effect to any  adjustment  therein)  to the  number of such  shares
     reflected in the Warrant Schedule  attached as Exhibit B to this Warrant on
     the date of such exercise minus the number of such shares  purchased by the
     Registered Holder upon such exercise as provided in subsection 3(a) above.

     (e) Net issue Election. The Registered Holder may elect to receive, without
the payment by the  Registered  Holder of any additional  consideration,  shares
equal to the value of this  Warrant or any portion  hereof by the  surrender  of
this Warrant or such portion to the Company,  with the net issue election notice
(attached  hereto as Exhibit  B) duly  executed,  at the office of the  Company.
Thereupon, the Company shall issue to the Registered Holder such number of fully
paid and nonassessable shares of Common Stock as is computed using the following
formula:

                                   X = Y(A-B)
                                       ------
                                         A

where

     X  = the number of shares to be issued to the Registered  Holder pursuant
          to this Section 3(e).

     Y  = the number of shares covered by this Warrant in respect of which the
          net issue election is made pursuant to this Section 3(e).

     A  = the  Market  Price of one share of Common  Stock at the time the net
          issue election is made pursuant to this Section 3(e).

     B  = the Purchase  Price in effect under this Warrant at the time the net
          issue election is made pursuant to this Section 3(e).

The Board of Directors of the Company  shall  promptly  respond in writing to an
inquiry by the  Registered  Holder as to the Market Price of one share of Common
Stock.

                                       7
<PAGE>

4. Adjustments.

     (a)  Adjustment  of Purchase  Price  Amount and Number of Shares Upon Stock
Splits. Dividends,  Distributions and Combinations. In case the Company shall at
any time subdivide its outstanding  shares of Common Stock into a greater number
of shares or issue a stock  dividend  or make a  distribution  with  respect  to
outstanding  shares of Common Stock or Convertible  Securities payable in Common
Stock or in  Convertible  Securities  which are  convertible  with no additional
consideration  into shares of Common Stock, the Purchase Price for all shares of
Warrant Stock issuable  immediately  prior to such subdivision or stock dividend
or distribution shall be proportionately  reduced (treating for such purpose any
such shares of Convertible Securities outstanding or payable as being the number
of shares of Common  Stock  issuable  upon their  conversion)  and the number of
shares of Warrant Stock proportionately  increased; and conversely,  in case the
shares of Common Stock of the Company shall be combined into a smaller number of
shares, the Purchase Price for all shares of Warrant Stock issuable  immediately
prior to such combination shall be  proportionately  increased and the number of
shares of Warrant Stock proportionately reduced.

     (b)   Reorganization   or   Reclassification.   In  case  of  any   capital
reorganization,  or of any reclassification of the capital stock, of the Company
(other  than a change  in par value or from par value to no par value or from no
par value to par value),  or any  consolidation  or merger of the  Company  with
another  corporation or other entity, or the sale of all or substantially all of
the  assets of the  Company  which  shall be  effected  in a manner by which the
holders of Common Stock shall be entitled  (either  directly or upon  subsequent
liquidation)  to equity  securities  with  respect to or in exchange  for Common
Stock,   then  this   Warrant   shall,   after  such   capital   reorganization,
reclassification  of  capital  stock,  merger  or sale of  assets,  entitle  the
Registered  Holder  hereof to purchase the kind and number of shares of stock or
other  securities  of  the  Company,  or  of  the  entity  resulting  from  such
consolidation  (the  "Surviving  Entity") to which the Registered  Holder hereof
would have been  entitled  if it had held the  Common  Stock  issuable  upon the
exercise   hereof   immediately   prior   to   such   capital    reorganization,
reclassification of capital stock,  consolidation,  merger or sale of assets. If
the  holders  of Common  Stock  shall be  entitled  to cash,  cash  equivalents,
nonequity  securities or other  property of the Company or the Surviving  Entity
("Property")  with respect to or in exchange for Common Stock, then this Warrant
shall,  after such capital  reorganization,  reclassification  of capital stock,
merger or sale of assets,  entitle the Registered  Holder hereof to purchase the
kind of issued and  outstanding  common  stock or other  equity  security of the
Company or the Surviving Entity ("New  Security"),  as the case may be, which is
most similar to the Common Stock,  which shall be in an amount equal to a number
of shares of the New  Security  having a Market Price on the  effective  date of
such capital  reorganization,  reclassification of capital stock, merger or sale
of assets  equal to the  Market  Price on such  effective  date of the  Property
issued  per share of the Common  Stock.  The  Company  shall not effect any such
capital reorganization, reclassification of capital stock, consolidation, merger
or sale of assets unless prior to the consummation  thereof the Surviving Entity
(if other than the Company)  resulting  therefrom or the corporation  purchasing
such assets shall, by written  instrument  executed and mailed to the Registered
Holder  hereof at the last address of such  Registered  Holder  appearing on the
books of the Company,  (i) assume the  obligation to deliver to such  Registered
Holder such shares of stock,  securities  or assets as, in  accordance  with the
foregoing  provisions,  such Registered Holder may be entitled to purchase,  and
(ii)  agree to be bound by all the terms of this  Warrant.  Furthermore,  in the
case of a capital

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<PAGE>

reorganization, reclassification of capital stock, consolidation, merger or sale
of assets which entitles the Registered  Holder to purchase New Securities under
this  Warrant,  the  Purchase  Price for all  shares of Warrant  Stock  issuable
immediately prior to such capital  reorganization,  reclassification  of capital
stock,  consolidation,  merger or sale of assets  shall be adjusted to equal the
price  determined by dividing the Purchase  Price for each such share of Warrant
Stock  immediately  prior to such capital  reorganization,  reclassification  of
capital stock,  consolidation,  merger or sale of assets by the number of shares
of New Securities the Registered Holder is entitled to receive for each share of
Common Stock hereunder.

     (c) Change in Strike Price, Conversion Price or Conversion Rate. If (A) the
Strike Price for any right,  option or warrant for the purchase of Common Stock,
(B) the Conversion  Price of any  Convertible  Security or (C) the rate at which
any Convertible Securities are convertible into or exchangeable for Common Stock
changes at any time  (other  than by reason of  provisions  designed  to protect
against  dilution),  the Purchase Price for all shares of Warrant Stock issuable
immediately  prior to the time such  event  occurs  shall be  readjusted  to the
Purchase  Price  which  would have been in effect at such time had such  rights,
options,  warrants or Convertible Securities still outstanding provided for such
changed Strike Price,  Conversion  Price or conversion rate, as the case may be,
at the time such  rights,  options or warrants  were  initially  granted or such
Convertible Securities were initially issued.

     (d)  Consideration  for  Stock.  In case  any  shares  of  Common  Stock or
Convertible  Securities  or any rights,  options or warrants to purchase  Common
Stock  or  Convertible  Securities  shall  be  issued  or  sold  for  cash,  the
consideration received therefor shall be deemed to be the amount received by the
Company  therefor,  without  deducting any expenses incurred or any underwriting
commissions  or  concessions  paid  or  allowed  by the  Company  in  connection
therewith.  In case any shares of Common Stock or Convertible  Securities or any
rights,  options or warrants to purchase Common Stock or Convertible  Securities
shall be issued or sold in whole or in part for  consideration  other than cash,
the amount of such consideration shall be deemed to be the fair value thereof as
determined  by the Board of  Directors  of the Company,  without  deducting  any
expenses incurred or any underwriting commissions or concessions paid or allowed
by the Company in connection  therewith.  In the event of any  consolidation  or
merger of the Company in which the Company is not the surviving  corporation  or
in the  event  of any  sale of all or  substantially  all of the  assets  of the
Company for stock or other securities of any  corporation,  the Company shall be
deemed  to have  issued a number  of  shares  of its  Common  Stock for stock or
securities of the other corporation computed on the basis of the actual exchange
ratio on which the transaction was predicated and for consideration equal to the
fair market value on the date of such transaction of such stock or securities of
the other  corporation  as  determined by the Board of Directors of the Company,
and if any such calculation  results in adjustment of the Purchase Price for all
shares of Warrant Stock then issuable hereunder, the determination of the number
of shares of Common Stock  issuable  upon  exercise of this Warrant  immediately
prior to such merger,  conversion or sale, for purposes of Section 4(b) shall be
made after giving effect to such adjustment of the Purchase Price.

     (e) Computation of Adjustments.  Upon each  computation of an adjustment in
the  Purchase  Price for any share of  Warrant  Stock  issuable  hereunder,  the
Purchase  Price for all such  shares of Warrant  Stock  shall be computed to the
nearest cent (i.e.,  fractions of .5 of a cent, or greater,  shall be rounded to
the highest cent) and the shares which may be purchased upon

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<PAGE>

exercise of this Warrant  shall be  calculated to the nearest whole share (i.e.,
fractions of one half of a share, or greater,  shall be treated as being a whole
share). No such adjustment shall be made, however, if the change in the Purchase
Price for any such share of Warrant Stock would be less than $.0l per share, but
any such lesser  adjustment shall be made at the time and together with the next
subsequent  adjustment  which,  together with any adjustments  carried  forward,
shall amount to $.01 per share or more.

     (f) Certain Prohibited Adjustments.  Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction which would cause
an  adjustment  of the  Purchase  Price to less than the par value of the Common
Stock.

     (g) Notice of  Adjustment  of Purchase  Price,  Number of Shares.  Upon any
adjustment  of  the  Purchase  Price  or  number  of  shares  of  Warrant  Stock
purchasable hereunder, the Company shall promptly give written notice thereof to
the  Registered  Holder,  setting  forth in  reasonable  detail  the  method  of
calculation and the facts upon which such calculation is based.

5. Fractional Shares.

     The  Company  shall not be  required  to issue  fractional  shares upon the
exercise of this Warrant.  If the  Registered  Holder would be entitled upon the
exercise of any rights  evidenced  hereby to receive a fractional  interest in a
share of Common Stock,  the Company shall,  upon such  exercise,  pay in lieu of
such fractional interest an amount in cash equal to the value of such fractional
interest,  calculated based upon the Market Price as of the date this Warrant is
exercised.

6. Limitation on Sales; Registration.

     (a) The  Company  will use its best  efforts  to amend  that  certain  1999
Amended and Restated Investor Rights  Agreement,  dated as of September 9, 1999,
among the Company, Sprint and the other parties thereto (the "Rights Agreement")
to  include  the  Warrant  Stock  in the  definition  of the  term  "Registrable
Securities" as that term is defined in the Rights Agreement. At all times during
the Exercise Term that the Rights Agreement is not so amended, the provisions of
Sections  6(c) through  6(f) hereof shall remain in full force and effect.  Once
the Rights  Agreement has been amended  pursuant to this Section 6(a),  Sections
6(c) through 6(f) shall terminate and have no further force and effect.

     (b) The Registered Holder  acknowledges that the Warrant Stock has not been
registered  under  the  Securities  Act of 1933,  as now in  force or  hereafter
amended,  or any  successor  legislation  (the  "Act"),  and agrees not to sell,
pledge, distribute, offer for sale, transfer or otherwise dispose of any Warrant
Stock in the absence of (i) an effective registration statement under the Act as
to such Warrant Stock, or (ii) an exemption from such registration. This warrant
and the Warrant  Stock shall be  imprinted  with a legend in  substantially  the
following form:

     THIS SECURITY HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED,  OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD,  PLEDGED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE

                                       10
<PAGE>

REGISTRATION  THEREOF  UNDER SUCH ACT OR LAW  PURSUANT TO RULE 144 AND ANY STATE
EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL REASONABLY  SATISFACTORY TO
THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

     (c) Piggyback Registrations.

          (i) Right to Piggyback.  Whenever the Company proposes to register any
of its securities  under the Act, the Company will give prompt written notice to
the  Registered  Holder of its  intention to effect such  registration  and will
include in such registration all Warrant Stock with respect to which the Company
has received a written request from the Registered  Holder for inclusion therein
within 15 days after the receipt of the Company's notice.  The Company will pay,
or cause to be paid, the registration  expenses of the Registered  Holder in all
piggyback registrations.

          (ii)  Underwritten   Offering.  If  a  piggyback  registration  is  an
underwritten  primary or secondary  registration on behalf of the Company and/or
other  holders of the Common  Stock,  and the managing  underwriters  advise the
Company in writing  that in their  opinion the number of shares  requested to be
included in such registration  (including the Warrant Stock and any other shares
of Common Stock held by holders with registration rights, collectively, with the
Registered  Holder,  the "Holders") exceeds the number which can be sold in such
offering  without  materially and adversely  affecting the  marketability of the
offering, the Company will promptly furnish the Registered Holder with a copy of
the underwriter's  opinion and may, by written notice to the Registered  Holder,
include in such  registration  (i) first, the securities the Company proposes to
sell,  and (ii)  second,  the Common  Stock  requested  to be  included  in such
registration  pro rata  among the  Holders  on the basis of the number of shares
owned by each such Holder.

          (iii) Underwriting Agreement. In any registration in which the Warrant
Stock  is to be  included,  the  Registered  Holder  shall  be a  party  to  the
underwriting agreement entered into by the Company in connection therewith,  and
the  representations and warranties by, and the other agreements on the part of,
the Company and for the  benefit of the  underwriters  shall also be made to and
for the benefit of the Registered Holder.

          (iv)  Documents,  Etc.  The Company  shall  provide to the  Registered
Holder any and all documents,  statements,  opinions and forms as the Registered
Holder  reasonably  deems necessary for the Registered  Holder to participate in
any piggyback  registrations  and to facilitate  the  disposition of the Warrant
Stock covered by such registration  pursuant to the terms and conditions of this
Agreement and the applicable securities laws.

          (v) Indemnification. In the event of any piggyback registration of any
Warrant Stock under the Securities Act, and in connection with any  registration
statement or any other disclosure  document  pursuant to which securities of the
Company are sold,  the Company  will,  and hereby does,  jointly and  severally,
indemnify and hold harmless the  Registered  Holder,  its  directors,  officers,
fiduciaries,  and agents (each, a "Covered Person") against any losses,  claims,
damages or liabilities, joint or several, to which such Covered Person may be or
become

                                       11
<PAGE>

subject under the Act, any other  securities or other laws of any  jurisdiction,
common law or otherwise,  insofar as such losses, claims, damages or liabilities
(or actions or  proceedings  in respect  thereof) arise out of or are based upon
(1) any untrue  statement  or alleged  untrue  statement  of any  material  fact
contained or incorporated by reference in any  registration  statement under the
Act, any preliminary  prospectus or final prospectus  included  therein,  or any
amendment  or  supplement  thereto,  or any document  incorporated  by reference
therein, or any other such disclosure  document,  or (2) any omission or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to make the statement therein not misleading,  and will reimburse such
Covered Person for any legal or any other expenses  incurred in connection  with
investigating or defending any such loss, claim,  damage,  liability,  action or
proceeding;  provided,  however the  Company  shall not be liable to any Covered
Person  in any  such  case to the  extent  that any such  loss,  claim,  damage,
liability,  action  or  proceeding  arises  out of or is  based  upon an  untrue
statement or alleged  untrue  statement or omission or alleged  omission made in
such registration statement, any such preliminary prospectus,  final prospectus,
amendment or supplement,  any document  incorporated  by reference or other such
disclosure  document in reliance upon and in conformity with written information
furnished to the Company  through an  instrument  duly  executed by such Covered
Person specifically stating that it is for use in the preparation thereof.

     (d) Demand  Registration.  On one  occasion at any time during the Exercise
Period,  upon the demand of the Registered Holder, the Company shall, as soon as
practicable thereafter but in no event later than 45 days following such demand,
file a registration  statement  covering such amount of the Warrant Stock as the
Registered Holder requests (a "Sprint  Registration  Statement") and, after such
filing,   the  Company  shall  use  reasonable  efforts  to  cause  such  Sprint
Registration  Statement to become  effective  and to maintain the  effectiveness
thereof for a period of one (1) year, or until such earlier date as such Warrant
Stock may be transferred  without  registration under the Act; provided that (i)
the effectiveness of the Sprint Registration Statement may be terminated earlier
if and to the extent that all of the Warrant  Stock shall have been  disposed of
by the holder or holders  thereof and (ii) the Company's  obligation  under this
Section 6(b) to file a Sprint Registration  Statement as soon as practicable and
to use reasonable efforts to cause such Sprint Registration  Statement to become
effective  shall be  suspended  in the event and during  such  period as certain
circumstances  exist  (such  circumstances  being  hereinafter  referred to as a
"Suspension  Event")  which  would make it  impractical  or  inadvisable  in the
Company's good faith opinion to file a Sprint Registration  Statement,  but such
suspension  shall only continue until (y) such event is no longer  continuing or
(z) ninety (90) days after the  commencement  of such  suspension,  whichever is
earlier.  A Suspension Event shall include,  but shall not be limited to, (1) an
underwritten  primary  offering  by the  Company  if the  Company  is advised in
writing by the managing  underwriter of such underwritten  offering that, in its
good  faith  judgment,  the  sale  of  securities  under a  Sprint  Registration
Statement would interfere with the successful  marketing of the securities to be
offered under such primary offering;  (2) pending  negotiations  relating to, or
existence  of  any  other  event,  fact  or  circumstance  which  would  require
disclosure by the Company in the Sprint  Registration  Statement of  information
regarding the Company or its business,  business plans,  financial  condition or
results of operations  which has not previously been disclosed by the Company in
a report  filed under the  Securities  Exchange Act of 1934,  as amended,  or by
public  announcement;  or (3) if the holder or holders of Warrant Stock on whose
behalf the Sprint Registration Statement is being prepared fails to

                                       12
<PAGE>

cooperate  with the Company and to furnish to the  Company  all  information  in
connection  with the  preparation  of the Sprint  Registration  Statement as the
Company may reasonably request.

     (e) All fees and expenses  incurred by the Company in  connection  with the
performance  of its  obligation  to  register  the  Warrant  Stock  pursuant  to
subsection  6(b)  shall  be  borne by the  Company;  provided  that any fees and
expenses  of the  holder or  holders  thereof  or of its or their  counsel,  and
transfer taxes  applicable to the sale of such Warrant Stock,  shall be borne by
such holder or holders.

     (f) The  Registered  Holder  agrees,  if  requested  by the  Company or the
representative of the underwriters  underwriting an offering of Common Stock (or
other  securities  of the Company)  from time to time,  not to sell or otherwise
transfer  or dispose of any  Warrant  Stock then held by the  Registered  Holder
during  such  reasonable  period of time  following  the  effective  date of any
registration  statement  of the  Company  (other  than the  Sprint  Registration
Statement)  filed  under the Act for the period of time with  respect to which a
majority of the  executive  officers of the Company  agree not to sell shares of
Common Stock (or other  securities of the Company).  Such agreement  shall be in
writing in a form  satisfactory  to the  Company  and such  representative.  The
Company may impose stop-transfer  instructions with respect to the Warrant Stock
subject to the foregoing restriction until the end of such period.

7. Representations.

     The  Registered  Holder  hereby  represents  and warrants to the Company as
follows. The Registered Holder is a sophisticated investor having such knowledge
and experience in business and investment  matters that the Registered Holder is
capable of protecting the Registered  Holder's own interests in connection  with
the acquisition,  exercise or disposition of this Warrant. The Registered Holder
is aware that this Warrant and the Warrant  Stock are being,  or will be, issued
to the Registered Holder in reliance upon the Registered Holder's representation
in this Section 7 and that such securities are restricted securities that cannot
be publicly sold except in certain prescribed situations.  The Registered Holder
is aware of the  provisions  of Rule 144  promulgated  under  the Act and of the
conditions under which sales may be made thereunder.  The Registered  Holder has
received  such  information  about the Company as the  Registered  Holder  deems
reasonable,  has had the  opportunity to ask questions and receive  answers from
the Company  with  respect to its  business,  assets,  prospects  and  financial
condition and has verified any answers the  Registered  Holder has received from
the Company with independent  third parties to the extent the Registered  Holder
deems necessary.  The Registered Holder of this Warrant,  by acceptance  hereof,
acknowledges  this  Warrant  and the Warrant  Stock to be issued  upon  exercise
hereof or  conversion  thereof  are being  acquired  solely  for the  Registered
Holder's  own  account  and  not as a  nominee  for  any  other  party,  and for
investment,  and that the  Registered  Holder will not offer,  sell or otherwise
dispose of this Warrant or any Warrant Stock to be issued upon  exercise  hereof
or  conversion  thereof  except  under  circumstances  that will not result in a
violation of the Act or any state securities laws.

