Document:

<PAGE>   1
                                                                    EXHIBIT 10.4

                      BRL UNIVERSAL EQUIPMENT 2001 A, L.P.
                          BRL UNIVERSAL EQUIPMENT CORP.

                                   as Issuers

                                       and

                              THE BANK OF NEW YORK

                                   as Trustee

                                    INDENTURE

                          Dated as of February 9, 2001

                      8-7/8% Senior Secured Notes due 2008

<PAGE>   2

                              CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
  TIA                                                                               Indenture
Section                                                                              Section
-------                                                                             ----------
<S>                                                                                 <C>
310(a)(1)............................................................................  6.10
    (a)(2)...........................................................................  6.10
    (a)(3)...........................................................................  N.A.
    (a)(4)...........................................................................  N.A.
    (a)(5)...........................................................................  6.10
    (b)..............................................................................  6.08; 6.10
    (c)..............................................................................  N.A.
311(a)...............................................................................  6.11
    (b)..............................................................................  6.11
    (c)..............................................................................  N.A.
312(a)...............................................................................  2.05
    (b)..............................................................................  N.A.
    (c)..............................................................................  N.A.
313(a)...............................................................................  6.06
    (b)(1)...........................................................................  N.A.
    (b)(2)...........................................................................  6.06
    (c)..............................................................................  6.06
    (d)..............................................................................  6.06
314(a)...............................................................................  4.06; 4.08
    (b)..............................................................................  9.03(b)
    (c)(1)...........................................................................  N.A.
    (c)(2)...........................................................................  N.A.
    (c)(3)...........................................................................  N.A.
    (d)..............................................................................  9.03(b); 9.04; 9.05
    (e)..............................................................................  N.A.
    (f)..............................................................................  N.A.
315(a)...............................................................................  6.01(b)
    (b)..............................................................................  6.05
    (c)..............................................................................  6.01(a)
    (d)..............................................................................  6.01(c)
    (e)..............................................................................  5.11
316(a)(last sentence)................................................................  2.09
    (a)(1)(A)........................................................................  5.05
    (a)(1)(B)........................................................................  5.04
    (a)(2)...........................................................................  N.A.
    (b)..............................................................................  5.07
    (c)..............................................................................  8.04
317(a)(1)............................................................................  5.08
    (a)(2)...........................................................................  5.09
</TABLE>

<PAGE>   3

<TABLE>
<S>                                                                                    <C>
    (b)..............................................................................  2.04
318(a)...............................................................................  N.A.
    (c)..............................................................................  N.A.
</TABLE>

                           N.A. means Not Applicable.

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

Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
      part of the Indenture.

N.A. means Not Applicable

Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
      part of this Indenture

<PAGE>   4

                                TABLE OF CONTENTS

<TABLE>
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                                   ARTICLE ONE

                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.         Definitions............................................................................      1
SECTION 1.02.         Incorporation by Reference of TIA......................................................     10
SECTION 1.03.         Rules of Construction..................................................................     11

                                   ARTICLE TWO

                                    THE NOTES

SECTION 2.01.         Form and Dating........................................................................     11
SECTION 2.02.         Execution and Authentication; Aggregate Principal Amount...............................     13
SECTION 2.03.         Registrar and Paying Agent.............................................................     14
SECTION 2.04.         Paying Agent To Hold Assets in Trust...................................................     14
SECTION 2.05.         Holder Lists...........................................................................     14
SECTION 2.06.         Transfer and Exchange..................................................................     15
SECTION 2.07.         Replacement Notes......................................................................     29
SECTION 2.08.         Outstanding Notes......................................................................     29
SECTION 2.09.         Treasury Notes.........................................................................     29
SECTION 2.10.         Temporary Notes........................................................................     30
SECTION 2.11.         Cancellation...........................................................................     30
SECTION 2.12.         Defaulted Interest.....................................................................     30
SECTION 2.13.         CUSIP Number...........................................................................     31
SECTION 2.14.         Deposit of Monies......................................................................     31