8. Notices of Record Date, Etc.

     In the event that:

                                       13
<PAGE>

     (a)  the Company  shall set a record date for the purpose of  entitling  or
          enabling the holders of its Common Stock (or other stock or securities
          at the time  deliverable upon the exercise of this Warrant) to receive
          any  dividend  or  other  distribution,  or to  receive  any  right to
          subscribe  for or  purchase  any  shares  of stock of any class or any
          other securities, or to receive any other right, or

     (b)  there shall  occur any  capital  reorganization  of the  Company,  any
          reclassification   of  the   capital   stock  of  the   Company,   any
          consolidation   or  merger  of  the  Company   with  or  into  another
          corporation, or any transfer of all or substantially all of the assets
          of the Company, or

     (c)  there  shall  occur  any   voluntary   or   involuntary   dissolution,
          liquidation or winding-up of the Company,

then,  and in each such case, the Company will mail or cause to be mailed to the
Registered Holder a notice  specifying,  as the case may be, (i) the record date
for the purpose of such dividend,  distribution or right, and stating the amount
and character of such dividend,  distribution or right,  (ii) the effective date
of such reorganization,  reclassification,  consolidation, merger or transfer or
(iii) the date of such dissolution,  liquidation or winding-up is to take place,
and also specifying, if applicable, the date and time as of which the holders of
record  of  Common  Stock  (or  such  other  stock  or  securities  at the  time
deliverable  upon the  exercise of this  Warrant)  shall be entitled to exchange
their shares of Common Stock (or such other stock or securities)  for securities
or  other  property  deliverable  upon  such  reorganization,  reclassification,
consolidation,  merger, transfer,  dissolution,  liquidation or winding-up. Such
notice  shall be  mailed  at least ten (10)  days  prior to the  record  date or
effective date for the event specified in such notice.

9. Reservation of Stock.

     The  Company  will at all times  reserve  and keep  available,  solely  for
issuance and delivery upon the exercise of this Warrant,  such shares of Warrant
Stock and other stock,  securities  and property,  as from time to time shall be
issuable upon the exercise of this Warrant.

10. Replacement of Warrants.

     Upon  receipt of  evidence  reasonably  satisfactory  to the Company of the
loss, theft, destruction or mutilation of this Warrant and (in the case of loss,
theft or  destruction)  upon delivery of an indemnity  agreement (with surety if
reasonably required) in an amount reasonably satisfactory to the Company, or (in
the case of mutilation)  upon surrender and  cancellation  of this Warrant,  the
Company will issue, in lieu thereof, a new Warrant of like tenor.

11. Transfers, Etc.

     (a) The Company will maintain a register containing the names and addresses
of the Registered Holders of this Warrant. The Registered Holder may change its,
his or her  address as shown on the warrant  register  by written  notice to the
Company requesting such change.

                                       14
<PAGE>

     (b) This Warrant shall not be  transferable  by the  Registered  Holder and
shall be exercisable only by the Registered  Holder;  provided that this Warrant
may be transferred to, and may be exercisable by, any company that directly,  or
indirectly  through one or more  intermediaries,  is controlled  by, or is under
common control with, the Registered Holder.

     (c) Until any transfer of this Warrant is made in the warrant register, the
Company may treat the  Registered  Holder of this Warrant as the absolute  owner
hereof for all  purposes;  provided,  however,  that if and when this Warrant is
properly  assigned in blank,  the Company  may (but shall not be  obligated  to)
treat  the  bearer  hereof  as the  absolute  owner  hereof  for  all  purposes,
notwithstanding any notice to the contrary.

12. Mailing of Notices, Etc.

     All notices and other  communications  in connection with the Warrant shall
be mailed by first-class  certified or registered mail, postage prepaid,  to the
address listed below for each party or to such other address as such party shall
provide to the other party hereto pursuant to written notice.

     If to the Registered Holder, addressed to:

          Sprint Corporation
          6450 Sprint Parkway
          Overland Park, KS 66251
          Attn. AVP, BWG Business Operations
          Fax: (913) 315-0760

     With a copy to:

          Sprint Corporation
          2330 Shawnee Mission Parkway
          Westwood, KS 66205
          Attn. Vice President & Corporate Secretary
          Fax: (913) 624-2256

     If to the Company, addressed to:

          Hybrid Networks, Inc.
          6409 Guadalupe Mines Road
          San Jose, CA 95120-5000
          Attn: Michael Greenbaum
          Fax: (408) 323-6470

13. No Rights as Stockholder.

     Until the exercise of this Warrant,  the Registered  Holder of this Warrant
shall not have or exercise any rights by virtue hereof as a  stockholder  of the
Company.

14. Change or Waiver.

                                       15
<PAGE>

     Any term of this Warrant may be changed or waived only by an  instrument in
writing signed by the party against which enforcement of the change or waiver is
sought.

15. Headings.

     The headings in this  Warrant are for purposes of reference  only and shall
not limit or otherwise affect the meaning of any provision of this Warrant.

16. Governing Law.

     This Warrant shall be governed by and construed in accordance with the laws
of the State of Kansas.

17. Quarterly Financial Statements.

     At any time during the  Exercise  Term that the Company is not  required to
file quarterly and annual  reports with the Securities and Exchange  Commission,
the Company shall, not later than sixty (60) days after the end of each calendar
quarter  during the  Exercise  Term,  provide  the  Registered  Holder  with the
following financial statements:  income statement,  balance sheet,  statement of
cash flows and capitalization table (the "Financial Information").

                                              HYBRID NETWORKS, INC.

Dated: August 15, 2001                        By: /s/ Judson W. Goldsmith
                                                  ------------------------------
                                              Name:  Judson W. Goldsmith
                                                    ----------------------------
                                              Title: Vice President of Finance
                                                     Chief Financial Officer

                                       16
<PAGE>

                                    EXHIBIT A

                                  PURCHASE FORM

To: Hybrid Networks, Inc.
    6409 Guadalupe Mines Road
    San Jose, CA 95 120-5000

     The  undersigned  pursuant  to the  provisions  set  forth in the  attached
Warrant,  hereby irrevocably elects to purchase ___________ shares of the Common
Stock (the "Common Stock") covered by such Warrant and herewith makes payment of
$______,  representing  the full purchase price for such shares at the price per
share provided for in such Warrant.

     The undersigned  understands and acknowledges the terms and restrictions on
the right to transfer  or dispose of the Common  Stock set forth in Section 6 of
the  attached  Warrant,  which  the  undersigned  has  carefully  reviewed.  The
undersigned  consents  to the  placing  of a legend on its  certificate  for the
Common Stock  referring to such  restrictions  and the placing of stop  transfer
orders until the Common Stock may be transferred in accordance with the terms of
such restrictions.

                                             By: __________________________
                                                 Name: ____________________
                                                 Title: ___________________

                                                 Dated: ___________________

                                       17
<PAGE>

                                    EXHIBIT B

                            Net Issue Election Notice

To: Hybrid Networks, Inc.

                                             Date: _____________________________

     The undersigned  hereby elects under Section 3(e) to surrender the right to
purchase  ________  shares  of  Common  Stock  pursuant  to  this  Warrant.  The
certificate(s)  for the shares  issuable upon such net issue  election  shall be
issued in the name of the undersigned or as otherwise indicated below.

                                             [INSERT NAME OF REGISTERED
                                             HOLDER]

                                             By: _______________________________
                                             Name: _____________________________
                                             Title: ____________________________

                                             Name for Registration:

                                             ___________________________________

                                             Mailing Address:

                                             ___________________________________
                                             ___________________________________
                                             ___________________________________
                                             ___________________________________<PAGE>
                                                                     Exhibit 4.1

                       Dated as of March 8, 2002

                         VALE OVERSEAS LIMITED,
                               AS COMPANY

                                  and

                      COMPANHIA VALE DO RIO DOCE,
                              AS GUARANTOR

                                  and

                          JPMORGAN CHASE BANK,
                               AS TRUSTEE

                               INDENTURE

                                            LINKLATERS
                                            1345 Avenue of the Americas
                                            19th Floor
                                            New York, NY 10105

                                            Telephone: (1-212) 424 9000
                                            Facsimile: (1-212) 424 9100

                                            Ref: PERR/SEYB

                                            LINKLATERS & ALLIANCE
                                            Linklaters is a
                                            member firm of Linklaters & Alliance
                                            a non-partnership association

<PAGE>
                                TABLE OF CONTENTS
<Table>
<Caption>
                                                                          PAGE

<S>    <C>                                                                <C>
  1    DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.............  1

       1.1    DEFINITIONS..................................................  1

       1.2    COMPLIANCE CERTIFICATES AND OPINIONS.........................  9

       1.3    FORM OF DOCUMENTS DELIVERED TO TRUSTEE....................... 10

       1.4    ACTS OF HOLDERS; RECORD DATES................................ 10

       1.5    NOTICES, ETC., TO TRUSTEE, COMPANY AND GUARANTOR............. 12

       1.6    NOTICE TO HOLDERS; WAIVER.................................... 13

       1.7    CONFLICT WITH TRUST INDENTURE ACT............................ 13

       1.8    EFFECT OF HEADINGS AND TABLE OF CONTENTS..................... 14

       1.9    SUCCESSORS AND ASSIGNS....................................... 14

       1.10   SEPARABILITY CLAUSE.......................................... 14

       1.11   BENEFITS OF INDENTURE........................................ 14

       1.12   GOVERNING LAW................................................ 14

       1.13   LEGAL HOLIDAYS............................................... 14

       1.14   CONSENT TO SERVICE; JURISDICTION............................. 14

       1.15   LANGUAGE OF NOTICES, ETC..................................... 15

  2    SECURITY FORMS...................................................... 15

       2.1    FORMS GENERALLY.............................................. 15

       2.2    FORM OF FACE OF SECURITY..................................... 16

       2.3    FORM OF REVERSE OF SECURITY.................................. 18

       2.4    FORM OF TRUSTEE'S CERTIFICATE OF  AUTHENTICATION............. 24

  3    THE SECURITIES...................................................... 25

       3.1    AMOUNT UNLIMITED; ISSUABLE IN SERIES......................... 25

       3.2    DENOMINATIONS................................................ 27

       3.3    EXECUTION, AUTHENTICATION, DELIVERY AND DATING............... 27

       3.4    REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.......... 29

       3.5    MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES............. 32

       3.6    PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED............... 32

       3.7    PERSONS DEEMED OWNERS........................................ 33

       3.8    CANCELLATION................................................. 34

       3.9    COMPUTATION OF INTEREST...................................... 34

       3.10   CUSIP OR "ISIN" NUMBERS...................................... 34

</Table>
                                      -i-
<PAGE>
<Table>
<Caption>
                                                                          PAGE

<S>    <C>                                                                <C>

  4    SATISFACTION AND DISCHARGE......................................... 34

       4.1    SATISFACTION AND DISCHARGE OF INDENTURE..................... 34

       4.2    APPLICATION OF TRUST MONEY.................................. 35

  5    REMEDIES........................................................... 36

       5.1    EVENTS OF DEFAULT........................................... 36

       5.2    ILLEGALITY EVENTS........................................... 37

       5.3    ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.......... 37

       5.4    COLLECTION OF INDEBTEDNESS AND SUITS FOR
              ENFORCEMENT BY TRUSTEE...................................... 39

       5.5    TRUSTEE MAY FILE PROOFS OF CLAIM............................ 39

       5.6    TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES. 40

       5.7    APPLICATION OF MONEY COLLECTED.............................. 40

       5.8    LIMITATION ON SUITS......................................... 40

       5.9    UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
              PREMIUM AND INTEREST........................................ 41

       5.10   RESTORATION OF RIGHTS AND REMEDIES.......................... 41

       5.11   RIGHTS AND REMEDIES CUMULATIVE.............................. 41

       5.12   DELAY OR OMISSION NOT WAIVER................................ 41

       5.13   CONTROL BY HOLDERS.......................................... 42

       5.14   WAIVER OF PAST DEFAULTS..................................... 42

       5.15   UNDERTAKING FOR COSTS....................................... 42

       5.16   WAIVER OF USURY, STAY OR EXTENSION LAWS..................... 42

  6    THE TRUSTEE........................................................ 43

       6.1    CERTAIN DUTIES AND RESPONSIBILITIES......................... 43

       6.2    NOTICE OF DEFAULT; POTENTIAL DEFAULT........................ 43

       6.3    CERTAIN RIGHTS OF TRUSTEE................................... 43

       6.4    NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES...... 45

       6.5    MAY HOLD SECURITIES......................................... 45

       6.6    MONEY HELD IN TRUST......................................... 45

       6.7    COMPENSATION AND REIMBURSEMENT.............................. 45

       6.8    CONFLICTING INTERESTS....................................... 46

       6.9    CORPORATE TRUSTEE REQUIRED; ELIGIBILITY..................... 46

       6.10   RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR........... 46

       6.11   ACCEPTANCE OF APPOINTMENT BY SUCCESSOR...................... 48

       6.12   MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. 49

       6.13   PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY........... 49

       6.14   APPOINTMENT OF AUTHENTICATING AGENT......................... 49

</Table>
                                      -ii-
<PAGE>
<Table>
<Caption>

<S>    <C>                                                                <C>

       6.15   APPOINTMENT OF LUXEMBOURG TRANSFER AGENT................... 51

       6.16   TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY.... 51

  7    HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY................. 51

       7.1    COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.. 51

       7.2    PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS..... 51

       7.3    REPORTS BY TRUSTEE......................................... 52

  8    CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.............. 52

       8.1    COMPANY AND GUARANTOR MAY CONSOLIDATE, ETC.
              ONLY ON CERTAIN TERMS...................................... 52

       8.2    SUCCESSOR SUBSTITUTED...................................... 53

       8.3    RIGHT TO REDEMPTION........................................ 53

  9    SUPPLEMENTAL INDENTURES........................................... 53

       9.1    SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS......... 53

       9.2    SUPPLEMENTAL INDENTURES OR WAIVER WITH CONSENT OF HOLDERS.. 55

       9.3    EXECUTION OF SUPPLEMENTAL INDENTURES....................... 56

       9.4    EFFECT OF SUPPLEMENTAL INDENTURES.......................... 56

       9.5    CONFORMITY WITH TRUST INDENTURE ACT........................ 56

       9.6    REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES......... 56

       9.7    EFFECT OF WAIVER........................................... 56

 10    COVENANTS......................................................... 57

       10.1   PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST................. 57

       10.2   MAINTENANCE OF OFFICE OR AGENCY............................ 57

       10.3   MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST............ 58

       10.4   STATEMENT BY OFFICERS AS TO DEFAULT........................ 59

       10.5   REPORTS BY COMPANY AND GUARANTOR........................... 59

       10.6   LIMITATION ON LIENS........................................ 59

       10.7   PAYMENT OF ADDITIONAL AMOUNTS.............................. 60

       10.8   INDEMNIFICATION OF JUDGMENT CURRENCY....................... 63

       10.9   FURTHER ACTS; PROTECTION OF COLLATERAL..................... 63

       10.10  NOTICE OF LATE PAYMENT..................................... 65

       10.11  SECURITIES HELD BY THE COMPANY............................. 65

       10.12  SECURITIES ISSUED OR OUTSTANDING........................... 65

       10.13  STATUS OF GUARANTY AND SECURITIES.......................... 65

       10.14  RATING..................................................... 65

       10.15  MAINTENANCE OF GOOD STANDING............................... 65

</Table>
                                     -iii-

<PAGE>
<Table>
<Caption>

<S>    <C>                                                                <C>

       10.16  MAINTENANCE OF PROPERTIES.................................. 65

       10.17  PAYMENT OF TAXES........................................... 66

       10.18  OWNERSHIP OF THE COMPANY AND PAYMENT OF EXPENSES........... 66

       10.19  FINANCIAL STATEMENTS AND REPORTS........................... 66

       10.20  NOTICE TO TRUSTEE.......................................... 66

       10.21  RESTRICTIONS ON THE COMPANY................................ 67

       10.22  RESTRICTIONS ON THE GUARANTOR.............................. 67

       10.23  CHANGE TO CONSTITUTIVE DOCUMENTS OF THE COMPANY............ 68

 11    REDEMPTION OF SECURITIES.......................................... 68

       11.1   RIGHT OF REDEMPTION........................................ 68

       11.2   NOTICE OF REDEMPTION....................................... 69

       11.3   DEPOSIT OF REDEMPTION PRICE................................ 69

       11.4   SECURITIES PAYABLE ON REDEMPTION DATE...................... 70

       11.5   SECURITIES REDEEMED IN PART................................ 70

 12    GUARANTY.......................................................... 70

       12.1   THE GUARANTY............................................... 70

       12.2   GUARANTY UNCONDITIONAL..................................... 71

       12.3   DISCHARGE; REINSTATEMENT................................... 71

       12.4   WAIVER BY THE GUARANTOR.................................... 71

       12.5   SUBROGATION AND CONTRIBUTION............................... 72

       12.6   STAY OF ACCELERATION....................................... 72

       12.7   EXECUTION AND DELIVERY OF GUARANTY......................... 72

</Table>

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

                                      -iv-

<PAGE>
INDENTURE, dated as of March 8, 2002 among VALE OVERSEAS LIMITED, a Cayman
exempted company incorporated with limited liability (herein called the
"COMPANY"), having its principal office at Walker House, P.O. Box 908 GT, Mary
Street, Georgetown, Grand Cayman, Cayman Islands, COMPANHIA VALE DO RIO DOCE, a
company organized under the laws of the Federative Republic of Brazil (herein
called the "GUARANTOR"), having its principal office at Avenida Graca Aranha,
No. 26, 17(0) Andar, 20005-900 Rio de Janeiro, RJ, Brazil, and JPMORGAN CHASE
BANK, a bank duly organized and existing under the laws of New York, as Trustee
(herein called the "TRUSTEE").

RECITALS OF THE COMPANY AND THE GUARANTOR

The Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of its debt securities (herein called
collectively the "SECURITIES"), to be issued in one or more tranches of 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.

In addition, the Guarantor has duly authorized the execution and delivery of
this Indenture as guarantor of the Securities. All things necessary to make this
Indenture a valid agreement of the Guarantor, in accordance with its terms, have
been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

It is hereby covenanted and agreed that the terms and conditions upon which the
Securities are issued, authenticated, delivered and accepted by all Persons (as
defined below) who shall from time to time be or become the Holders thereof, and
the terms and conditions upon which any property herein mortgaged and pledged is
to be held and disposed of, which said terms and conditions the Trustee hereby
accepts and agrees to discharge pursuant to the terms hereof, are as follows:

1   DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

    1.1  DEFINITIONS

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

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

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

         1.1.3   all accounting terms not otherwise defined herein have the
                 meanings assigned to them in accordance with generally accepted
                 accounting principles in the United States, 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 at
                 the date of such computation;

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

                                      - 1 -

<PAGE>
         1.1.5   unless the context otherwise requires, any reference to a
                 statute, rule or regulation refers to the same (including any
                 successor statute, rule or regulation thereto) as it may be
                 amended from time to time; and

         1.1.6   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 1.4.

         "ADDITIONAL AMOUNTS" has the meaning specified in Section 10.7.

         "AFFILIATE" of any specified Person means (i) any other Person who
         directly or indirectly, through one or more intermediaries, controls or
         is controlled by, or is under common control with such specified Person
         or (ii) for the purposes of the definition of Indebtedness, any other
         Person in which such specified Person has a 20% or more holding of
         voting shares. 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.

         "AGENT MEMBERS" has the meaning specified in Section 3.4.5.

         "APPLICABLE PROCEDURES" of the Depositary means, with respect to any
         matter at any time, the policies and procedures of the Depositary, if
         any, that are applicable to such matter at such time.

         "AUTHENTICATING AGENT" means any Person authorized by the Trustee
         pursuant to Section 6.14 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 the Guarantor, as applicable, or any committee of that board duly
         authorized to act for it in respect hereof.

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

         "BRAZIL" means the Federative Republic of Brazil.

         "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
         Friday which is not a day on which banking institutions in The City of
         New York or the City of Rio de Janeiro are authorized or obligated by
         law or executive order to close.

         "CLEARSTREAM, LUXEMBOURG" has the meaning specified in Section 3.4.5.

         "COMMISSION" means the U.S. Securities and Exchange Commission, as from
         time to time constituted, created under the Exchange Act, or, if at any
         time after the execution of

                                      - 2 -

<PAGE>
         this instrument such Commission is not existing and performing the
         duties now assigned to it under applicable law, 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 on behalf of the Company by any two of its Directors or its
         attorneys in fact in accordance with its Bylaws and delivered to the
         Trustee.

         "CONSOLIDATED NET TANGIBLE ASSETS" means total assets (stated net of
         applicable reserves and other properly deductible items, to the extent
         not already deducted in the computation of total assets) after
         deducting therefrom (i) all current liabilities and (ii) all goodwill,
         trade names, trademarks, patents and other like intangible assets, each
         as set forth on the most recent balance sheet of the Guarantor and its
         consolidated Subsidiaries and computed in accordance with U.S.
         generally accepted accounting principles.

         "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 as of the date hereof is located at 450 West
         33rd Street, New York, New York 10001, Attention: Institutional Trust
         Services.

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

         "DEFAULTED INTEREST" has the meaning specified in Section 3.6.

         "DEFAULT RATE OF INTEREST" means the rate of interest otherwise payable
         on the principal of the Securities plus 1% per annum.

         "DEPOSITARY" means The Depository Trust Company until a successor
         Depositary shall have become such pursuant to the applicable provisions
         of this Indenture, and thereafter "Depositary" shall mean such
         successor Depositary.

         "DOLLAR" and "$" mean a U.S. Dollar or other equivalent unit in such
         coin or currency of the United States as at the time shall be legal
         tender for the payment of public and private debts.

         "EUROCLEAR" has the meaning specified in Section 3.4.5.

         "EVENT OF DEFAULT" has the meaning specified in Section 5.1.

         "EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934 and any
         successor statute thereto.

         "EXPIRATION DATE" has the meaning specified in Section 1.4.7.

         "FIRST SUPPLEMENTAL INDENTURE" has the meaning specified in Section
         3.1.

         "FOREIGN TAXES" has the meaning specified in Section 10.7.

                                      - 3 -

<PAGE>
         "GLOBAL SECURITY" means a Security that evidences all or part of the
         Securities of any series and is authenticated and delivered to, and
         registered in the name of, the Depositary for such Securities or a
         nominee thereof.

         "GUARANTOR" means the Person named as the "Guarantor" 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 "Guarantor" shall mean such Person.

         "GUARANTY" means the guaranty of the Securities by the Guarantor
         pursuant to this Indenture.

         "HOLDER" means, with respect to any Security, a Person in whose name
         such Security is registered in the Security Register.

         "ILLEGALITY EVENT" has the meaning specified in Section 5.2.

         "INDEBTEDNESS" means any amount payable (whether as a direct obligation
         or indirectly through a guarantee by such person) pursuant to an
         agreement involving or evidencing money borrowed or received, a
         conditional sale or a transfer with recourse or with an obligation to
         repurchase or pursuant to a lease with substantially the same economic
         effect as any such agreement or instrument and which, under U.S.
         generally accepted accounting principles, would constitute a
         capitalized lease obligation, PROVIDED, HOWEVER, that as used in
         Section 5.1.3, "Indebtedness" shall not include any payment made by the
         Guarantor on behalf of an Affiliate, upon any Indebtedness of such
         Affiliate becoming immediately due and payable as a result of a default
         by such Affiliate, pursuant to a guarantee or similar instrument
         provided by the Guarantor in connection with such Indebtedness,
         provided that such payment made by the Guarantor is made within five
         Business Days of notice being provided to the Guarantor that payment is
         due under such guarantee or similar instrument.

         "INDENTURE" means this instrument as originally executed or as it may
         from time to time be supplemented or amended by one or more indentures
         supplemental hereto entered into pursuant to the applicable provisions
         hereof, including, for all purposes of this instrument and any such
         supplemental indenture, the provisions of the Trust Indenture Act that
         are deemed to be a part of and govern this instrument and any such
         supplemental indenture, respectively. The term "Indenture" shall also
         include the terms of particular series of Securities established as
         contemplated by Section 3.1.

         "INTEREST PAYMENT DATE", when used with respect to any Security, means
         the Stated Maturity of an installment of interest on such Security.

         "JUDGMENT CURRENCY" has the meaning specified in Section 10.8.

         "LIEN" means any mortgage, charge, pledge, lien, hypothecation,
         security interest or other encumbrance, including, without limitation,
         any equivalent of the foregoing created under the laws of the Cayman
         Islands, Brazil or any other jurisdiction.

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

                                      - 4 -

<PAGE>
         "MOODY'S" means Moody's Investors Service, Inc.

         "NOTICE OF DEFAULT" means a written notice of the kind specified in
         Section 6.2.

         "OFFICERS' CERTIFICATE" means a certificate signed in the name of the
         Company or the Guarantor by any two of its Directors or its attorneys
         in fact in accordance with its Bylaws, and delivered to the Trustee.

         "OPINION OF COUNSEL" means a written opinion of counsel, who may be
         counsel for the Company or the Guarantor, and who shall be reasonably
         acceptable to the Trustee.

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

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

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

         (iii)  Securities which have been paid pursuant to Section 3.5 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 a Security denominated in one or more foreign
         currencies or currency units which shall be deemed to be Outstanding
         shall be the Dollar equivalent, determined as of such date in the
         manner provided as contemplated by Section 3.1.11, of the principal
         amount of such Security, and (B) Securities owned by the Company or any
         other obligor upon the Securities or any Affiliate of the Company or of
         such other obligor shall be disregarded and deemed not to be
         Outstanding, except that, in determining whether the Trustee shall be
         protected in relying upon any such request, demand, authorization,
         direction, notice, consent, waiver or other action, only Securities
         which a Responsible Officer of 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

                                      - 5 -

<PAGE>
         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 (i) having a combined capital and
         surplus of not less than $100,000,000, (ii) subject to supervision or
         examination by Federal or State authority and (iii) having a long-term
         unsecured debt rating with respect to U.S. dollar obligations of at
         least A2 or its equivalent rating by Moody's, that is authorized by the
         Company to pay the principal of or any premium or interest on any
         Securities on behalf of the Company.

         "PERMITTED LIEN" means any Lien:

         (i)     granted upon or with regard to any property hereafter acquired
                 by the Company or the Guarantor to secure the purchase price of
                 such property or to secure Indebtedness incurred solely for the
                 purpose of financing the acquisition of such property,
                 PROVIDED, HOWEVER, that the maximum sum secured by such
                 security shall not exceed the purchase price of such property
                 or the Indebtedness incurred solely for the purpose of
                 financing the acquisition of such property;

         (ii)    in existence on the date hereof and any extension, renewal or
                 replacement thereof; PROVIDED, HOWEVER, that the total amount
                 of Indebtedness so secured shall not exceed the amount so
                 secured on the date hereof;

         (iii)   arising by operation of law, such as tax, merchants', maritime
                 or other similar liens arising in the ordinary course of the
                 Company's or Guarantor's business;

         (iv)    arising in the ordinary course of business in connection with
                 the financing of export, import or other trade transactions to
                 secure indebtedness of the Company or Guarantor;

         (v)     securing or providing for the payment of Indebtedness incurred
                 in connection with any project financing by the Guarantor,
                 PROVIDED that (1) such security shall not extend to any
                 property in existence on the date hereof, to any revenues from
                 such  property, or to any proceeds from claims belonging to the
                 Guarantor which arise from the operation, failure to meet
                 specifications, failure to complete, exploitation, sale or loss
                 of, or damage to, such property ("CLAIMS PROCEEDS"), (2) such
                 security shall not extend to any property (or to any revenues
                 or Claims Proceeds therefrom) at any project in existence on
                 the date hereof, other than the existing power plant projects
                 named Vitoria Energia, Aimores, Candonga, Funil, Capim Branco I
                 and Capim Branco II, Foz do Chapeco, Santa Isabel, Serra
                 Quebrada and Estreito projects and (3) such security only
                 extends to properties which are the subject of such project
                 financing, to any revenues from such properties, or to any
                 Claims Proceeds from such properties;

         (vi)    granted upon or with regard to any present or future asset or
                 property of the Company or Guarantor to (i) any Brazilian
                 governmental credit agency (including, but not limited to the
                 Brazilian National Treasury, Banco Nacional de Desenvolvimento
                 Economico e Social, BNDES Participacoes S.A.,

                                     - 6 -
<PAGE>
                 Financiadora de Estudos e Projetos and Agencia Especial de
                 Financiamento Industrial); (ii) any Brazilian official
                 financial institutions (including, but not limited to Banco da
                 Amazonia S.A. - BASA e Banco do Nordeste do Brasil S.A. - BNB);
                 (iii) any international official export-import bank or official
                 export-import credit insurer; or (iv) the International Finance
                 Corporation or any international multilateral or
                 government-sponsored agency;

         (vii)   existing on any asset prior to the acquisition thereof by the
                 Company or Guarantor and not created in contemplation of such
                 acquisition;

         (viii)  any Lien created over funds reserved for the payment of
                 principal, interest and premium, if any, due in respect of
                 Securities issued under this Indenture; or

         (ix)    hereafter granted upon or in respect of any asset of the
                 Company or Guarantor other than those referred to in Clauses
                 (i) through (viii) above, PROVIDED that the aggregate  amount
                 of Indebtedness secured pursuant to this clause (ix) shall not,
                 on the date any such Indebtedness is incurred, exceed an amount
                 equal to 10 per cent of the Guarantor's stockholders' equity
                 (calculated on the basis of the Guarantor's latest quarterly
                 unaudited or annual audited non-consolidated financial
                 statements, whichever is the most recently prepared, in
                 accordance with accounting principles generally accepted in
                 Brazil and currency exchange rates prevailing on the last day
                 of the period covered by such financial statements).

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

         "PLACE OF PAYMENT", when used with respect to the Securities of any
         series and subject to Section 10.2, 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 3.1.6.

         "PREDECESSOR SECURITY" of any particular Security means every previous
         Security evidencing all or a portion of the same debt as that evidenced
         by such particular Security; and, for the purposes of this definition,
         any Security authenticated and delivered under Section 3.5 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.

         "RDA" has the meaning specified in Section 1.14.

         "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 as set forth in such Security.

         "REGISTRATION RIGHTS AGREEMENT", has the meaning specified in Section
         3.1.

                                     - 7 -
<PAGE>
         "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 3.1.5.

         "REPURCHASE DATE", when used with respect to any Security to be
         repurchased, means the date fixed for such repurchase by or pursuant to
         this Indenture.

         "REPURCHASE PRICE", when used with respect to any Security to be
         repurchased, means the price at which it is to be repurchased pursuant
         to this Indenture as set forth in such Security.

         "RESPONSIBLE OFFICER", when used with respect to the Trustee, means any
         vice president, any assistant secretary, any assistant treasurer, any
         trust officer, any assistant trust officer or any other officer of the
         Trustee, in each case, located in the Institutional Trust Services
         department (or successor department) of the Trustee, 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.

         "SECURITIES" has the meaning stated in the first recital of this
         Indenture and more particularly means any Securities authenticated and
         delivered under this Indenture. All references herein to the Securities
         shall be deemed to include the Guaranty of the Securities, which is an
         integral part thereof.

         "SECURITIES ACT" means the U.S. Securities Act of 1933 and any
         successor statute thereto.

         "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
         meanings specified in Section 3.4.

         "SIGNIFICANT SUBSIDIARY" shall mean, at any time, a Subsidiary which
         meets any of the following conditions: (a) the Guarantor's and its
         other Subsidiaries' investments in and advances to the Subsidiary
         exceed 10% of the total assets of the consolidated group as of the end
         of the most recently completed fiscal year; (b) the Guarantor's and its
         other Subsidiaries' proportionate share of the total assets (after
         intercompany eliminations) of the Subsidiary exceeds 10% of the total
         assets of the consolidated group as of the end of the most recently
         completed fiscal year; or (c) the Guarantor's and its other
         Subsidiaries' equity in the income from continuing operations before
         income taxes, extraordinary items and cumulative effect of a change in
         accounting principle of the Subsidiary exceeds 10% of such income of
         the consolidated group for the most recently completed fiscal year.

         "SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
         date fixed by the Trustee pursuant to Section 3.6.

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

         "SUBSIDIARY" shall mean any entity of which the Guarantor directly or
         indirectly owns more than 51% of the outstanding voting shares, and the
         Guarantor has the ability to elect a majority of the members of the
         board of directors or other governing body.

                                     - 8 -
<PAGE>
         "SUCCESSOR CORPORATION" has the meaning specified in Section 8.1.1.

         "SUCCESSOR JURISDICTION" means the jurisdiction, other than Brazil or
         the Cayman Islands, in which a Successor Corporation is incorporated or
         considered to be resident.

         "TRANSFER" of any Security means any sale, pledge, transfer,
         hypothecation or other disposition of such Security or any interest
         therein.

         "TRUST INDENTURE ACT" means the U.S. Trust Indenture Act of 1939 and
         any successor statute thereto.

         "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 Person,
         "Trustee" as used with respect to the Securities of any series shall
         mean the Trustee with respect to Securities of that series. Each
         Trustee shall be a Person that (i) is eligible pursuant to the Trust
         Indenture Act to act as such, (ii) has a combined capital and surplus
         of at least $100,000,000, (iii) is subject to supervision or
         examination by Federal or State authority, (iv) has a long-term
         unsecured debt rating with respect to U.S. dollar obligations of at
         least A2 or its equivalent rating by Moody's and (v) has its Corporate
         Trust Office in the United States.

         "UNITED STATES" or "U.S." means the United States of America (including
         the States thereof and the District of Columbia), its territories, its
         possessions and other areas subject to its jurisdiction.

    1.2  COMPLIANCE CERTIFICATES AND OPINIONS

         Upon any application or request by the Company to the Trustee to take
         any action under any provision of this Indenture, the Company and the
         Guarantor shall furnish to the Trustee such certificates and opinions
         as may be required hereunder and under the Trust Indenture Act. Each
         such certificate or opinion shall be given in the form of an Officers'
         Certificate, if to be given by an officer of the Company or the
         Guarantor, 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 (except for
         certificates provided for in Section 10.4) shall include,

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

         1.2.2   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;

         1.2.3   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

                                     - 9 -
<PAGE>
                 informed opinion as to whether or not such covenant or
                 condition has been complied with; and

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

    1.3  FORM OF DOCUMENTS DELIVERED TO TRUSTEE

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

         Any certificate or opinion of an officer of the Company or the
         Guarantor 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 or the
         Guarantor stating that the information with respect to such factual
         matters is in the possession of the Company or the Guarantor, 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.

    1.4  ACTS OF HOLDERS; RECORD DATES

         1.4.1   Any request, demand, authorization, direction, notice, consent,
                 waiver or other action provided or permitted by this Indenture
                 to be given or taken by Holders may be embodied in and
                 evidenced by one or more instruments of substantially similar
                 tenor signed by such Holders in person or by agent duly
                 appointed in writing; and, except as herein otherwise expressly
                 provided, such action shall become effective when such
                 instrument or instruments are delivered to the Trustee and,
                 where it is hereby expressly required, to the Company and the
                 Guarantor. 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 6.1)
                 conclusive in favor of the Trustee, the Company and the
                 Guarantor, if made in the manner provided in this Section.

                                    - 10 -
<PAGE>
         1.4.2   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.

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

         1.4.4   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,
                 the Company or the Guarantor in reliance thereon, whether or
                 not notation of such action is made upon such Security.

         1.4.5   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 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 canceled 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 1.6.

                                    - 11 -
<PAGE>
         1.4.6   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 5.3, (iii) any request to institute proceedings
                 referred to in Section 5.8.2 or (iv) any direction referred to
                 in Section 5.13, 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, 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 (whereupon the record
                 date previously set shall automatically and without any action
                 by any Person be canceled and of no effect), nor shall anything
                 in this paragraph 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 given to the
                 Company in writing and to each Holder of Securities of the
                 relevant series in the manner set forth in Section 1.6.

         1.4.7   With respect to any record date set pursuant to this Section,
                 the party hereto that sets such record date 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 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 1.6, 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 that 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.

                                    - 12 -
<PAGE>
    1.5  NOTICES, ETC., TO TRUSTEE, COMPANY AND GUARANTOR

         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,

         1.5.1   the Trustee by any Holder or by the Company or Guarantor shall
                 be sufficient for every purpose hereunder if made, given,
                 furnished or filed in writing (which may be by facsimile) to or
                 with the Trustee at its Corporate Trust Office, or

         1.5.2   (i) 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 both the Company and the Guarantor and (ii)
                 the Guarantor 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 both the Guarantor and the Company, in
                 either case addressed to it at the address specified below or
                 at any other address previously furnished in writing to the
                 Trustee by the Company or the Guarantor:

                 Avenida Graca Aranha, No. 26, 17[degree] Andar
                 20005-900 Rio de Janeiro, RJ, Brazil
                 Attention: Financial Director
                 Fax:               011-5521-3814-4679
                 Tel:               011-5521-3814-4726
                 with a copy to:
                 Attention: General Counsel
                 Fax:               011-5521-3814-9921
                 Tel:               011-5521-3814-4566

    1.6  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 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.

                                    - 13 -
<PAGE>
          Notwithstanding the provisions of this Section 1.6, in case any series
          of Securities are listed in any stock exchange, a notice to holders of
          such Securities given in accordance with the rules and procedures of
          such stock exchange shall be regarded as a valid notice under this
          section 1.6.

    1.7   CONFLICT WITH TRUST INDENTURE ACT

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

    1.8   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.

    1.9   SUCCESSORS AND ASSIGNS

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

    1.10  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.

    1.11  BENEFITS OF INDENTURE

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

   1.12   GOVERNING LAW

          THIS INDENTURE, THE SECURITIES AND THE GUARANTY SHALL BE GOVERNED BY,
          AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

   1.13   LEGAL HOLIDAYS

          In any case where any Interest Payment Date, Redemption Date or Stated
          Maturity of any Security shall not be a Business Day, then
          (notwithstanding any other provision of this Indenture or of the
          Securities) payment of interest or principal (and premium, if any)
          need not be made on such date, but may be made on the next succeeding
          Business Day with the same force and effect as if made on the Interest
          Payment Date, Redemption Date or at the Stated Maturity, as the case
          may be; PROVIDED that no interest

                                    - 14 -
<PAGE>
          shall accrue for the period from and after such Interest Payment Date,
          Redemption Date or Stated Maturity, as the case may be.

    1.14  CONSENT TO SERVICE; JURISDICTION

          The Company, the Guarantor and the Trustee agree that any legal suit,
          action or proceeding arising out of or relating to this Indenture, and
          the Company and the Guarantor agree that any legal suit, action or
          proceeding arising out of or relating to the Securities, may be
          instituted in any federal or state court in the Borough of Manhattan,
          The City of New York, in respect of actions brought against each such
          party as a defendant, and each waives any objection which it may now
          or hereafter have to the laying of the venue of any such legal suit,
          action or proceeding, waives any immunity, to the extent permitted by
          law, from jurisdiction or to service of process in respect of any such
          suit, action or proceeding, waives any right to which it may be
          entitled on account of place of residence or domicile and irrevocably
          submits to the jurisdiction of any such court in any such suit, action
          or proceeding. The Company and the Guarantor further submit to the
          jurisdiction of the courts of their own corporate domiciles in any
          legal suit, action or proceeding arising out of or relating to this
          Indenture or the Securities. The Company and the Guarantor hereby
          designate and appoint Rio Doce America, Inc. ("RDA") located at 546
          5th Avenue, 12th Floor, New York, New York, 10036, as their authorized
          agent upon which process may be served in any legal suit, action or
          proceeding arising out of or relating to this Indenture or the
          Securities which may be instituted in any federal or state court in
          the Borough of Manhattan, The City of New York, New York, and agree
          that service of process upon such agent, and written notice of said
          service to the Company or the Guarantor, as the case may be, by the
          Person serving the same, shall be deemed in every respect effective
          service of process upon the Company or the Guarantor in any such suit,
          action or proceeding and further designate the domicile of RDA
          specified above and any domicile RDA may have in the future as their
          domicile to receive service of process. If for any reason RDA (or any
          successor agent for this purpose) shall cease to act as agent for
          service of process as provided above, the Company and the Guarantor
          will promptly appoint a successor agent for this purpose reasonably
          acceptable to the Trustee. The Company and the Guarantor agree to take
          any and all actions as may be necessary to maintain such designation
          and appointment of such agent in full force and effect.