                                  ARTICLE THREE

                                   REDEMPTION

SECTION 3.01.         Notices to Trustee.....................................................................     32
SECTION 3.02.         Selection of Notes To Be Redeemed......................................................     32
SECTION 3.03.         Optional Redemption....................................................................     33
SECTION 3.04.         Notice of Redemption...................................................................     34
SECTION 3.05.         Effect of Notice of Redemption.........................................................     35
SECTION 3.06.         Deposit of Redemption Price............................................................     35
SECTION 3.07.         Notes Redeemed in Part.................................................................     35
</TABLE>

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<TABLE>
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                                  ARTICLE FOUR

                                    COVENANTS

SECTION 4.01.         Application of Proceeds................................................................     36
SECTION 4.02.         Payment of Notes.......................................................................     36
SECTION 4.03.         Maintenance of Office or Agency........................................................     36
SECTION 4.04.         Legal Existence........................................................................     36
SECTION 4.05.         Payment of Taxes and Other Claims......................................................     37
SECTION 4.06.         Compliance Certificate; Notice of Default..............................................     37
SECTION 4.07.         Compliance with Laws...................................................................     37
SECTION 4.08.         Line of Business.......................................................................     38
SECTION 4.09.         Liens..................................................................................     38
SECTION 4.10.         Liquidation............................................................................     38
SECTION 4.11.         Reports to Holders.....................................................................     38
SECTION 4.12.         Waiver of Stay, Extension or Usury Laws................................................     39
SECTION 4.13.         Change of Control......................................................................     39
SECTION 4.14.         Net Proceeds Offer Following Asset Sale................................................     41

                                  ARTICLE FIVE

                                    REMEDIES

SECTION 5.01.         Events of Default......................................................................     43
SECTION 5.02.         Acceleration...........................................................................     45
SECTION 5.03.         Other Remedies.........................................................................     45
SECTION 5.04.         Waiver of Defaults.....................................................................     46
SECTION 5.05.         Control by Majority....................................................................     46
SECTION 5.06.         Limitation on Suits....................................................................     46
SECTION 5.07.         Right of Holders To Receive Payment....................................................     47
SECTION 5.08.         Collection Suit by Trustee.............................................................     47
SECTION 5.09.         Trustee May File Proofs of Claim.......................................................     47
SECTION 5.10.         Priorities.............................................................................     48
SECTION 5.11.         Undertaking for Costs..................................................................     48
SECTION 5.12.         Restoration of Rights and Remedies.....................................................     48

                                   ARTICLE SIX

                                     TRUSTEE

SECTION 6.01.         Duties of Trustee......................................................................     49
SECTION 6.02.         Rights of Trustee......................................................................     50
SECTION 6.03.         Individual Rights of Trustee...........................................................     51
SECTION 6.04.         Trustee's Disclaimer...................................................................     51
</TABLE>

                                      -ii-
<PAGE>   6
<TABLE>
<CAPTION>
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<S>                                                                                                              <C>
SECTION 6.05.         Notice of Default......................................................................     52
SECTION 6.06.         Reports by Trustee to Holders..........................................................     52
SECTION 6.07.         Compensation and Indemnity.............................................................     52
SECTION 6.08.         Replacement of Trustee.................................................................     53
SECTION 6.09.         Successor Trustee by Merger, Etc.......................................................     54
SECTION 6.10.         Eligibility; Disqualification..........................................................     54
SECTION 6.11.         Preferential Collection of Claims Against Issuers......................................     55

                                  ARTICLE SEVEN

                       DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 7.01.         Termination of Issuers' Obligations....................................................     55
SECTION 7.02.         Application of Trust Money.............................................................     57
SECTION 7.03.         Repayment to the Issuers...............................................................     58
SECTION 7.04.         Reinstatement..........................................................................     58
SECTION 7.05.         Acknowledgment of Discharge by Trustee.................................................     58

                                  ARTICLE EIGHT

                          MODIFICATION OF THE INDENTURE

SECTION 8.01.         Without Consent of Holders.............................................................     59
SECTION 8.02.         Modification of Indenture and Operative Documents......................................     59
SECTION 8.03.         Compliance with TIA....................................................................     62
SECTION 8.04.         Revocation and Effect of Consents......................................................     62
SECTION 8.05.         Notation on or Exchange of Notes.......................................................     62
SECTION 8.06.         Trustee To Sign Amendments, Etc........................................................     62