    1.15  LANGUAGE OF NOTICES, ETC.

          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.

2   SECURITY FORMS

    2.1   FORMS GENERALLY

          The Securities and the Trustee's certificates of authentication shall
          be in substantially the forms 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

                                    - 15 -
<PAGE>
          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 thereof
          or as may, consistently herewith, be determined by the officers
          executing such Securities, as evidenced by their execution of the
          Securities. If the form of Securities of any series is established by
          action taken pursuant to a Board Resolution, a copy of an appropriate
          record of such action shall be certified by the Secretary or an
          Assistant Secretary of the Company and the Guarantor and delivered to
          the Trustee at or prior to the delivery of the Company Order
          contemplated by Section 3.3 for the authentication and delivery of
          such Securities.

          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.

    2.2   FORM OF FACE OF SECURITY

          The following legends shall appear on the face of each Global
          Security:

          THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
          HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
          DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE
          COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS
          SECURITY FOR ALL PURPOSES.

          UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
          SECURITIES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES
          REFERRED TO IN SECTION 3.4.2. OF THE INDENTURE, THIS GLOBAL SECURITY
          MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
          NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
          DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY
          OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
          SUCCESSOR DEPOSITARY.

          The following legend shall appear on the face of each Global Security
          for which The Depository Trust Company is to be the Depositary:

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                                    - 16 -
<PAGE>
                             VALE OVERSEAS LIMITED
                            [                     ]
                    GUARANTEED BY COMPANHIA VALE DO RIO DOCE

          No. [__]
          CUSIP No. [__]                                                   $[ ]

          VALE OVERSEAS LIMITED, a company organized and existing under the laws
          of the Cayman Islands (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, INSERT -- , and to pay interest
          thereon from [ ] or from the most recent Interest Payment Date to
          which interest has been paid or duly provided for, semi-annually on [
          ] and [ ] in each year, commencing [ ], and at the Maturity thereof,
          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 [ ] or [ ]
          (whether or not a Business Day), as the case may be, next preceding
          such Interest Payment Date. Any such interest so payable, but not
          punctually paid or duly provided for on any Interest Payment Date 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 this Security 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, upon repurchase 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.]

          Payment of the principal of [(and premium, if any)] and [IF
          APPLICABLE, INSERT -- any such] interest on this Security will be made
          pursuant to the Applicable Procedures of the

                                    - 17 -
<PAGE>
          Depositary as permitted in the Indenture, PROVIDED, HOWEVER, that if
          this Security is not a Global Security, payment may be made at the
          office or agency of the Company maintained for that purpose in New
          York, New York, in such coin or currency of the United States as at
          the time of payment is legal tender for payment of public and private
          debts, upon surrender of this Security in the case of any payment due
          at the Maturity of the principal thereof (other than any payment of
          interest payable on an Interest Payment Date); and PROVIDED, FURTHER,
          that at the option of the Company, payment of interest may be made by
          check mailed to the address of the Person entitled thereto as such
          address shall appear in the Security Register.

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

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

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

          Dated: [______]

          VALE OVERSEAS LIMITED

          By: ______________________________
              Name:
              Title:

          By: ______________________________
              Name:
              Title:

          The undersigned hereby irrevocably and unconditionally guarantees the
          full and punctual payment (whether at the Stated Maturity, upon
          redemption, purchase pursuant to an offer to purchase or acceleration
          or otherwise) of the principal, premium, interest, Additional Amounts
          and all other amounts that may come due and payable under this
          Security.

          IN WITNESS WHEREOF, the Guarantor has caused this instrument to be
          duly endorsed.

          COMPANHIA VALE DO RIO DOCE

          By: ______________________________
              Name:
              Title:

                                    - 18 -
<PAGE>
          By: ______________________________
              Name:
              Title:

    2.3   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 tranches of one or more series under an Indenture, dated
          as of March 8, 2002 (herein called the "INDENTURE", which term shall
          have the meaning assigned to it in such instrument), among the
          Company, Companhia Vale do Rio Doce, as Guarantor (herein called the
          "GUARANTOR") and JPMorgan Chase 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, limitations of rights, duties and
          immunities thereunder of the Company, the Guarantor, the Trustee and
          the Holders of the Securities and of the terms upon which the
          Securities are, and are to be, authenticated and delivered. The full
          and punctual payment of the principal of, premium, if any, and
          interest on, and all other amounts payable under, this Security is
          guaranteed by the Guarantor. 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 [ ] days' nor more than [ ] days'
          notice, at any time [IF APPLICABLE, INSERT -- on or after [ ], 20[ ]],
          as a whole or in part, at the election of the Company, at the
          following Redemption Prices (expressed as percentages of the principal
          amount): If redeemed [IF APPLICABLE, INSERT -- on or before [ ], [ ]%,
          and if redeemed] during the 12-month period beginning [ ] of the years
          indicated,

                     REDEMPTION                               REDEMPTION
          YEAR         PRICE                YEAR                 PRICE
          ----         -----                ----                 -----

          and thereafter at a Redemption Price equal to [ ]% of the principal
          amount, together in the case of any such redemption 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 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.]

                                     - 19 -
<PAGE>
          [If the Security is not subject to redemption, insert - This Security
          is not redeemable prior to Stated Maturity.]

          [IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT --
          If an Event of Default or Illegality Event 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 or Illegality Event 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.]

          All payments of principal[, premium] and interest in respect of the
          Securities shall be made without withholding or deduction for any
          present or future taxes, duties, assessments or governmental charges
          of whatever nature imposed, levied, collected, withheld or assessed by
          or on behalf of the Cayman Islands or Brazil or any Successor
          Jurisdiction or any authority therein or thereof having power to tax
          ("FOREIGN TAXES") except to the extent that such Foreign Taxes are
          required by the Cayman Islands, Brazil, such Successor Jurisdiction or
          such authority to be withheld or deducted. In the event of any
          withholding or deduction for any Foreign Taxes, the Company or the
          Guarantor, as the case may be, shall pay such additional amounts
          ("ADDITIONAL AMOUNTS") as will result in receipt by the Holders of
          Securities on the respective due dates of such amounts as would have
          been received by them had no such withholding or deduction (including
          for any Foreign Taxes payable in respect of Additional Amounts) been
          required, except that no such Additional Amounts shall be payable with
          respect to any payment on a Security:

          (i)    to, or to a third  party on behalf of, a Holder who is liable
                 for any such  taxes,  duties,  assessments or other
                 governmental  charges  which  would  not  have  been  imposed
                 but for (A) a connection  between  the Holder and the Cayman
                 Islands or Brazil  other than the mere holding of such
                 Security and the receipt of payments  with  respect to such
                 Security or (B)  failure  by the Holder to comply  with any
                 certification,  identification  or other  reporting
                 requirement  concerning  the  nationality,  residence,
                 identity  or connection  with  the  Cayman  Islands,  Brazil
                 or  a  Successor   Jurisdiction,   or applicable  political
                 subdivision  or  authority  thereof or therein  having power to
                 tax, of such Holder,  if compliance  is required by such
                 Successor  Jurisdiction,  or any political  subdivision  or
                 authority  thereof or therein  having power to tax as a
                 precondition  to exemption  from, or reduction in the rate of,
                 the tax,  assessment or other  governmental  charge and the
                 Company  has given the  Holders at least 30 days' notice that
                 Holders will be required to provide  such  certification,
                 identification or other requirement;

                                     - 20 -
<PAGE>
          (ii)   in respect of any such taxes, duties, assessments or other
                 governmental charges with respect to a Security surrendered (if
                 surrender is required) more than 30 days after the date on
                 which such payment became due and payable or the date on which
                 payment thereof is duly provided for and notice thereof given
                 to Holders, whichever occurs later, except to the extent that
                 the Holder of such Security would have been entitled to such
                 Additional Amounts on surrender of such Security for payment on
                 the last day of such 30-day period;

          (iii)  in respect of estate, inheritance, gift, sales, transfer,
                 personal property or similar tax, assessment or governmental
                 charge imposed with respect to a Security;

          (iv)   in respect of any tax, assessment or other governmental charge
                 payable otherwise than by deduction or withholding from
                 payments on any series of Securities or by direct payment by
                 the Company or the Guarantor in respect of claims made against
                 the Company or the Guarantor;

          (v)    where such Additional Amount is imposed on a payment to an
                 individual and is required to be made pursuant to any European
                 Union Directive on the taxation of savings implementing the
                 conclusions of the ECOFIN Council meeting of November 26-27,
                 2000 or any law implementing or complying with, or introduced
                 in order to conform to, such directive; or

          (vi)   in respect of any combination of the above.

          For purposes of the provisions described in clause (i) above, the term
          "Holder" of any Security means the direct nominee of any beneficial
          owner of such Security, which holds such beneficial owner's interest
          in such Security. Notwithstanding the foregoing, the limitations on
          the Company's or the Guarantor's obligation to pay Additional Amounts
          set forth in clause (i) above shall not apply if the provision of
          information, documentation or other evidence described in such clause
          (i) would be materially more onerous, in form, in procedure or in the
          substance of information disclosed, to a Holder or beneficial owner of
          a Security (taking into account any relevant differences between U.S.
          and Cayman Islands or Brazilian law, regulation or administrative
          practice) than comparable information or other reporting requirements
          imposed under U.S. tax law (including tax treaties between the United
          States and the Cayman Islands or Brazil), regulation (including
          proposed regulations) and administrative practice.

          The Company or the Guarantor, as the case may be, shall promptly
          provide the Trustee with documentation (which may consist of certified
          copies of such documentation) satisfactory to the Trustee evidencing
          the payment of Foreign Taxes in respect of which the Company or the
          Guarantor has paid any Additional Amounts. Copies of such
          documentation shall be made available to the Holders of the Securities
          or the Paying Agent, as applicable, upon request therefor.

          The Company or the Guarantor, as the case may be, shall pay all stamp,
          issue, registration, documentary or other similar duties, if any,
          which may be imposed by the Cayman Islands or Brazil or any
          governmental entity or political subdivision therein or

                                     - 21 -
<PAGE>
          thereof, or any taxing authority of or in any of the foregoing, with
          respect to the Indenture or the issuance of the Securities or the
          Guaranties.

          All references herein or in the Indenture to principal, premium or
          interest in respect of any Security or Guaranty shall be deemed to
          include all Additional Amounts, if any, payable in respect of such
          principal, premium or interest, unless the context otherwise requires,
          and express mention of the payment of Additional Amounts in any
          provision hereof shall not be construed as excluding reference to
          Additional Amounts in those provisions hereof where such express
          mention is not made.

          In the event that Additional Amounts actually paid with respect to the
          Securities pursuant to the preceding paragraph are based on rates of
          deduction or withholding of taxes in excess of the appropriate rate
          applicable to the Holder of such Securities, and, as a result thereof
          such Holder is entitled to make claim for a refund or credit of such
          excess from the authority imposing such withholding tax, then such
          Holder shall, by accepting such Securities, be deemed to have assigned
          and transferred all right, title, and interest to any such claim for a
          refund or credit of such excess to the Company and the Guarantor.
          However, by making such assignment, the Holder makes no representation
          or warranty that the Company or the Guarantor will be entitled to
          receive such claim for a refund or credit and incurs no other
          obligation with respect thereto.

          All references in the Indenture and the Securities to principal in
          respect of any Security shall be deemed to mean and include any
          Redemption Price or Repurchase Price payable in respect of such
          Security pursuant to any redemption or repurchase right hereunder (and
          all such references to the Stated Maturity of the principal in respect
          of any Security shall be deemed to mean and include the Redemption
          Date or Repurchase Date with respect to any such Redemption Price or
          Repurchase Price), and all such references to principal, premium,
          interest or Additional Amounts shall be deemed to mean and include any
          amount payable in respect hereof pursuant to Section 10.7 of the
          Indenture, and express mention of the payment of any Redemption Price,
          or Repurchase Price or any such other amount in any provision hereof
          or of the Indenture shall not be construed as excluding reference to
          the payment of any Redemption Price or Repurchase Price, or any such
          other amounts in those provisions hereof where such express reference
          is not made.

          The Company may redeem the Securities if, as a result of any amendment
          to, or change in, the laws (or any rules, or regulations thereunder)
          of the Cayman Islands or Brazil or any political subdivision or taxing
          authority thereof or therein affecting taxation or any amendment to or
          change in an official interpretation, administration or application of
          such laws, rules, or regulations (including a holding by a court of
          competent jurisdiction), which amendment or change of such laws,
          rules, or regulations or the interpretation thereof becomes effective
          on or after [Insert date specified therefor in Securities of the
          applicable series], the Company would be obligated, after taking
          measures the Company considers reasonable to avoid such requirement,
          to pay Additional Amounts in excess of the Additional Amounts that the
          Company would be obligated to pay if payments made on the Securities
          were subject to withholding or deduction of Foreign Taxes at the rate
          of 15%. In such event, the Securities are subject to redemption upon
          not less than 30 nor more than 60 days' notice by mail, at any time,
          as a whole but not in

                                    - 22 -
<PAGE>
          part, at the election of the Company, at a cash price equal to the sum
          of (i) the principal amount of the Securities being redeemed, (ii) any
          accrued original issue discount thereon to the date fixed for
          redemption, (iii) accrued and unpaid current interest thereon to the
          date fixed for redemption, (iv) any premium applicable in the case of
          redemption prior to Maturity, and (v) any Additional Amounts (as
          defined in the Indenture) which would otherwise be payable.

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

          As 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 or Illegality Event with respect to the
          Securities of this series, the Holders of not less than 25% 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 or
          Illegality Event as Trustee and offered the Trustee indemnity
          reasonably satisfactory to it, 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 of the Trustee or agency of the Company

                                    - 23 -
<PAGE>
          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 $1,000 and any 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.

          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 surrender of this Security for registration of transfer,
          the Company, the Guarantor, the Trustee and any agent of the Company,
          the Guarantor 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
          Guarantor, the Trustee nor any such agent shall be affected by notice
          to the contrary.

          [IF THIS SECURITY IS A GLOBAL SECURITY, INSERT - This Security is a
          Global Security and is subject to the provisions of the Indenture
          relating to Global Securities, including the limitations in Section
          3.4 thereof on transfers and exchanges of Global Securities.]

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

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

          ABBREVIATIONS

          The following abbreviations, when used in the inscription of the face
          of this Security, shall be construed as though they were written out
          in full according to applicable laws or regulations:

          TEN COM - as tenants in common

          TEN ENT - as tenants by the [__] entireties

          JT TEN - as joint tenants with right of survivorship and not as
          tenants in common

          UNIF GIFT MIN ACT--______________ (Cust)

          Custodian _____________ under Uniform (Minor)

          Gifts to Minors Act ________________(State)

          Additional abbreviations may also be used though not in the above
          list.

                                    - 24 -
<PAGE>
    2.4   FORM OF TRUSTEE'S CERTIFICATE OF  AUTHENTICATION

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

          Dated: [_______]

          JPMORGAN CHASE BANK,
          as Trustee

          By: ________________________
              Authorized Officer

3   THE SECURITIES

    3.1   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 tranches of one or more
          series. No Securities may be issued before written confirmation is
          received by the Trustee from Moody's that the issue of such Securities
          will not result in a downgrading of the then current rating assigned
          to any Outstanding Securities provided that no such written
          confirmation shall be required in connection with the issuance of up
          to $300,000,000 aggregate principal amount of Series A and Series B
          8.625% Enhanced Guaranteed Notes due 2007 (collectively, the "2007
          Notes") pursuant to the First Supplemental Indenture dated as of the
          date hereof among the Company, the Guarantor and the Trustee (the
          "First Supplemental Indenture") or (ii) the issuance of the "Exchange
          Securities" contemplated by the Registration Rights Agreement dated as
          of March 8, 2002 among the Company, the Guarantor and the Initial
          Purchasers named therein (the "Registration Rights Agreement"). There
          shall be established in or pursuant to a Board Resolution and, subject
          to Section 3.3, 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,

          3.1.1  the title of the Securities, including CUSIP Numbers, of the
                 series (which shall distinguish the Securities of the series
                 from Securities of any other series);

          3.1.2  any limit upon the aggregate principal amount of the Securities
                 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 3.4, 3.5,
                 9.6 or 11.5 and except for any Securities which, pursuant to
                 Section 3.3, are deemed never to have been authenticated and
                 delivered hereunder);

          3.1.3  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;

                                    - 25 -
<PAGE>
          3.1.4  the date or dates on which the principal of the Securities of
                 the series is payable;

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

          3.1.6  the place or places where the principal of and any premium and
                 interest on Securities of the series shall be payable and the
                 manner in which any payment may be made;

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

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

          3.1.9  the rights, if any, of the Holders of the series to demand
                 exchange of their Securities for Securities subject to a
                 registration statement under the Securities Act declared
                 effective by the Commission;

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

          3.1.11 if other than the currency of the United States, the currency,
                 currencies or currency units in which payment of the principal
                 of and any premium and interest on any Securities of the series
                 shall be payable and the manner of determining the equivalent
                 thereof in the currency of the United States for purposes of
                 the definition of "Outstanding" in Section 1.1;

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

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

          3.1.14 if other than the principal amount thereof, the portion of the
                 principal amount of Securities of the series which shall be
                 payable upon declaration of acceleration of the Maturity
                 thereof pursuant to Section 5.3;

                                    - 26 -
<PAGE>
          3.1.15 any collateral or other security pledged against payment of
                 principal,  interest or premium,  if any, on the Securities;

          3.1.16 the applicability, non-applicability, or variation, of Section
                 10.7 with respect to the Securities of such series;

          3.1.17 if and as applicable, that the Securities the series shall be
                 issuable in whole or in part in the form of one or more Global
                 Securities and, in such case, the Depositary or Depositaries
                 for such Global Security or Global Securities and any
                 circumstances other than those set forth in Section 3.4 in
                 which any such Global Security may be transferred to, and
                 registered and exchanged for Securities registered in the name
                 of, a Person other than the Depositary for such Global Security
                 or a nominee thereof and in which any such transfer may be
                 registered;

          3.1.18 the terms and conditions, if any, pursuant to which the
                 Securities are convertible into or exchangeable for any other
                 securities;

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

          3.1.20 any other terms of the series (which terms shall not be
                 inconsistent with the provisions of this Indenture, except as
                 permitted by Section 9.1.5).

          All Securities of any one series shall be substantially identical
          except as to issue price and first payment of interest.

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

          Notwithstanding Clause 3.1.2 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.

    3.2   DENOMINATIONS

          The Securities shall be issuable only in registered form without
          coupons and, unless otherwise specified as contemplated by Section
          3.1.10, only in denominations of $1,000 and any integral multiple
          thereof.

    3.3   EXECUTION, AUTHENTICATION, DELIVERY AND DATING

          The Securities shall be executed on behalf of the Company by any two
          of its Directors or its attorneys in fact in accordance with its
          Bylaws. The Guaranty on the Securities shall be endorsed on behalf of
          the Guarantor by any two of its Directors or its attorneys in fact in
          accordance with its Bylaws. The signature of any of these officers on
          the Securities or the Guaranty may be manual or facsimile.

                                    - 27 -
<PAGE>
          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. Guaranties bearing the manual or facsimile endorsement of
          individuals who were at any time the proper officers of the Guarantor
          shall bind the Guarantor, notwithstanding that such individuals or any
          of them have ceased to hold such offices prior to the authentication
          and delivery of Securities bearing such endorsement 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 and properly endorsed by the Guarantor to the
          Trustee for authentication, together with a Company Order for the
          authentication and delivery of such Securities, and the Trustee in
          accordance with such Company Order shall authenticate and deliver such
          Securities. 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 2.1 and 3.1, in authenticating such Securities,
          and accepting the additional responsibilities under this Indenture in
          relation to such Securities, the Trustee shall be entitled to receive,
          and (subject to Section 6.1) shall be fully protected in relying upon,
          an Opinion of Counsel stating,

          3.3.1  if the form of such Securities has been established by or
                 pursuant to Board Resolution as permitted by Section 2.1, that
                 such form has been established in conformity with the
                 provisions of this Indenture;

          3.3.2  if the terms of such Securities have been established by or
                 pursuant to Board Resolution as permitted by Section 3.1, that
                 such terms have been established in conformity with the
                 provisions of this Indenture;

          3.3.3  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; and

          3.3.4  that the Guaranty, when the Securities upon which it shall have
                 been endorsed shall have been authenticated and delivered by
                 the Trustee and when properly endorsed by the Guarantor in the
                 manner and subject to any conditions specified in such Opinion
                 of Counsel, will constitute valid and legally binding
                 obligations of the Guarantor 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 the general equity principles.

          If such form or terms have been so established, the Trustee shall not
          be required to authenticate such Securities if, in the opinion of
          counsel to the Trustee, the issue of

                                    - 28 -
<PAGE>
          such Securities pursuant to this Indenture will affect the Trustee's
          own rights, duties or immunities under the Securities and this
          Indenture.

          Notwithstanding the provisions of Section 3.1 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 3.1 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 and in that case the Trustee may rely, as to the
          authorization by the Company and the Guarantor of any of such
          Securities and the Guaranty, the form and terms thereof and the
          legality, validity, binding effect and enforceability thereof, upon
          the Opinion of Counsel and the other documents delivered pursuant to
          Sections 2.1 and 3.1 and this Section, as applicable, in connection
          with the first authentication of Securities of such series.

          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 3.8, 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.

    3.4   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 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 at an office or agency of the Company designated pursuant to
          Section 10.2 for such purpose, and subject to the other provisions of
          this Section, the Company shall execute and the Guarantor shall
          endorse, and the Trustee shall authenticate and deliver, in the name
          of the designated transferee or transferees, one or more new
          Securities of any authorized denominations and of a like aggregate
          principal amount.

          At the option of the Holder, and subject to the other provisions of
          this Section, Securities of any series may be exchanged for other
          Securities of the same series, of any

                                    - 29 -
<PAGE>
          authorized denominations and of a like aggregate principal amount,
          upon surrender of the Securities to be exchanged at such office or
          agency. Whenever any Securities are so surrendered for exchange, and
          subject to the other provisions of this Section, the Company shall
          execute and the Guarantor shall endorse, and the Trustee shall
          authenticate and deliver, the Securities which the Holder making the
          exchange is entitled to receive.

          All Securities issued upon any registration of transfer or exchange of
          Securities shall be the valid obligations of the Company, evidencing
          the same debt, and subject to the other provisions of this Section,
          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 9.6 or 11.5 not
          involving any transfer.

          If the Securities of any series (or of any series and specified tenor)
          are to be redeemed in part, 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 under Section 11.2 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 3.4.1, 3.4.2, 3.4.3, 3.4.4 and 3.4.5 below
          shall apply only to Global Securities:

          3.4.1  Each Global Security authenticated under this Indenture shall
                 be registered in the name of the Depositary 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.

          3.4.2  Notwithstanding any other provision in this Indenture or the
                 Securities, 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 or a nominee thereof
                 unless (A) the Depositary has notified the Company that it is
                 unwilling or unable to continue as Depositary for such Global
                 Security, (B) the Depositary has ceased to function as a
                 clearing agency registered under the Exchange Act or
                 Clearstream, Luxembourg or Euroclear is closed for business for
                 a continuous period of 14 days (other than by reason of
                 holidays, statutory or otherwise) or

                                    - 30 -
<PAGE>
                 announces an intention permanently to cease doing business or
                 does in fact do so, (C) there shall have occurred and be
                 continuing an Event of Default or Illegality Event with respect
                 to such Global Security or (D) a request for certificates has
                 been made by the Company upon 60 days' prior written notice
                 given to the Trustee in accordance with the Depositary's
                 customary procedures and to the Depositary. Any Global Security
                 exchanged pursuant to Clause (A) or (B) above shall be so
                 exchanged in whole and not in part and any Global Security
                 exchanged pursuant to Clause (C) or (D) above may be exchanged
                 in whole or from time to time in part as directed by the
                 Depositary. Any Security issued in exchange for a Global
                 Security or any portion thereof shall be a Global Security,
                 PROVIDED that any such Security so issued that is registered in
                 the name of a Person other than the Depositary or a nominee
                 thereof shall not be a Global Security.

          3.4.3  Securities issued in exchange for a Global Security or any
                 portion thereof pursuant to Clause 3.4.2 above shall be issued
                 in definitive, fully registered form, without interest coupons,
                 shall have an aggregate principal amount equal to that of such
                 Global Security or portion thereof to be so exchanged, shall be
                 registered in such names and be in such authorized
                 denominations as the Depositary shall designate and shall bear
                 any legends required hereunder. Any Global Security to be
                 exchanged in whole shall be surrendered by the Depositary to
                 the Trustee, as Security Registrar. With regard to any Global
                 Security to be exchanged in part, either such Global Security
                 shall be so surrendered for exchange or, if the Trustee is
                 acting as custodian for the Depositary or its nominee with
                 respect to such Global Security, the principal amount thereof
                 shall be reduced, by an amount equal to the portion thereof to
                 be so exchanged, by means of an appropriate adjustment made on
                 the records of the Trustee. Upon any such surrender or
                 adjustment, the Trustee shall authenticate and deliver the
                 Security issuable on such exchange to or upon the order of the
                 Depositary or an authorized representative thereof.

          3.4.4  In the event of the occurrence of any of the events specified
                 in Clause 3.4.2 above, the Company will promptly make available
                 to the Trustee a reasonable supply of certificated Securities
                 in definitive, fully registered form, without interest coupons.

          3.4.5  Neither any members of, or participants in, the Depositary
                 ("AGENT MEMBERS") nor any other Persons on whose behalf Agent
                 Members may act (including Euroclear Bank S.A./N.V., as
                 operator of the Euroclear System ("EUROCLEAR") and Clearstream
                 Banking, societe anonyme ("CLEARSTREAM, LUXEMBOURG") and
                 account holders and participants therein) shall have any rights
                 under this Indenture with respect to any Global Security, or
                 under any Global Security, and the Depositary or such nominee,
                 as the case may be, may be treated by the Company, the Trustee
                 and any agent of the Company or the Trustee as the absolute
                 owner and holder of such Global Security for all purposes
                 whatsoever. Notwithstanding the foregoing, nothing herein shall
                 prevent the Company, the Trustee or any agent of the Company or
                 the Trustee from giving effect to any

                                    - 31 -
<PAGE>
                 written certification, proxy or other authorization furnished
                 by the Depositary or such nominee, as the case may be, or
                 impair, as between the Depositary, its Agent Members and any
                 other person on whose behalf an Agent Member may act, the
                 operation of customary practices of such Persons governing the
                 exercise of the rights of a holder of any Security.

          3.4.6  None of the Company, the Guarantor, the Trustee or any agent of
                 the Company, the Guarantor or the Trustee shall have any
                 responsibility or liability for any aspect of the records
                 relating to or payments made on account of beneficial ownership
                 interests in a Global Security or for maintaining, supervising
                 or reviewing any records relating to such beneficial ownership
                 interests.

    3.5   MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES

          If any mutilated Security is surrendered to the Trustee, the Company
          shall execute, the Guarantor shall endorse 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, the Guarantor shall endorse 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 compliance with the foregoing provisions.

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

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

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

                                    - 32 -
<PAGE>
    3.6   PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED

          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.

          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 3.6.1
          or 3.6.2 below:

          3.6.1  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 mailed, first-class
                 postage prepaid, to each Holder of Securities of such series at
                 his address as it appears in the Security Register, not less
                 than 10 days prior to such Special Record Date. Notice of the
                 proposed payment of such Defaulted Interest and the Special
                 Record Date therefor having been so mailed, such Defaulted
                 Interest shall be paid to the Persons in whose names the
                 Securities of such series (or their respective Predecessor
                 Securities) are registered at the close of business on such
                 Special Record Date and shall no longer be payable pursuant to
                 the following Clause 3.6.2.

          3.6.2  The Company may make payment of any Defaulted Interest on the
                 Securities of any series to the Persons in whose names the
                 Securities of such series (or their respective Predecessor
                 Securities) are registered in any other lawful manner not
                 inconsistent with the requirements of any securities exchange
                 on which such Securities may be listed, and upon such notice as
                 may be required by such exchange, if, after notice given by the
                 Company to the Trustee of the

                                    - 33 -
<PAGE>
                 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.

    3.7   PERSONS DEEMED OWNERS

          Prior to due surrender of a Security for registration of transfer, the
          Company, the Guarantor, the Trustee and any agent of the Company, the
          Guarantor 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 premium, if any) and
          (subject to Section 3.6) interest on such Security and for all other
          purposes whatsoever, whether or not such Security be overdue, and
          neither the Company, the Guarantor, the Trustee nor any agent of the
          Company, the Guarantor or the Trustee shall be affected by notice to
          the contrary.

    3.8   CANCELLATION

          All Securities surrendered for payment, redemption, repurchase,
          registration of transfer or exchange shall, if surrendered to any
          Person other than the Trustee, be delivered to the Trustee and shall
          be promptly canceled 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 canceled by the Trustee.
          No Securities shall be authenticated in lieu of or in exchange for any
          Securities canceled as provided in this Section, except as expressly
          permitted by this Indenture. All canceled Securities held by the
          Trustee shall be disposed of as directed by a Company Order.

    3.9   COMPUTATION OF INTEREST

          Unless otherwise specified under Section 3.1 with respect to the
          Securities of a particular series, interest on the Securities shall be
          computed on the basis of a 360-day year of twelve 30-day months.

    3.10  CUSIP OR "ISIN" NUMBERS

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

                                    - 34 -
<PAGE>
4   SATISFACTION AND DISCHARGE

    4.1   SATISFACTION AND DISCHARGE OF INDENTURE

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

          4.1.1  either

                 (i)  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 3.5 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 10.3) have been delivered to the Trustee for
                      cancellation; or

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

                      (a)  have become due and payable, or

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

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

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

          4.1.3  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 and the Guarantor to the Trustee under
          Section 6.7, the obligations of the Company and the Guarantor to any
          Authenticating Agent under Section 6.14 and, if money shall have been
          deposited with the Trustee pursuant to subclause (ii) of Clause

                                    - 35 -

<PAGE>
          4.1.1  of this Section, the obligations of the Trustee under Section
          4.2 and the last paragraph of Section 10.3 shall survive such
          satisfaction and discharge.

    4.2   APPLICATION OF TRUST MONEY

          Subject to the provisions of the last paragraph of Section 10.3, all
          money deposited with the Trustee pursuant to Section 4.1 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 premium, if any) and interest for whose
          payment such money has been deposited with the Trustee.

5   REMEDIES

    5.1   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) shall have
          occurred and be continuing:

          5.1.1  a failure to pay any interest (or Additional Amounts, if any)
                 on any of the Securities on the date when due and such failure
                 shall continue for a period of 30 days;

          5.1.2  a failure to pay any principal or premium, if any, (or
                 Additional Amounts, if any) on any of the Securities on the
                 date when due;

          5.1.3  any default or event of default by the Company or the Guarantor
                 or any Significant Subsidiary occurring and continuing under
                 any agreement, instrument or other document evidencing
                 outstanding Indebtedness in excess of $50,000,000 in aggregate
                 (or its equivalent in other currencies) and such default or
                 event of default results in the actual acceleration of such
                 Indebtedness;

          5.1.4  the Company or the Guarantor shall fail to perform or observe
                 any other material covenant or agreement in respect of the
                 Securities contained in this Indenture or in a supplemental
                 indenture (other than a covenant which has been expressly
                 included in this Indenture solely for the benefit of series of
                 Securities other than that series) and such failure shall
                 continue for a period of 30 days after it occurs; or

          5.1.5  the entry by a court having jurisdiction in the premises of (A)
                 a decree or order for relief in respect of the Company, the
                 Guarantor or any Significant Subsidiary in an involuntary case
                 or proceeding under any applicable bankruptcy, insolvency,
                 suspension of payments, reorganization or other similar law, or
                 (B) a decree or order adjudging the Company, the Guarantor or
                 any Significant Subsidiary a bankrupt or insolvent, or
                 suspending payments, or approving as

                                    - 36 -
<PAGE>
                 properly filed a petition seeking reorganization, arrangement,
                 adjustment or composition of or in respect of the Company, the
                 Guarantor or any Significant Subsidiary under any applicable
                 law, or appointing a custodian, receiver, liquidator, assignee,
                 trustee, sequestrator or other similar official of the Company,
                 the Guarantor or any Significant Subsidiary or of any
                 substantial part of the property of the Company, the Guarantor
                 or any Significant Subsidiary, or ordering the winding up or
                 liquidation of the affairs of the Company, the Guarantor or any
                 Significant Subsidiary, 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 60 consecutive days; or

          5.1.6  the commencement by the Company, the Guarantor or any
                 Significant Subsidiary of a voluntary case or proceeding under
                 any applicable 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 the
                 Company, the Guarantor or any Significant Subsidiary to the
                 entry of a decree or order for relief in respect of the
                 Company, the Guarantor or any Significant Subsidiary in an
                 involuntary case or proceeding under any applicable bankruptcy,
                 insolvency, suspension of payments, reorganization or other
                 similar law or to the commencement of any bankruptcy or
                 insolvency case or proceeding against the Company, the
                 Guarantor or any Significant Subsidiary, or the filing by the
                 Company, the Guarantor, or any Significant Subsidiary of a
                 petition or answer or consent seeking reorganization or relief
                 under any applicable law or the consent by the Company, the
                 Guarantor or any Significant Subsidiary to the filing of such
                 petition or to the appointment of or taking possession by a
                 custodian, receiver, liquidator, assignee, trustee,
                 sequestrator or similar official of the Company, the Guarantor
                 or any Significant Subsidiary or of any substantial part of the
                 property of the Company, the Guarantor or any Significant
                 Subsidiary, or the making by the Company, the Guarantor or any
                 Significant Subsidiary of an assignment for the benefit of
                 creditors, or the admission by the Company, the Guarantor or
                 any Significant Subsidiary in writing of its inability to pay
                 its debts generally as they become due or the taking of
                 corporate action by the Company, the Guarantor or any
                 Significant Subsidiary in furtherance of any such action
                 (evidenced by the adoption of a corporate resolution in favor
                 of any such actions or an action of any of the officers of the
                 Company, the Guarantor or such Significant Subsidiary that
                 similarly binds the Company, the Guarantor or such Significant
                 Subsidiary, as the case may be), or the general inability of
                 the Company, the Guarantor or any Significant Subsidiary to
                 make payment of their obligations as they come due.

    5.2   ILLEGALITY EVENTS

          "ILLEGALITY EVENT", wherever used herein with respect to Securities of
          any series, means any one of the following events (whatever the reason
          for such Illegality Event 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) shall have
          occurred and be continuing:

                                    - 37 -
<PAGE>
          5.2.1  any governmental authorization necessary for the performance of
                 any obligation of the Company or the Guarantor under this
                 Indenture or the Securities fails to enter into or come into
                 full force and effect or remain in full force and effect;

          5.2.2  it is or will become unlawful for the Company or the Guarantor
                 to perform or comply with any one or more of its obligations
                 under any of the Securities; or

          5.2.3  any event occurs which under the laws of Brazil or the Cayman
                 Islands has an analogous effect to any of the events referred
                 to in paragraph 5.2.1 above.

    5.3   ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT

          If an Event of Default or Illegality Event with respect to any series
          of Securities (other than those Events of Default in Sections 5.1.5
          and 5.1.6 insofar as they relate to the Company and the Guarantor but
          not to a Significant Subsidiary of the Guarantor), occurs and is
          continuing, then and in every such case, including an Event of Default
          in Sections 5.1.5 and 5.1.6 relating to a Significant Subsidiary of
          the Guarantor, the Trustee shall, at the written request of the
          Holders of not less than 25% in principal amount of the Outstanding
          Securities of that series, by notice in writing to the Company,
          declare the principal of all the Securities to be due and payable
          immediately, and upon any such declaration such principal and any
          accrued interest and any unpaid Additional Amounts thereon shall
          become immediately due and payable. If an Event of Default specified
          in Sections 5.1.5 and 5.1.6 occurs and is continuing with respect to
          the Company or the Guarantor (but not a Significant Subsidiary of the
          Guarantor), the principal and any accrued interest, together with any
          Additional Amounts thereon, on all of the Securities of that series
          then Outstanding shall automatically, and without any declaration or
          other action on the part of the Trustee or any Holder, become
          immediately due and payable.

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

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

                 (i)    all overdue interest and any Additional Amounts thereon
                        on all of the Securities of that series,

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

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

                 (iv)   all sums paid or advanced by the Trustee hereunder and
                        all amounts owing the Trustee under Section 6.7;

                                    - 38 -
<PAGE>
          and

          5.3.2  all Events of Default or Illegality Events, other than the
                 non-payment of the principal of Securities which have become
                 due solely by such declaration of acceleration, have been cured
                 or waived as provided in Section 5.14.

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

    5.4   COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE The
          Company covenants that if

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

          5.4.2  default is made in the payment of the principal (including any
                 Redemption Price or Repurchase Price) 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 borne by (or prescribed therefor
          in) such Securities, together with any Additional Amounts thereon,
          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, and all amounts due the Trustee under
          Section 6.7.

          If an Event of Default or Illegality Event 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 that 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.

    5.5   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

                                    - 39 -
<PAGE>
          shall consent to the making of such payments directly to the Holders,
          to pay to the Trustee any amount due it for the reasonable
          compensation, expenses, disbursements and advances of the Trustee, its
          agents and counsel, and any other amounts due the Trustee under
          Section 6.7.

          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.

    5.6   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.

    5.7   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 6.7;

                 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:  Any remaining amounts shall be repaid to the Company.

    5.8   LIMITATION ON SUITS

          No Holder of any Securities 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

          5.8.1  such Holder has previously given written notice to the Trustee
                 of a continuing Event of Default or Illegality Event with
                 respect to the Securities of that series;

                                    - 40 -
<PAGE>
          5.8.2  the Holders of not less than 25% in principal amount of the
                 Outstanding Securities of that series shall have made written
                 request to the Trustee to institute proceedings in respect of
                 such Event of Default or Illegality Event in its own name as
                 Trustee hereunder;

          5.8.3  such Holder or Holders have offered to the
                 Trustee indemnity reasonably satisfactory to the Trustee
                 against the costs, expenses and liabilities to be incurred in
                 compliance with such request;

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

          5.8.5  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.

    5.9   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 3.6) interest on such Security on the
          respective Stated Maturities expressed in such Security (or, in the
          case of redemption or repurchase, on the Redemption Date or Repurchase
          Date, as the case may be), and to institute suit for the enforcement
          of any such payment, and such rights shall not be impaired without the
          consent of such Holder.

    5.10  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 Guarantor, 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.

    5.11  RIGHTS AND REMEDIES CUMULATIVE

          Except as otherwise provided with respect to the replacement or
          payment of mutilated, destroyed, lost or stolen Securities in the last
          paragraph of Section 3.5, 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

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<PAGE>
          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.

    5.12  DELAY OR OMISSION NOT WAIVER

          No delay or omission of the Trustee or of any Holder of any Security
          to exercise any right or remedy accruing upon any Event of Default or
          Illegality Event shall impair any such right or remedy or constitute a
          waiver of any such Event of Default or Illegality Event 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.

    5.13  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

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

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

          5.13.3  subject to the provisions of Section 6.1, the Trustee shall
                  have the right to decline to follow any such direction if the
                  Trustee in good faith shall, by a Responsible Officer or
                  Officers of the Trustee, determine that the proceeding so
                  directed would involve the Trustee in personal liability
                  against which indemnity would not be satisfactory.