                                  ARTICLE NINE

                   SECURITY UNDER THE PARTICIPATION AGREEMENT

SECTION 9.01.         Participation Agreement................................................................     63
SECTION 9.02.         Recording and Opinions.................................................................     64
SECTION 9.03.         Release of Collateral..................................................................     64
SECTION 9.04.         Certificates of the Issuers............................................................     65
SECTION 9.05.         Certificates of the Trustee............................................................     65
SECTION 9.06.         Authorization of Actions To Be Taken by the Trustee Under the
                          Participation Agreement............................................................     65
SECTION 9.07.         Authorization of Receipt of Funds by the Trustee Under the
                          Participation Agreement............................................................     66
SECTION 9.08.         Termination of Security Interest.......................................................     66
</TABLE>

                                     -iii-
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<CAPTION>
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                                   ARTICLE TEN

                                  MISCELLANEOUS

SECTION 10.01.        TIA Controls...........................................................................     66
SECTION 10.02.        Notices................................................................................     66
SECTION 10.03.        Communications by Holders with Other Holders...........................................     67
SECTION 10.04.        Certificate and Opinion as to Conditions Precedent.....................................     68
SECTION 10.05.        Statements Required in Certificate or Opinion..........................................     68
SECTION 10.06.        Rules by Trustee, Paying Agent, Registrar..............................................     68
SECTION 10.07.        Legal Holidays.........................................................................     68
SECTION 10.08.        Governing Law..........................................................................     69
SECTION 10.09.        No Adverse Interpretation of Other Agreements..........................................     69
SECTION 10.10.        No Personal Liability..................................................................     69
SECTION 10.11.        Successors.............................................................................     69
SECTION 10.12.        Duplicate Originals....................................................................     69
SECTION 10.13.        Severability...........................................................................     69
SECTION 10.14.        Independence of Covenants..............................................................     69

Exhibit A       -    Form of Initial Note....................................................................     A-1
Exhibit B       -    Form of Exchange Note...................................................................     B-1
Exhibit C       -    Form of Certificate of Transfer.........................................................     C-1
Exhibit D       -    Form of Certificate of Exchange.........................................................     D-1
Exhibit E       -    Form of Certificate of Acquiring Institutional Accredited Investor......................     E-1
</TABLE>

Note: This Table of Contents shall not, for any purpose, be deemed to be part of
      this Indenture.

                                      -iv-
<PAGE>   8

                  INDENTURE, dated as of February 9, 2001, between BRL UNIVERSAL
EQUIPMENT 2001 A, L.P. ("BRL"), BRL UNIVERSAL EQUIPMENT CORP. ("BRL Corp." and,
together with BRL, the "Issuers") and THE BANK OF NEW YORK, as trustee (the
"Trustee").

                  Each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the Notes:

                                   ARTICLE ONE

                   DEFINITIONS AND INCORPORATION BY REFERENCE

                  SECTION 1.01.         Definitions.

                  "Acquisition Cost" has the meaning set forth in the
Participation Agreement.

                  "Additional Interest" has the meaning set forth in the
Registration Rights Agreement.

                  "Administrative Agent" has the meaning set forth in the
Participation Agreement.

                  "Affiliate" means, with respect to any specified Person, 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. The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative of the foregoing.

                  "Agent" means any Registrar, Paying Agent or co-Registrar.

                  "Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.

                  "Appraisal" shall have the meaning set forth in the
Participation Agreement.

                  "Asset Sale" has the meaning set forth in the Participating
Agreement.

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

                  "Board of Directors" means, as to any Person, the board of
directors, management committee or other body governing the management of such
Person or the general partner of such Person or any duly authorized committee
thereof.

<PAGE>   9

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

                  "BRL" has the meaning provided in the first paragraph of this
Indenture.

                  "BRL Term Loan" means the single non-revolving loan made to
BRL pursuant to the BRL Term Loan Agreement.

                  "BRL Term Loan Agreement" means the agreement, dated as of the
Issue Date, among Bankers Trust Company, as Administrative Agent, BRL, and the
lenders party thereto.