    5.14  WAIVER OF PAST DEFAULTS

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

          5.14.1  in the payment of the principal of or any premium or interest
                  on any Security of such series, or

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

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

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<PAGE>
    5.15  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, including reasonable attorneys' fees and
          expenses, 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, the Guarantor, or the Trustee or
          in any suit to require the Company to repurchase any Security in
          accordance with its terms.

    5.16  WAIVER OF USURY, STAY OR EXTENSION LAWS

          Each of the Company and the Guarantor covenants (to the extent that it
          may lawfully do so) that it will not at any time insist upon, or
          plead, or in any manner whatsoever claim or take the benefit or
          advantage of, any usury, stay or extension law wherever enacted, now
          or at any time hereafter in force, which may affect the covenants or
          the performance of this Indenture; and each of the Company and the
          Guarantor (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.

6   THE TRUSTEE

    6.1   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 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. The
          Trustee shall deliver a copy of all notices, documents, certificates
          and other items (including reports and opinions) received or delivered
          pursuant to this Indenture to Moody's. The agreement of the Trustee
          made in the preceding sentence has been made as a matter of courtesy
          and accommodation only and the Trustee shall not be liable to any
          Person for its failure to comply with the agreement contained therein.

    6.2   NOTICE OF DEFAULT; POTENTIAL DEFAULT

          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 (a "NOTICE OF DEFAULT"). Specifically, the Trustee
          shall provide Notice of Default to each Holder promptly, but in no
          event later than within

                                    - 43 -
<PAGE>
          15 days of occurrence, and in the manner provided by Section 313(c) of
          the Trust Indenture Act or any successor section thereto, of any
          default of which the Trustee is aware. The Trustee shall also provide
          a notice to each Holder of any claim of default within 30 days of
          receiving a written assertion of such claim from Holders of no less
          than 10% of the aggregate principal amount of Notes then outstanding.
          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 or Illegality Event with respect to Securities of
          such series. If on the Business Day prior to an Interest Payment Date
          the Company has not deposited with the Trustee funds sufficient to pay
          the interest due on the next Interest Payment Date, then the Trustee
          shall provide written notice to the Guarantor of such failure.

    6.3   CERTAIN RIGHTS OF TRUSTEE

          Subject to the provisions of Section 6.1:

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

          6.3.2  any request or direction of the Company mentioned herein shall
                 be sufficiently evidenced by a Company Request or Company Order
                 and any resolution of the Board of Directors may be
                 sufficiently evidenced by a Board Resolution. Any request or
                 direction of the Guarantor mentioned herein shall be
                 sufficiently evidenced by a written request or direction signed
                 on behalf of the Guarantor by any two of its Directors or its
                 attorneys in fact in accordance with its Bylaws;

          6.3.3  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;

          6.3.4  the Trustee may consult with counsel of its own choice 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;

          6.3.5  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 security
                 or indemnity satisfactory to it against the costs, expenses and
                 liabilities which might be incurred by it in compliance with
                 such request or direction;

          6.3.6  the Trustee shall not be bound to make any investigation into
                 the facts or matters stated in any resolution, certificate,
                 statement, instrument, opinion,

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<PAGE>
                 report, notice, request, direction, consent, order, bond,
                 debenture, note, other evidence of indebtedness or other paper
                 or document in connection with this Indenture, but the Trustee,
                 in its discretion, may make such further inquiry or
                 investigation into such facts or matters as it may see fit,
                 and, if the Trustee shall determine to make such further
                 inquiry or investigation, it shall be entitled to examine the
                 books, records and premises of the Company, personally or by
                 agent or attorney and shall incur no liability or additional
                 liability of any kind by reason of such inquiry or
                 investigation;

          6.3.7  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;
                 PROVIDED that the Trustee shall be required to terminate any
                 such agent if it has actual knowledge of any wilful or
                 negligent failure by such agent to perform its delegated
                 duties; and

          6.3.8  the Trustee shall not be deemed to have notice of any default
                 or Event of Default or Illegality Event unless a Responsible
                 Officer of the Trustee has actual knowledge thereof or unless
                 written notice of any event which is in fact such a default,
                 Event of Default or Illegality Event is received by the Trustee
                 at the Corporate Trust Office of the Trustee from the Company,
                 the Guarantor or any Holder, and such notice references the
                 Securities and this Indenture.

    6.4   NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES

          Neither the Trustee nor any Authenticating Agent assume any
          responsibility for the correctness of the recitals contained herein
          and in the Securities, except the Trustee's certificates of
          authentication. 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 or the Guarantor of
          Securities or the proceeds thereof.

    6.5   MAY HOLD SECURITIES

          The Trustee, any Authenticating Agent, any Paying Agent, any Security
          Registrar or any other agent of the Company or the Guarantor, in its
          individual or any other capacity, may become the owner or pledgee of
          Securities and, subject to Sections 6.8 and 6.13, may otherwise deal
          with the Company and the Guarantor with the same rights it would have
          if it were not Trustee, Authenticating Agent, Paying Agent, Security
          Registrar or such other agent.

    6.6   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.

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<PAGE>
    6.7   COMPENSATION AND REIMBURSEMENT

          6.7.1  The Company and the Guarantor agree to pay to the Trustee from
                 time to time such compensation as shall be agreed in writing
                 between the parties 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).

          6.7.2  The Company and the Guarantor agree, except as otherwise
                 expressly provided herein, to reimburse the Trustee upon its
                 request for all reasonable and itemized expenses, disbursements
                 and advances incurred or made by the Trustee in accordance with
                 any provision of this Indenture (including the reasonable
                 compensation and the expenses and disbursements of its agents
                 and counsel), except any such expense, disbursement or advance
                 as may be attributable to its negligence or willful misconduct.

          6.7.3  The Guarantor agrees to fully indemnify each of the Trustee and
                 any predecessor Trustee for, and to hold it harmless against,
                 any and all losses, liabilities, damages, claims or expenses
                 incurred without negligence or willful misconduct 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
                 (whether asserted by the Company, a Holder or any other Person)
                 or liability in connection with the exercise or performance of
                 any of its powers or duties hereunder.

          When the Trustee incurs expenses or renders services in connection
          with an Event of Default specified in Section 5.1.5 or Section 5.1.6,
          the expenses (including the reasonable 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.

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

          The provisions of this Section shall survive the satisfaction and
          discharge of this Indenture.

    6.8   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 the Trust Indenture 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.

                                    - 46 -
<PAGE>
    6.9   CORPORATE TRUSTEE REQUIRED; ELIGIBILITY

          There shall at all times be one (and only one) Trustee hereunder with
          respect to the Securities of each series, which may be a Trustee
          hereunder for Securities of one or more other series. Each Trustee
          shall be a Person that (i) is eligible pursuant to the Trust Indenture
          Act to act as such, (ii) has a combined capital and surplus of at
          least $100,000,000, (iii) is subject to supervision or examination by
          Federal or State authority, (iv) has a long-term unsecured debt rating
          with respect to U.S. dollar obligations of at least A2 or its
          equivalent rating by Moody's and (v) has its Corporate Trust Office in
          the United States. 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.

    6.10  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 6.11.

          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 6.11 shall not have been delivered to the Trustee within 45
          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:

          6.10.1  the Trustee shall fail to comply with Section 6.8 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

          6.10.2  the Trustee shall cease to be eligible under Section 6.9 and
                  shall fail to resign after written request therefor by the
                  Company or by any such Holder, or

          6.10.3  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 5.15, any Holder who has

                                    - 47 -
<PAGE>
          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 6.11. If, within one year after
          such resignation, removal or incapability, or the occurrence of such
          vacancy, a successor Trustee with respect to the Securities of any
          series shall be appointed by Act of the Holders of a majority in
          principal amount of the Outstanding Securities of such series
          delivered to the Company and the retiring Trustee, the successor
          Trustee so appointed shall, forthwith upon its acceptance of such
          appointment in accordance with the applicable requirements of Section
          6.11, become the successor Trustee with respect to the Securities of
          such series and to that extent supersede the successor Trustee
          appointed by the Company. If no successor Trustee with respect to the
          Securities of any series shall have been so appointed by the Company
          or the Holders and accepted appointment in the manner required by
          Section 6.11, any Holder who has been a bona fide Holder of a Security
          of such series for at least six months may, on behalf of himself and
          all others similarly situated, petition any court of competent
          jurisdiction for the appointment of a successor Trustee with respect
          to the Securities of such series.

          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 1.6. Each notice shall include the name of the
          successor Trustee with respect to the Securities of such series and
          the address of its Corporate Trust Office.

    6.11  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.

                                    - 48 -
<PAGE>
          In case of the appointment hereunder of a successor Trustee with
          respect to the Securities of one or more (but not all) series, the
          Company, the retiring Trustee and each successor Trustee with respect
          to the Securities of one or more series shall execute and deliver an
          indenture supplemental hereto wherein each successor Trustee shall
          accept such appointment and which (1) shall contain such provisions as
          shall be necessary or desirable to transfer and confirm to, and to
          vest in, each successor Trustee all the rights, powers, trusts and
          duties of the retiring Trustee with respect to the Securities of that
          or those series to which the appointment of such successor Trustee
          relates, (2) if the retiring Trustee is not retiring with respect to
          all Securities, shall contain such provisions as shall be deemed
          necessary or desirable to confirm that all the rights, powers, trusts
          and duties of the retiring Trustee with respect to the Securities of
          that or those series as to which the retiring Trustee is not retiring
          shall continue to be vested in the retiring Trustee, and (3) shall add
          to or change any of the provisions of this Indenture as shall be
          necessary to provide for or facilitate the administration of the
          trusts hereunder by more than one Trustee, it being understood that
          nothing herein or in such supplemental indenture shall constitute such
          Trustees co-trustees of the same trust and that each such Trustee
          shall be trustee of a trust or trusts hereunder separate and apart
          from any trust or trusts hereunder administered by any other such
          Trustee; and upon the execution and delivery of such supplemental
          indenture the resignation or removal of the retiring Trustee shall
          become effective to the extent provided therein and each such
          successor Trustee, without any 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.

    6.12  MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS

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

                                    - 49 -
<PAGE>
          authentication and deliver the Securities so authenticated with the
          same effect as if such successor Trustee had itself authenticated such
          Securities.

    6.13  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).

    6.14  APPOINTMENT OF AUTHENTICATING AGENT

          The Trustee may appoint an Authenticating Agent or Agents which shall
          be authorized to act on behalf of the Trustee to authenticate
          Securities issued upon original issue and upon exchange, registration
          of transfer, or partial redemption or pursuant to Section 3.5, and
          Securities so authenticated shall be entitled to the benefits of this
          Indenture and shall be valid and obligatory for all purposes as if
          authenticated by the Trustee hereunder. Wherever reference is made in
          this Indenture to the authentication and delivery of Securities by the
          Trustee or the Trustee's certificate of authentication, such reference
          shall be deemed to include authentication and delivery on behalf of
          the Trustee by an Authenticating Agent and a certificate of
          authentication executed on behalf of the Trustee by an Authenticating
          Agent. Each Authenticating Agent shall be acceptable to the Company
          and shall at all times be a corporation organized and doing business
          under the laws of the United States, any State thereof or the District
          of Columbia, authorized under such laws to act as Authenticating
          Agent, have a combined capital and surplus of at least $100,000,000,
          be subject to supervision or examination by Federal or State authority
          and have a long-term unsecured debt rating with respect to U.S. dollar
          obligations of at least A2 or its equivalent rating by Moody's. If
          such Authenticating Agent publishes reports of condition at least
          annually, pursuant to law or to the requirements of said supervising
          or examining authority, then for the purposes of this Section, the
          combined capital and surplus of such Authenticating Agent shall be
          deemed to be its combined capital and surplus as set forth in its most
          recent report of condition so published. If at any time an
          Authenticating Agent shall cease to be eligible in accordance with the
          provisions of this Section, such Authenticating Agent shall resign
          immediately in the manner and with the effect specified in this
          Section.

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

          An Authenticating Agent may resign at any time by giving written
          notice thereof to the Trustee and to the Company. The Trustee may at
          any time terminate the agency of an Authenticating Agent by giving
          written notice thereof to such Authenticating Agent and to the
          Company. Upon receiving such a notice of resignation or upon such a
          termination,

                                    - 50 -
<PAGE>
          or in case at any time such Authenticating Agent shall cease to be
          eligible in accordance with the provisions of this Section, the
          Trustee may appoint a successor Authenticating Agent which shall be
          acceptable to the Company and shall mail written notice of such
          appointment by first-class mail, postage prepaid, to all Holders as
          their names and addresses appear in the Security Register. Any
          successor Authenticating Agent upon acceptance of its appointment
          hereunder shall become vested with all the rights, powers and duties
          of its predecessor hereunder, with like effect as if originally named
          as an Authenticating Agent. No successor Authenticating Agent shall be
          appointed unless eligible under the provisions of this Section.

          The Company and the Guarantor agree to pay to each Authenticating
          Agent from time to time reasonable compensation for its services under
          this Section.

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

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

          JPMorgan Chase Bank,
          as Trustee

          By: ____________________________
              as Authenticating Agent

          By: ____________________________
              Authorized Officer

    6.15  APPOINTMENT OF LUXEMBOURG TRANSFER AGENT

          For so long as the rules of the Luxembourg Stock Exchange so require,
          the Company and the Guarantor shall appoint and maintain a transfer
          agent located in Luxembourg with respect to Securities listed on the
          Luxembourg Stock Exchange.

          The Company and the Guarantor agree to pay to each such agent from
          time to time reasonable compensation for its services under this
          Section.

    6.16  TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY

          Any application by the Trustee for written instructions from the
          Company may, at the option of the Trustee, set forth in writing any
          action proposed to be taken or omitted by the Trustee under this
          Indenture and the date on and/or after which such action shall be
          taken or such omission shall be effective. The Trustee shall not be
          liable for any action taken by, or omission of, the Trustee in
          accordance with a proposal included in such application on or after
          the date specified in such application (which date shall not be less
          than five Business Days after the date any officer of the Company
          actually receives such application, unless any such officer shall have
          consented in writing to any earlier date) unless prior to taking any
          such action (or the effective date in the case of an omission), the
          Trustee shall have received written instructions in response to such
          application specifying the action to be taken or omitted.

                                    - 51 -
<PAGE>

7    HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

     7.1    COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS

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

            7.1.1    semi-annually, not more than 15 days after each Regular
                     Record Date with respect to each series of Securities, a
                     list, in such form as the Trustee may reasonably require,
                     of the names and addresses of the Holders of Securities of
                     such series as of such Regular Record Date, and

            7.1.2    at such other times as the Trustee may reasonably 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.

     7.2    PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS

            7.2.1    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 7.1 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 7.1 upon receipt of a new list so
                     furnished.

            7.2.2    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 duties of
                     the Trustee, shall be as provided by the Trust Indenture
                     Act.

            7.2.3    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.

     7.3    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 sixty days after each
            March 8 following the date of this Indenture deliver to Holders a
            brief report, dated as of such March 8, 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 (unless at the
            time no Outstanding Securities have been registered with the

                                     - 52 -

<PAGE>
            Commission pursuant to the Securities Act) and with the Company. The
            Company will promptly notify the Trustee when any Securities are
            listed on any stock exchange.

8    CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

     8.1    COMPANY AND GUARANTOR MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS

            Neither the Company nor the Guarantor shall, without the consent of
            the Holders of a majority in aggregate principal amount of the
            Securities in accordance with this Indenture, consolidate with or
            merge into any other corporation or (x) in the case of the Company,
            convey or transfer all or substantially all of its properties or
            assets to any other Person or (y) in the case of the Guarantor,
            convey or transfer all or substantially all of its mining properties
            or assets to any other Person, unless:

            8.1.1    the corporation formed by such consolidation or into which
                     the Company or Guarantor is merged or the Person which
                     acquires by conveyance or transfer all or substantially all
                     of the properties or assets of the Company or all or
                     substantially all of the mining properties or assets of the
                     Guarantor (the "Successor Corporation") shall expressly
                     assume, pursuant to this Indenture, the due and punctual
                     repayment of the principal and interest on all the
                     Securities and all other obligations of the Company or the
                     Guarantor, as applicable, under the Indenture and the
                     Securities;

            8.1.2    immediately after giving effect to such transaction, no
                     Event of Default or Illegality Event with respect to any
                     Security shall have occurred and be continuing;

            8.1.3    the Company and the Guarantor have delivered to the Trustee
                     (a) a certificate signed by an executive officer of the
                     Company and an executive officer of the Guarantor stating
                     that such consolidation, merger, conveyance or transfer
                     complies with this Article and that all conditions
                     precedent herein provided, which relate to such
                     transaction, have been complied with and (b) an Opinion of
                     Counsel of recognized standing as to the legal issues
                     relating thereto; and

            8.1.4    the Successor Corporation shall expressly agree to withhold
                     against any tax, duty, assessment or other governmental
                     charge thereafter imposed or levied by Brazil, the Cayman
                     Islands, a Successor Jurisdiction or any political
                     subdivision or authority thereof or therein having power to
                     tax as a consequence of such consolidation, merger,
                     conveyance or transfer with respect to the payment of
                     principal of or interest on the Securities, and to pay such
                     Additional Amounts as may be necessary to ensure that the
                     net amounts receivable by Holders after any withholding or
                     deduction of any such tax, assessment, duty or other
                     governmental charge shall equal the respective amounts of
                     principal, premium (if any) and interest which would have
                     been receivable in respect of the Securities in the absence
                     of such consolidation, merger, conveyance or transfer;
                     provided, however, that Holders will not be subject to the
                     exceptions and limitations contained in Section 10.7 in
                     relation to the Successor Jurisdiction.

                                     - 53 -
<PAGE>
     8.2    SUCCESSOR SUBSTITUTED

            Upon any consolidation, merger, conveyance, or transfer in
            accordance with this Article, the Successor Corporation shall
            succeed to, and be substituted for, and may exercise every right and
            power of the Company or the Guarantor, as applicable, under the
            Securities with the same effect as if the Successor Corporation had
            been named as the issuer or guarantor of the Securities herein.

     8.3    RIGHT TO REDEMPTION

            No Successor Corporation shall have the right to redeem the
            Securities unless the Company and the Guarantor would have been
            entitled to redeem the Securities in similar circumstances.

9    SUPPLEMENTAL INDENTURES

     9.1    SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS

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

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

            9.1.2    to add to the covenants of the Company or the Guarantor 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 the Guarantor; or

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

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

            9.1.5    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

                                     - 54 -

<PAGE>
                     respect to such provision or (B) shall become effective
                     only when there is no such Security Outstanding; or

            9.1.6    to secure the Securities pursuant to the requirements of
                     Article Ten or otherwise; or

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

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

            9.1.9    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 9.1.9 shall not adversely affect the interests
                     of the Holders of Securities of any series in any material
                     respect; or

            9.1.10   to issue an unlimited amount of 2007 Notes pursuant to the
                     First Supplemental Indenture, to issue an unlimited amount
                     of "Exchange Securities" contemplated by the Registration
                     Rights Agreement and to comply with the obligations of the
                     Company and the Guarantor thereunder.

     9.2    SUPPLEMENTAL INDENTURES OR WAIVER WITH CONSENT OF HOLDERS

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

            9.2.1    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 any
                     Security that would be due and payable upon a declaration
                     of acceleration of the Maturity thereof pursuant to Section
                     5.3, or modify in any way the Company's or the Guarantor's
                     obligation to pay Additional Amounts pursuant to Section
                     10.7 or change any Place of Payment where, or the coin or
                     currency in which, any Security or any premium or interest
                     thereon is payable, or impair the right to institute suit
                     for the

                                     - 55 -
<PAGE>
                     enforcement of any such payment on or after the Stated
                     Maturity thereof (or, in the case of redemption, or
                     repurchase on or after the Redemption Date or Repurchase
                     Date), or

            9.2.2    change the terms of payment from, or control over, or
                     release or reduce any collateral or security interest that
                     may be created or provided pursuant to Section 10.6 or any
                     supplemental indenture to secure the payment of principal,
                     interest or premium, if any, under any Security, except as
                     allowed under the terms of any such supplemental indenture,
                     or

            9.2.3    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

            9.2.4    modify any of the provisions of this Section, Section 5.14
                     or Section 10.9, 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 10.9, or the deletion of this
                     proviso, in accordance with the requirements of Section
                     6.11.