                  "BRL Term Loan Lenders" means the lenders, from time to time,
under the BRL Term Loan.

                  "BRL Term Loan Note" has the meaning assigned to such term in
the Participation Agreement.

                  "Business Day" means any day other than a Saturday, Sunday or
any other day on which commercial banking institutions in the City of New York
are required or authorized by law or other governmental action to be closed.

                  "Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.

                  "Certificated Securities" means Notes in definitive registered
form.

                  "Change of Control" has the meaning set forth in the
Participation Agreement.

                  "Change of Control Offer" has the meaning provided in Section
4.13(a).

                  "Change of Control Payment Date" has the meaning provided in
Section 4.13(b).

                  "Change of Control Redemption" has the meaning provided in
Section 3.03(c).

                  "Clearstream" means Clearstream Banking, S.A.

                  "Collateral" means the collateral granted to BRL under Section
9 of the Equipment Lease Agreement and assigned by BRL, together with the
collateral granted by BRL under Section 7 of the Participation Agreement, to the
Collateral Agent for the benefit of the Holders and the lenders under the BRL
Term Loan.

                                      -2-
<PAGE>   10

                  "Collateral Agent" has the meaning set forth in the
Participation Agreement.

                  "Commission" means the U.S. Securities and Exchange
Commission.

                  "Common Stock" of any Person means any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or non-voting) of such Person's common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.

                  "Covenant Defeasance" has the meaning set forth in Section
7.01.

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

                  "Default" means an event or condition the occurrence of which
is, or with the lapse of time or the giving of notice or both would be, an Event
of Default.

                  "Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06, in the
form of Exhibit A or B except that such Note shall not bear the Global Note
Legend.

                  "Depositary" means The Depository Trust Company, its nominees
and successors.

                  "Disqualified Capital Stock" means that portion of any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof on or prior to the final maturity date of the Notes, provided that any
Capital Stock that would not constitute Disqualified Capital Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the stated maturity of the Notes shall
not constitute Disqualified Capital Stock if the "change of control" or "asset
sale" provisions applicable to such Capital Stock are no more favorable to the
holders of such Capital Stock than the provisions contained in Sections 4.13 and
4.14 hereof and such Capital Stock specifically provides that such Person will
not repurchase or redeem any such stock pursuant to such provision prior to the
Issuers' repurchase of such Notes as are required to be repurchased pursuant to
such Sections.

                  "Distribution Compliance Period" has the definition assigned
to such term in Regulation S.

                  "Equipment" means the equipment described on the Schedule of
Equipment attached to the Equipment Lease Agreement Supplement and all related
appliances, parts, accessories, appurtenances, accessions, additions,
improvements, replacements and other equipment or components of any nature from
time to time incorporated or installed therein.

                                      -3-
<PAGE>   11

                  "Equipment Lease Agreement" means the equipment lease
agreement, dated as of the Issue Date, between BRL, as lessor, and UCI, as
lessee, as such agreement may be amended, supplemented or modified in accordance
with the terms thereof.

                  "Equity Contribution" has the meaning assigned to such term in
the Participation Agreement.

                  "Equity Offering" means an underwritten public offering or
private placement of Qualified Capital Stock of UCI or UCH, subsequent to the
Issue Date (which proceeds (at least to the extent of the purchase of Equipment
from BRL to fund the repurchase of Notes, BRL Term Loan and Equity
Contribution), if received by UCH, will be contributed as common equity to UCI).

                  "Equity Participants" has the meaning set forth in the
Participation Agreement.

                  "Equity Yield" has the meaning set forth in the Participation
Agreement.

                  "Event of Default" has the meaning provided in Section 5.01.

                  "Excepted Payments" has the meaning assigned to such term in
the Participation Agreement.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.

                  "Exchange Notes" means the Notes to be issued in exchange for
or upon transfer of the Initial Notes pursuant to the Exchange Offer or Shelf
Registration Statement provided for in the Registration Rights Agreement.

                  "Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.

                  "Exchange Offer Registration Statement" means the registration
statement filed by the Issuer, UCI and UCH pursuant to the Registration Rights
Agreement.