            A supplemental indenture or waiver 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 or waiver, but it shall be sufficient if such Act shall
            approve the substance thereof.

     9.3    EXECUTION OF SUPPLEMENTAL INDENTURES

            In executing, or accepting the additional trusts created by, any
            supplemental indenture or waiver 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 6.1)
            shall be fully protected in relying upon, an Opinion of Counsel
            stating that the execution of such supplemental indenture or waiver
            is authorized or permitted by this Indenture. The Trustee may, but
            shall not be obligated to, enter into any such supplemental
            indenture or waiver which affects the Trustee's own rights, duties
            or immunities under this Indenture or otherwise.

                                     - 56 -

<PAGE>
     9.4    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.

     9.5    CONFORMITY WITH TRUST INDENTURE ACT

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

     9.6    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.

     9.7    EFFECT OF WAIVER

            A waiver shall be effective to waive compliance with the particular
            provision and for the particular instance for which the waiver was
            made and, until such waiver shall become effective, the obligations
            of the Company or the Guarantor and the duties of the Trustee in
            respect of any such provision shall remain in full force and effect.

     9.8    NOTICE TO LUXEMBOURG STOCK EXCHANGE

            So long as any Securities of a series are listed on the Luxembourg
            Stock Exchange, the Company shall give notice to the Luxembourg
            Stock Exchange of any supplemental indenture or waiver of any
            covenant in regards such series effected pursuant to this Article 9.

10   COVENANTS

     10.1   PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST The Company will duly and
            punctually pay the principal of and any premium and interest
            (together with any Additional Amounts payable thereon) on the
            Securities in accordance with the terms of the Securities and this
            Indenture.

     10.2   MAINTENANCE OF OFFICE OR AGENCY

            With respect to any Global Security, and except as otherwise may be
            specified for such Global Security as contemplated by Section 3.1,
            the Corporate Trust Office of the Trustee shall be the Place of
            Payment where such Global Security may be presented or surrendered
            for payment or for registration of transfer or exchange, or where
            successor

                                     - 57 -
<PAGE>
            Securities may be delivered in exchange therefor; PROVIDED, HOWEVER,
            that any such payment, presentation, surrender or delivery effected
            pursuant to the Applicable Procedures of the Depositary for such
            Global Security shall be deemed to have been effected at the Place
            of Payment for such Global Security in accordance with the
            provisions of this Indenture.

            With respect to any Securities that are not in the form of a Global
            Security, the Company will maintain in the Borough of Manhattan, The
            City of New York, an office or agency where Securities may be
            presented or surrendered for payment, where Securities may be
            surrendered for registration of transfer or exchange, and where
            notices and demands to or upon the Company in respect of the
            Securities (in this case, without regard to the form of the
            Securities) 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 (in or outside the Borough of Manhattan, the
            City of New York) where the Securities of one or more series,
            notices and other items 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 the Borough of Manhattan, The
            City of New York 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.

     10.3   MONEY FOR SECURITY 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 the business day prior to each due
            date of the principal of or any premium or interest on any
            Securities of that series, deposit in Dollars with a Paying Agent in
            New York, New York 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

<PAGE>
            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 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 and the
            Guarantor for payment thereof, and all liability of the Trustee or
            such Paying Agent with respect to such trust money, and all
            liability of the Company as trustee thereof, shall thereupon cease;
            PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before
            being required to make any such repayment, may, at the expense of
            the Company, cause to be published once, in a newspaper published in
            the English language, customarily published on each Business Day and
            of general circulation in The City of New York, 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.

     10.4   STATEMENT BY OFFICERS AS TO DEFAULT

            The Company and the Guarantor will deliver to the Trustee, within
            120 days after the end of each fiscal year of the Company ending
            after the date hereof, an Officers' Certificate, stating whether or
            not to the best knowledge of the signers thereof the Company or the
            Guarantor 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 or the Guarantor shall be in default,
            specifying all such defaults and the nature and status thereof of
            which they may have knowledge.

            The Company and the Guarantor will deliver to the Trustee, as soon
            as possible and in any event within 15 days after the Company or the
            Guarantor becomes aware of the occurrence of any Event of Default or
            Illegality Event or an event which, with notice or the lapse of time
            or both, would constitute an Event of Default or Illegality Event,
            an

                                     - 59 -

<PAGE>
            Officers' Certificate setting forth the details of such Event of
            Default or Illegality Event or default and the action which the
            Company proposes to take with respect thereto.

     10.5   REPORTS BY COMPANY AND GUARANTOR

            The Company (unless at the time no Outstanding Securities have been
            registered with the Commission pursuant to the Securities Act) and
            the Guarantor 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.

            Notwithstanding that the Guarantor may not be required to remain
            subject to the reporting requirements of Section 12, 13 or 15(d) of
            the Exchange Act, the Guarantor will continue to file with the
            Commission and provide the Trustee with such annual reports and such
            information, documents and other reports (or copies of such portions
            of any of the foregoing as the Commission may by rules and
            regulations prescribe) which are specified in Sections 12, 13 and
            15(d) of the Exchange Act.

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

     10.6   LIMITATION ON LIENS

            Neither the Company nor the Guarantor will create, incur, issue or
            assume any Indebtedness secured by any Lien, other than a Permitted
            Lien, without in any such case effectively providing that the
            Securities (together with, if the Company or Guarantor shall so
            determine, any other indebtedness of the Company or Guarantor) shall
            be secured equally and ratably with or prior to such secured
            Indebtedness.

            For the purposes of this Section, the (i) giving of a guarantee
            which is secured by a Lien upon or in respect of any asset of the
            Company or the Guarantor, and (ii) the creation of a Lien upon or in
            respect of any asset of the Company or the Guarantor to secure
            Indebtedness which existed prior to the creation of such Lien, shall
            be deemed to involve the incurrence of Indebtedness in an amount
            equal to the principal amount of such Indebtedness effectively
            secured by such Lien.

     10.7   PAYMENT OF ADDITIONAL AMOUNTS

            10.7.1   All payments of principal, premium and interest in respect
                     of the Securities shall be made without withholding or
                     deduction for any present or future taxes, duties,
                     assessments or governmental charges of whatever nature
                     imposed, levied, collected, withheld or assessed by or on
                     behalf of the Cayman Islands, Brazil or any Successor
                     Jurisdiction or any authority therein or thereof having
                     power to tax ("FOREIGN TAXES"), except to the extent that
                     such Foreign Taxes are required by the Cayman Islands,
                     Brazil, such Successor Jurisdiction or any such authority
                     to be withheld or deducted. In the event of any withholding
                     or

                                    - 60 -
<PAGE>
                 deduction for any Foreign Taxes, the Company or the Guarantor,
                 as the case may be, shall pay such additional amounts
                 ("ADDITIONAL Amounts") as will result in receipt by the Holders
                 of Securities on the respective due dates of such amounts as
                 would have been received by them had no such withholding or
                 deduction (including for any Foreign Taxes payable in respect
                 of Additional Amounts) been required, except that no such
                 Additional Amounts shall be payable with respect to any payment
                 on a Security:

                 (i)    to, or to a third  party on behalf of, a Holder who is
                        liable for any such  taxes,  duties,  assessments or
                        other  governmental  charges which would not have been
                        imposed but for (A) a connection  between the Holder and
                        the Cayman  Islands or Brazil other than the mere
                        holding of such  Security  and the receipt of payments
                        with respect to  such   Security  or  (B)  failure  by
                        the Holder  to  comply  with  any certification,
                        identification or other reporting requirement
                        concerning the nationality,  residence,  identity  or
                        connection with the Cayman  Islands, Brazil or a
                        Successor Jurisdiction,  or applicable political
                        subdivision or authority  thereof  or  therein  having
                        power  to tax, of such  Holder,  if compliance  is
                        required by such Successor  Jurisdiction,  or any
                        political subdivision or  authority  thereof  or
                        therein  having  power  to tax as a precondition  to
                        exemption  from,  or reduction  in the rate  of,  the
                        tax, assessment  or other  governmental  charge  and the
                        Company  has  given the Holders at least 30 days'
                        notice  that  Holders will be required to provide such
                        certification, identification or other requirement;

                 (ii)   in respect of any such taxes,  duties,  assessments  or
                        other  governmental  charges  with  respect to a
                        Security  surrendered  (if surrender is required) more
                        than 30 days after the date on  which  such  payment
                        became  due and  payable  or the date on which payment
                        thereof is duly  provided for and notice  thereof  given
                        to Holders, whichever  occurs  later,  except  to the
                        extent  that  the  Holder  of such Security would have
                        been entitled to such Additional  Amounts on surrender
                        of such Security for payment on the last day of such
                        30-day period;

                 (iii)  in respect of estate, inheritance, gift, sales,
                        transfer, personal property or similar tax, assessment
                        or governmental charge imposed with respect to a
                        Security;

                 (iv)   in respect of any tax, assessment or other governmental
                        charge payable otherwise than by deduction or
                        withholding from payments on any series of Securities or
                        by direct payment by the Company or the Guarantor in
                        respect of claims made against the Company or the
                        Guarantor;

                 (v)    where such Additional Amount is imposed on a payment to
                        an individual and is required to be made pursuant to any
                        European Union Directive on the taxation of savings
                        implementing the conclusions of the

                                    - 61 -
<PAGE>
                        ECOFIN Council meeting of November 26-27, 2000 or any
                        law implementing or complying with, or introduced in
                        order to conform to, such directive; or

                  (vi)  in respect of any combination of the above.

                  For purposes of the provisions described in Clause (i) above,
                  the term "Holder" of any Security means the direct nominee of
                  any beneficial owner of such Security, which holds such
                  beneficial owner's interest in such Security. Notwithstanding
                  the foregoing, the limitations on the Company's or the
                  Guarantor's obligation to pay Additional Amounts set forth in
                  Clause (i) above shall not apply if the provision of
                  information, documentation or other evidence described in such
                  Clause (i) would be materially more onerous, in form, in
                  procedure or in the substance of information disclosed, to a
                  Holder or beneficial owner of a Security (taking into account
                  any relevant differences between U.S. and Cayman Islands or
                  Brazilian law, regulation or administrative practice) than
                  comparable information or other reporting requirements imposed
                  under U.S. tax law (including tax treaties between the United
                  States and the Cayman Islands or Brazil), regulation
                  (including proposed regulations) and administrative practice.

                  The Company or the Guarantor, as the case may be, shall
                  promptly provide the Trustee with documentation, if any,
                  (which may consist of certified copies of such documentation)
                  reasonably satisfactory to the Trustee evidencing the payment
                  of Foreign Taxes in respect of which the Company or the
                  Guarantor has paid any Additional Amounts. Copies of such
                  documentation shall be made available to the Holders of the
                  Securities or the Paying Agent, as applicable, upon request
                  therefor.

                  In respect of the Securities issued hereunder, at least 10
                  days prior to the first date of payment of interest on the
                  Securities and at least 10 days prior to each date, if any, of
                  payment of principal or interest thereafter if there has been
                  any change with respect to the matters set forth in the
                  below-mentioned Officers' Certificate, the Company and the
                  Guarantor shall furnish the Trustee and each Paying Agent with
                  an Officers' Certificate instructing the Trustee and such
                  Paying Agent as to whether such payment of principal of or any
                  interest on such Securities shall be made without deduction or
                  withholding for or on account of any tax, duty, assessment or
                  other governmental charge. If any such deduction or
                  withholding shall be required by the Cayman Islands or Brazil
                  or any Successor Jurisdiction or any authority therein having
                  power to tax, then such certificate shall specify, by country,
                  the amount, if any, required to be deducted or withheld on
                  such payment to Holders of such Securities, and the Company or
                  the Guarantor, as the case may be, (if payment is then due
                  under the Guaranty) shall pay or cause to be paid to the
                  Trustee or such Paying Agent Additional Amounts, if any,
                  required by this Section. The Company and the Guarantor agree
                  to indemnify the Trustee and each Paying Agent for, and to
                  hold them harmless against, any loss, liability or expense
                  reasonably incurred without negligence or bad faith on their
                  part arising out of

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<PAGE>
                  or in connection with actions taken or omitted by them in
                  reliance on any Officers' Certificate furnished pursuant to
                  this Section, the obligation of the Company and the Guarantor
                  to so indemnify being joint and several.

          10.7.2  The Company or the Guarantor, as the case may be, shall pay
                  all stamp, issue, registration, documentary or other similar
                  duties, if any, which may be imposed by the Cayman Islands or
                  Brazil or any other governmental entity or political
                  subdivision therein or thereof, or any taxing authority of or
                  in any of the foregoing, with respect to the Indenture or the
                  issuance of the Securities or the Guaranty.

          10.7.3  The Company or the Guarantor, as the case may be, shall
                  provide each Paying Agent and any withholding agent under
                  relevant tax regulations with copies of each certificate
                  received by the Company or the Guarantor from a Holder of a
                  Security pursuant to the text of such Security. Each such
                  Paying Agent and withholding agent shall retain each such
                  certificate received by it for as long as any Security is
                  outstanding and in no event for less than four years after its
                  receipt, and for such additional period thereafter, as set
                  forth in an Officers' Certificate, as such certificate may
                  become material in the administration of applicable tax laws.

          10.7.4  In the event that Additional Amounts actually paid with
                  respect to the Securities pursuant to the preceding paragraph
                  are based on rates of deduction or withholding of withholding
                  taxes in excess of the appropriate rate applicable to the
                  Holder of such Securities, and, as a result thereof, such
                  Holder is entitled to make claim for a refund or credit of
                  such excess from the authority imposing such withholding tax,
                  then such Holder shall, by accepting such Securities, be
                  deemed to have assigned and transferred all right, title, and
                  interest to any such claim for a refund or credit of such
                  excess to the Company or the Guarantor. However, by making
                  such assignment, the Holder makes no representation or
                  warranty that the Company or the Guarantor will be entitled to
                  receive such claim for a refund or credit and incurs no other
                  obligation with respect thereto.

          10.7.5  All references in this Indenture and the Securities to
                  principal, premium or interest in respect of any Security
                  shall be deemed to mean and include all Additional Amounts, if
                  any, payable in respect of such principal, premium or
                  interest, unless the context otherwise requires, and express
                  mention of the payment of Additional Amounts in any provision
                  hereof shall not be construed as excluding reference to
                  Additional Amounts in those provisions hereof where such
                  express mention is not made. All references in this Indenture
                  and the Securities to principal in respect of any Security
                  shall be deemed to mean and include any Redemption Price or
                  Repurchase Price payable in respect of such Security pursuant
                  to any redemption or repurchase right hereunder (and all such
                  references to the Stated Maturity of the principal in respect
                  of any Security shall be deemed to mean and include the
                  Redemption Date or Repurchase Date with respect to any such
                  Redemption Price or Repurchase Price), and all such references
                  to principal, premium, interest or Additional Amounts shall be

                                    - 63 -
<PAGE>
                  deemed to mean and include any amount payable in respect
                  hereof pursuant to Section 10.7, and express mention of the
                  payment of any Redemption Price or Repurchase Price, or any
                  such other amount in any provision hereof shall not be
                  construed as excluding reference to the payment of any
                  Redemption Price or Repurchase Price, or any such other
                  amounts in those provisions hereof where such express
                  reference is not made.

    10.8  INDEMNIFICATION OF JUDGMENT CURRENCY

          The Company and the Guarantor shall indemnify the Trustee and any
          Holder of a Security against any loss incurred by the Trustee or such
          Holder, as the case may be, as a result of any judgment or order being
          given or made for any amount due under this Indenture or such Security
          and being expressed and paid in a currency (the "JUDGMENT CURRENCY")
          other than Dollars, and as a result of any variation between (i) the
          rate of exchange at which the Dollar amount is converted into the
          Judgment Currency for the purpose of such judgment or order and (ii)
          the spot rate of exchange in The City of New York at which the Trustee
          or such Holder, as the case may be, on the date of payment of such
          judgment or order is able to purchase Dollars with the amount of the
          Judgment Currency actually received by the Trustee or such Holder. The
          foregoing indemnity shall constitute a separate and independent
          obligation of the Company and the Guarantor and shall continue in full
          force and effect notwithstanding any such judgment or order as
          aforesaid. The term "spot rate of exchange" shall include any premiums
          and costs of exchange payable in connection with the purchase of, or
          conversion into, Dollars.

    10.9  FURTHER ACTS; PROTECTION OF COLLATERAL

          10.9.1  The Company and the Guarantor will each take any action,
                  satisfy any condition or do any thing (including the obtaining
                  or effecting of any necessary consent, approval,
                  authorization, exemption, filing, license, order, recording or
                  registration) at any time required in accordance with the
                  applicable laws and regulations to be taken, fulfilled or done
                  in order (i) to enable it lawfully to enter into, exercise its
                  rights and perform and comply with its obligations under the
                  Securities, this Indenture and any supplemental indenture, as
                  the case may be, including any security interest created
                  thereby, (ii) to ensure that those obligations are legally
                  binding and enforceable, (iii) to make the Securities, this
                  Indenture and any supplemental indenture admissible in
                  evidence in the courts of the State of New York, the Cayman
                  Islands and Brazil and (iv) to enable the Trustee to exercise
                  and enforce its respective rights under this Indenture and any
                  supplemental indenture and to carry out the terms, provisions
                  and purposes of this Indenture and any supplemental indenture;

          10.9.2  The Company shall from time to time prepare (or shall cause to
                  be prepared), execute, file and deliver all such supplements
                  and amendments hereto and all such financing statements,
                  continuation statements, instruments of further assurance and
                  other instruments (including any additional financing
                  statements, instruments, control agreements or other documents
                  necessary due to a change in applicable law, rule or
                  regulation or otherwise), and shall take such other action
                  necessary or advisable to:

                                    - 64 -
<PAGE>
                  (i)   maintain or preserve any Lien and first priority
                        security interest that may be created pursuant to any
                        supplemental indenture or carry out more effectively the
                        purposes thereof;

                  (ii)  perfect, publish notice of or protect the validity of
                        any Lien and first priority security interest that may
                        be created pursuant to any supplemental indenture;

                  (iii) enforce the rights of the Trustee and the Holders of
                        Securities in any collateral or security interest that
                        may be created pursuant to any supplemental indenture;
                        or

                  (iv)  preserve and defend title to any collateral or security
                        interest that may be created pursuant to any
                        supplemental indenture and the rights of the Trustee and
                        the Holders of Securities in any collateral or security
                        interest that may be created pursuant to any
                        supplemental indenture against the claims of all Persons
                        and parties.

          10.9.3  The Company hereby authorizes the Trustee to file any
                  financing statement, including any amendments or continuations
                  of any original financing statements, with respect to any
                  collateral and or security interest that may be created
                  pursuant to any supplemental indenture and identifying the
                  Company as the debtor as the Trustee deems necessary or
                  desirable.

          The Company hereby designates the Trustee its agent and
          attorney-in-fact to execute any financing statement, continuation
          statement or other instrument required to be filed by the Company
          pursuant to this Section. Notwithstanding anything herein to the
          contrary, the Trustee shall have no duty as to maintaining, perfecting
          or collecting any collateral or security interest that may be created
          pursuant to any supplemental indenture.

    10.10 NOTICE OF LATE PAYMENT

          So long as any Security is Outstanding, the Company will forthwith
          upon request by the Trustee give notice to the Holders of Securities
          of any unconditional payment to the Trustee of any sum due in respect
          of the Securities made after the Business Day prior to the due date
          for such payment.

    10.11 SECURITIES HELD BY THE COMPANY

          So long as any Security is Outstanding, the Company will send to the
          Trustee, as soon as practicable after being so requested by the
          Trustee, an Officer's Certificate of the Company stating the aggregate
          principal amount of Securities held or beneficially owned, at the date
          of such certificate by or on behalf of the Company, the Guarantor or
          any of its Subsidiaries. The Company will promptly notify the Trustee
          when it, the Guarantor or any of its Subsidiaries holds or
          beneficially owns Securities.

    10.12 SECURITIES ISSUED OR OUTSTANDING

          So long as any Security is Outstanding, the Company will send to the
          Trustee within fourteen (14) days after any written request by the
          Trustee, an Officer's Certificate

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<PAGE>
          confirming the aggregate principal amount of Securities issued and/or
          Outstanding under this Indenture.

    10.13 STATUS OF GUARANTY AND SECURITIES

          The Guarantor will ensure that the Guaranty will rank at least PARI
          PASSU with any current and future unsecured and unsubordinated
          Indebtedness of the Guarantor. The Company will ensure that the
          Securities will rank at least PARI PASSU with any current and future
          Indebtedness of the Company.

    10.14 RATING

          Upon the further issue of Securities under this Indenture and any
          supplemental indentures, the Company will obtain a rating confirmation
          of any other applicable series of Securities then outstanding.

    10.15 MAINTENANCE OF GOOD STANDING

          The Company will do or cause to be done all things necessary to
          preserve and keep in full force and effect its existence and rights to
          conduct its business under Cayman Islands law as currently
          contemplated in its Memorandum and Articles of Association. The
          Guarantor will do or cause to be done all things necessary to preserve
          and keep in full force and effect its existence. The Company and the
          Guarantor will comply with all laws, regulations, rules and orders of
          Brazil and the Cayman Islands, or any political subdivision thereof,
          which apply to its existence, property and business, including
          applicable environmental and labor laws, except to the extent such
          failure to comply would not individually or in the aggregate have a
          material adverse effect on the general affairs, business, prospects,
          management, financial position, stockholder's equity or results of
          operations of the Company or the Guarantor.

    10.16 MAINTENANCE OF PROPERTIES

          The Company and the Guarantor will cause all properties that are
          material to the conduct of their business to be maintained and kept in
          good condition, repair and working order and supplied with all
          necessary equipment and will cause to be made all necessary repairs,
          renewals, replacements, betterments and improvements thereof, all as
          in the judgment of the Company and the Guarantor may be necessary so
          that the business carried on in connection therewith may be properly
          and advantageously conducted at all times; PROVIDED, HOWEVER, that
          nothing in this Section shall prevent the Company or the Guarantor
          from discontinuing the operation or maintenance of any of such
          properties if such discontinuance is, in the judgment of the Company
          or the Guarantor, desirable in the conduct of its business and not
          disadvantageous in any material respect to the Holders of Notes. The
          Company or the Guarantor will cause all of its properties and its
          business to be insured against all damages, claims, interruptions and
          loss encountered in the normal course of business.

    10.17 PAYMENT OF TAXES

          The Company and the Guarantor will pay or discharge or cause to be
          paid or discharged, before the same shall become delinquent, all
          taxes, assessments and

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<PAGE>
          governmental charges levied or imposed upon the Company or the
          Guarantor or upon the income, profits or property of the Company or
          the Guarantor (the "TAXES") which, if unpaid, might by law become a
          Lien upon the property of the Company and the Guarantor; PROVIDED,
          HOWEVER, that (x) the Company and the Guarantor shall not be required
          to pay or discharge or cause to be paid or discharged any such tax,
          assessment, charge or claim whose amount, applicability or validity is
          then-currently being contested in good faith by appropriate
          proceedings and (y) the Company and the Guarantor shall be in
          compliance with this Section 10.17 if the individual or the aggregate
          amount of the Taxes not paid would not have a material adverse effect
          on the ability of the Guarantor to comply with its obligations under
          this Indenture.

    10.18 OWNERSHIP OF THE COMPANY AND PAYMENT OF EXPENSES

          The Guarantor will at all times own, either directly or indirectly,
          100% of the capital stock of the Company. The Guarantor will determine
          and timely pay all fees, taxes, tariffs, service company expenses and
          other monies required to be paid in connection with the establishment
          and maintenance of the existence of the Company under Cayman Islands
          law.

    10.19 FINANCIAL STATEMENTS AND REPORTS

          So long as any Note is Outstanding, the Company (but only if required
          to prepare the requested information under Cayman Islands law) and the
          Guarantor will send to the Trustee at the time of their issue, and in
          the case of annual financial statements (which shall be audited) in
          any event within one hundred twenty (120) days after the end of each
          financial year, four (4) copies in English of every balance sheet and
          profit and loss account of the Company and the Guarantor; PROVIDED
          that unaudited quarterly financial reports must be sent to the Trustee
          within sixty (60) days of the end of each fiscal quarter.

    10.20 NOTICE TO TRUSTEE

          The Guarantor will provide written notice to the Trustee within five
          Business Days of depositing funds with the Trustee in satisfaction of
          the Guaranty.

    10.21 RESTRICTIONS ON THE COMPANY

          So long as any Securities are Outstanding, the Company shall not,
          without the prior consent in writing of the Trustee if so directed by
          the holders of not less than 25% of the principal amount of the
          Securities Outstanding:

          10.21.1  engage in any business other than issuing Securities,
                   acquiring and holding any collateral for the payment of
                   Securities, issuing further Securities, entering into
                   agreements and transactions related to all or any of the
                   foregoing and performing any act incidental to or necessary
                   in connection with any of the foregoing;

          10.21.2  dispose of any part of any collateral or any interest
                   therein, or create any mortgage, charge or other security or
                   right of recourse in respect thereof in favor of any person;

                                    - 67 -
<PAGE>
          10.21.3  declare or pay any dividends or make any distribution of its
                   assets;

          10.21.4  release any party to this Indenture from any existing
                   obligations thereunder;

          10.21.5  have any subsidiaries;

          10.21.6  consolidate or merge with any other person (other than as
                   contemplated by this Indenture);

          10.21.7  take or omit to take any action, or make or omit to make any
                   filing, or consent to the taking or omission to take any
                   action or the making or omission to make any filing, which
                   could lead to the Company becoming subject to any of the
                   events specified in Section 5.1.5 or Section 5.1.6;

          10.21.8  have any employees;

          10.21.9  incur any indebtedness for borrowed moneys, other than
                   issuing Securities to the extent permitted under this
                   Indenture and provided that:

                   (i)  Moody's shall have confirmed in advance to the Trustee
                        in writing that the issue of any further Securities
                        shall not result in a downgrading of the then current
                        rating assigned to any Outstanding Securities; and

                   (ii) following  the issue of such  further  Securities,  the
                        Issuer  will not be deemed to be an  "investment
                        company" as defined in the U.S. Investment Company Act
                        of 1940; or

          10.21.10 purchase, own, lease or otherwise acquire any real property
                   (including office premises or like facilities).

    10.22 RESTRICTIONS ON THE GUARANTOR

          So long as any Securities are Outstanding, the Guarantor and the
          Company shall not:

          10.22.1  without the prior consent in writing of the Trustee, if so
                   directed by the holders of not less than 25% of the principal
                   amount of the Securities Outstanding, cause to be made or
                   approve any changes to the constitutive documents of the
                   Company allowing the Company to be engaged in any business or
                   carry out any activities other than the ones contemplated by
                   Section 10.23; or

          10.22.2  take or omit to take any action, or make or omit to make any
                   filing, or consent to the taking or omission to take any
                   action or the making or omission to make any filing, which
                   could lead to the Company becoming subject to any of the
                   events specified in Section 5.1.5 or Section 5.1.6.

    10.23 CHANGE TO CONSTITUTIVE DOCUMENTS OF THE COMPANY

          The Guarantor shall take any and all action as the sole shareholder of
          the Company to effect a change in the constitutive documents of the
          Company within 90 days of the date hereof. That change shall be to
          restrict the objects of the Company to acting as a finance company for
          the CVRD Group by issuing Securities under this Indenture and
          activities incidental or related thereto and such other purposes as
          the Trustee may

                                    - 68 -
<PAGE>
          approve if so directed by holders of not less than 25% in principal
          amount of the Outstanding Securities.

11  REDEMPTION OF SECURITIES

    11.1  RIGHT OF REDEMPTION

          11.1.1   The Securities of any series which are redeemable before
                   their Stated Maturity may not be redeemed at the election of
                   the Company except in accordance with their terms and (except
                   as otherwise specified as contemplated by Section 3.1 for
                   such Securities) in accordance with the provisions of this
                   Article.

          11.1.2   The election of the Company to redeem any Securities shall be
                   evidenced by a Board Resolution. In case of any redemption at
                   the election of the Company, the Company shall, at least 45
                   days prior to the Redemption Date fixed by the Company,
                   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 specified therefor
                   in the Securities of a series to be redeemed.

          11.1.3   If, as a result of any amendment to, or change in, the laws
                   (or any rules or regulation thereunder) of the Cayman Islands
                   or Brazil or any political subdivision or taxing authority
                   thereof or therein affecting taxation or any amendment to or
                   change in an official interpretation, administration or
                   application of such laws, rules or regulations (including a
                   holding by a court of competent jurisdiction), which
                   amendment or change of such laws, rules or regulations or the
                   interpretation thereof becomes effective on or after the date
                   specified therefor in the Securities of a series, the Company
                   would be obligated to pay Additional Amounts in respect of
                   the Securities of such series pursuant to the terms and
                   conditions thereof in excess of those attributable to Cayman
                   Islands or Brazilian withholding tax on the basis of a
                   statutory rate of 15%, and if such obligation cannot be
                   avoided by the Company after taking measures the Company
                   considers reasonable to avoid it, then, at the Company's
                   option, the Securities of such series may be redeemed in
                   whole, but not in part, at any time, on giving not less than
                   30 nor more than 60 days' notice to the Holders of such
                   Securities, at a Redemption Price equal to 100% of the
                   principal amount thereof and any premium applicable thereto,
                   together with accrued interest up to but not including the
                   Redemption Date and any Additional Amounts which would
                   otherwise be payable; PROVIDED, HOWEVER, that (1) no notice
                   of such redemption may be given earlier than 90 days prior to
                   the earliest date on which the Company would but for such
                   redemption be obligated to pay such Additional Amounts were a
                   payment on such Securities then due, and (2) at the time such
                   notice is given, such obligation to pay such Additional
                   Amounts remains in effect.

          11.1.4   Before any notice of redemption pursuant to Section 11.1.3 is
                   given to the Trustee or the Holders of Securities of the
                   relevant series, the Company shall deliver to the Trustee (i)
                   an Officers' Certificate stating that the Company is entitled
                   to effect such redemption and setting forth a statement of
                   facts showing

                                    - 69 -
<PAGE>
                   that the condition or conditions precedent to the right of
                   the Company so to redeem have occurred or been satisfied and
                   (ii) an Opinion of Counsel to the effect that the Company has
                   or shall become obligated to pay such Additional Amounts as a
                   result of such change or amendment. Such notice, once given
                   to the Trustee, shall be irrevocable.

    11.2  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:

          11.2.1   the Redemption Date,

          11.2.2   the Redemption Price and amount of accrued interest, if any,

          11.2.3   that on the Redemption Date the Redemption Price and any
                   accrued interest shall become due and payable upon each
                   Security to be redeemed and that interest thereon shall cease
                   to accrue on and after said date,

          11.2.4   the conversion rate (if applicable), the date on which the
                   right to convert the Securities to be redeemed shall
                   terminate and the place or places where such Securities may
                   be surrendered for conversion,

          11.2.5   the place or places where such Securities are to be
                   surrendered for payment of the Redemption Price and any
                   accrued interest, and

          11.2.6   applicable CUSIP or ISIN Numbers.

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

    11.3  DEPOSIT OF REDEMPTION PRICE

          On the Business Day prior to any Redemption Date, the Company shall
          deposit with the Trustee or with a Paying Agent (or, if the Company is
          acting as its own Paying Agent, segregate and hold in trust as
          provided in Section 10.3) an amount of money sufficient to pay the
          Redemption Price of, and (except if the Redemption Date shall be an
          Interest Payment Date) accrued interest on, all the Securities which
          are to be redeemed on that date.

    11.4  SECURITIES PAYABLE ON REDEMPTION DATE

          Notice of redemption having been given as aforesaid, the Securities so
          to be redeemed shall, on the Redemption Date, become due and payable
          at the Redemption Price therein specified, and from and after such
          date (unless the Company shall default in the payment of the
          Redemption Price and accrued interest) such Securities shall cease to
          bear interest. Upon surrender of any such Security for redemption in
          accordance with

                                    - 70 -
<PAGE>
          said notice, such Security shall be paid by the Company to the Person
          in whose name such Security is registered at the Redemption Price,
          together with accrued interest to the Redemption Date; PROVIDED,
          HOWEVER, that installments of interest whose Stated Maturity is on or
          prior to the Redemption Date shall be payable to the Holders of such
          Securities, or one or more Predecessor Securities, registered as such
          at the close of business on the relevant Record Dates according to
          their terms and the provisions of Section 3.6.

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

    11.5  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.

12  GUARANTY

    12.1  THE GUARANTY

          Subject to the provisions of this Article, the Guarantor hereby
          irrevocably and unconditionally guarantees to each Holder of a
          security of each series authenticated and delivered by the Trustee and
          to the Trustee the full and punctual payment (whether at the Stated
          Maturity, upon redemption, purchase pursuant to an offer to purchase
          or acceleration or otherwise) of the principal, premium, interest,
          Additional Amounts and all other amounts that may come due and payable
          under each Security and the full and punctual payment of all other
          amounts payable by the Company under the Indenture as they come due.
          Upon failure by the Company to pay punctually any such amount, the
          Guarantor shall forthwith pay the amount not so paid at the place and
          time and in the manner specified in the Indenture.

    12.2  GUARANTY UNCONDITIONAL

          The obligations of the Guarantor hereunder are unconditional and
          absolute and, without limiting the generality of the foregoing, will
          not be released, discharged or otherwise affected by

          12.2.1   any extension, renewal, settlement, compromise, waiver or
                   release in respect of any obligation of the Company under the
                   Indenture or any Security, by operation of law or otherwise;

                                    - 71 -
<PAGE>
          12.2.2   any modification or amendment of or supplement to the
                   Indenture or any Security;

          12.2.3   any change in the corporate existence, structure or ownership
                   of the Company, or any insolvency, bankruptcy, reorganization
                   or other similar proceeding affecting the Company or its
                   assets or any resulting release or discharge of any
                   obligation of the Company contained in the Indenture or any
                   Security;

          12.2.4   the existence of any claim, set-off or other rights which the
                   Guarantor may have at any time against the Company, the
                   Trustee or any other Person, whether in connection with the
                   Indenture or any unrelated transactions, PROVIDED that
                   nothing herein prevents the assertion of any such claim by
                   separate suit or compulsory counterclaim;

          12.2.5   any invalidity or unenforceability relating to or against the
                   Company for any reason of the Indenture or any Security, or
                   any provision of applicable law or regulation purporting to
                   prohibit the payment by the Company of the principal of or
                   interest on any Security or any other amount payable by the
                   Company under the Indenture; or

          12.2.6   any other act or omission to act or delay of any kind by the
                   Company, the Trustee or any other Person or any other
                   circumstance whatsoever which might, but for the provisions
                   of this paragraph, constitute a legal or equitable discharge
                   of or defense to such Guarantor's obligations hereunder.

    12.3  DISCHARGE; REINSTATEMENT

          The Guarantor's obligations hereunder will remain in full force and
          effect until the principal of, premium, if any, and interest on the
          Securities and all other amounts payable by the Company under the
          Indenture have been paid in full. If at any time any payment of the
          principal of, premium, if any, or interest on any Security or any
          other amount payable by the Company under the Indenture is rescinded
          or must be otherwise restored or returned upon the insolvency,
          bankruptcy or reorganization of the Company or otherwise, the
          Guarantor's obligations hereunder with respect to such payment will be
          reinstated as though such payment had been due but not made at such
          time.

    12.4  WAIVER BY THE GUARANTOR

          12.4.1   The Guarantor unconditionally and irrevocably waives
                   acceptance hereof, presentment, demand, protest and any
                   notice not provided for herein, as well as any requirement
                   that at any time any action be taken by any Person against
                   the Company or any other Person. The Guaranty constitutes a
                   guaranty of payment and not of collection.

          12.4.2   The Guarantor unconditionally and irrevocably waives any and
                   all rights provided under Articles 1491, 1498 through 1500
                   and 1502 through 1504 of the Brazilian Civil Code, Articles
                   261 and 262 of the Brazilian Commercial Code and Article 595
                   of the Brazilian Civil Procedure Code.

                                    - 72 -
<PAGE>
    12.5  SUBROGATION AND CONTRIBUTION

          Upon making any payment with respect to any obligation of the Company
          under this Article, the Guarantor making such payment will be
          subrogated to the rights of the payee against the Company with respect
          to such obligation; PROVIDED, HOWEVER, that the Guarantor shall not be
          entitled to enforce, or to receive any payments arising out of or
          based upon, such right of subrogation until the principal of (and
          premium, if any) and interest on all Securities of the relevant series
          shall have been paid in full.

    12.6  STAY OF ACCELERATION

          If acceleration of the time for payment of any amount payable by the
          Company under the Indenture or the Securities is stayed upon the
          insolvency, bankruptcy or reorganization of the Company, all such
          amounts otherwise subject to acceleration under the terms of the
          Indenture are nonetheless payable by the Guarantor forthwith on demand
          by the Trustee or the Holders.

    12.7  EXECUTION AND DELIVERY OF GUARANTY

          The execution by the Guarantor of the Indenture or a supplemental
          indenture evidences the Guaranty of such Guarantor, whether or not the
          person signing as an officer of the Guarantor still holds that office
          at the time of authentication of any Security. The delivery of any
          Security by the Trustee after authentication constitutes due delivery
          of the Guaranty set forth in the Indenture on behalf of the Guarantor.

                                    - 73 -
<PAGE>

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

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

EXECUTED AS A DEED BY

VALE OVERSEAS LIMITED,
as Issuer

By: /s/ Jorge Tadeu Moura Pinho
    ---------------------------------------
    Name: Jorge Tadeu Moura Pinho
    Title: Attorney

By: /s/ Bernadeth Vieira de Souza
    ---------------------------------------
    Name: Bernadeth Vieira de Souza
    Title: Attorney

COMPANHIA VALE DO RIO DOCE,
as Guarantor

By: /s/ Leonardo Moretzsohm de Andrade
    ---------------------------------------
    Name: Leonardo Moretzsohm de Andrade
    Title: Attorney

By: /s/ Andrea Marques de Almeida
    ---------------------------------------
    Name: Andrea Marques de Almeida
    Title: Attorney

JPMORGAN CHASE BANK,
as Trustee

By: /s/ Lesley Daley
    ---------------------------------------
    Name: Lesley Daley
    Title: Trust Officer

Sworn to before me this 8th day of March, 2002.

/s/ James M. Foley
-------------------------------------
Notary Public

                                      -74-
<PAGE>

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

TRUST INDENTURE

ACT SECTION                                        INDENTURE SECTION
ss.310(a)(1)....................................................6.9
      (a)(2)....................................................6.9
      (a)(3).........................................Not Applicable
      (a)(4).........................................Not Applicable
      (a)(5)....................................................6.9
      (b).......................................................6.8
      .........................................................6.10

ss.311(a)......................................................6.13
      (b)......................................................6.13

ss.312(a).......................................................7.1
      ..........................................................7.2
      (b).......................................................7.2
      (c).......................................................7.2

ss.313(a).......................................................7.3
      (b).......................................................7.3
      (c)(1)....................................................7.3
      (c)(2)....................................................7.3
      (c)(3)....................................................7.3
      (d).......................................................7.3

ss.314(a)......................................................10.5
      (b)......................................................10.5
      (c)......................................................10.5
      (d)......................................................10.5

ss.315(a).......................................................6.1
      (b).......................................................6.2
      (c).......................................................6.1
      (d).......................................................6.1
      (e)......................................................5.15

ss.316(a)(1)(A)................................................5.13
      (a)(1)(B)................................................5.14
      (a)(2).........................................Not Applicable
      (b).......................................................5.9
      (c).......................................................1.4

ss.317(a)(1)....................................................5.4
      (a)(2)....................................................5.5
      (b)......................................................10.3

ss.318(a).......................................................1.7

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

                                      -75-

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