                  "Global Note Legend" means the legend set forth in Section
2.06(g)(ii) which is required to be placed on all Global Notes issued under this
Indenture.

                  "Global Notes" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A and B, issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f).

                  "guarantee" means, as applied to any obligation, (a) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (b) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such

                                      -4-
<PAGE>   12

obligation, including, without limiting the foregoing, the payment of amounts
drawn down by letters of credit.

                  "Holder" means a holder of Notes.

                  "IAI Global Note" means a global note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to an Institutional Accredited Investor.

                  "Indebtedness" has the meaning set forth in the Participation
Agreement.

                  "Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof.

                  "Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.

                  "Initial Notes" means any Notes issued under this Indenture
for so long as such securities constitute Restricted Securities.

                  "Initial Purchasers" means Deutsche Banc Alex. Brown Inc.,
First Union Securities, Inc., Goldman, Sachs & Co., Banc One Capital Markets,
Inc., and Scotia Capital (USA) Inc.

                  "Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act that is not also a QIB.

                  "interest" when used with respect to any Note means the sum of
any cash interest on such Note, including any applicable defaulted interest
pursuant to Section 2.12 and any Additional Interest pursuant to the
Registration Rights Agreement.

                  "Interest Payment Date" means the stated maturity date of an
installment of interest on the Notes.

                  "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.

                  "Issue Date" means the date of original issuance of the Notes.

                  "Issuers" has the meaning provided in the first paragraph of
this Indenture.

                  "Lease Events of Default" means an event of default specified
in Section 23 of the Equipment Lease Agreement.

                  "Legal Defeasance" has the meaning set forth in Section 7.01.

                                      -5-
<PAGE>   13

                  "Legal Holiday" has the meaning set forth in Section 10.07.

                  "Letter of Transmittal" means the letter of transmittal to be
prepared by the Issuers and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.

                  "Lien" means any lien, mortgage, deed of trust, pledge,
security interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).

                  "Limited Partnership Agreement" means that certain Amended and
Restated Limited Partnership Agreement of BRL, dated as of the Issue Date.

                  "Make-Whole Premium" with respect to a Note means an amount
equal to the greater of (i) 1.0% of the outstanding principal amount of such
Note and (ii) the excess of (a) the present value of the remaining interest,
premium and principal payments due on such Note as if such Note were redeemed on
February 15, 2005, computed using a discount rate equal to the Treasury Rate on
such date plus 0.50%, over (b) the outstanding principal amount of such Note.

                  "Majority BRL Term Loan Lenders" has the meaning assigned to
such term in the Participation Agreement.

                  "Majority Equity Participants" has the meaning assigned to
such term in the Participation Agreement.

                  "Majority Holders" has the meaning set forth in Section
8.02(a).

                  "Maturity Date" means February 15, 2008.

                  "Moody's" means Moody's Investors Service, Inc. and its
successors.

                  "Net Cash Proceeds" has the meaning set forth in the
Participation Agreement.

                  "Net Proceeds Offer" has the meaning set forth in Section
4.14.

                  "Net Proceeds Offer Amount" has the meaning set forth in the
Participation Agreement.

                  "Net Proceeds Offer Payment Date" has the meaning set forth in
Section 4.14.

                  "Net Proceeds Offer Trigger Date" has the meaning set forth in
the Participation Agreement.

                  "Notes" means, collectively, the Initial Notes and, when and
if issued as provided in the Registration Rights Agreement, the Exchange Notes,
treated as a single class of securities

                                      -6-
<PAGE>   14

as amended or supplemented from time to time in accordance with the terms
hereof, that are issued pursuant to this Indenture.

                  "Officer" means, with respect to any Person, the Chairman of
the Board of Directors, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer, the Controller, or the
Secretary of such Person, or any other officer designated by the Board of
Directors serving in a similar capacity.

                  "Officer's Certificate" means a certificate of an Issuer
signed by one Officer of such Issuer.

                  "144A Global Note" means a global note in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.

                  "Operative Documents" means the Equipment Lease Agreement and
the Participation Agreement.

                  "Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee complying with the
requirements of Sections 10.04 and 10.05, as they relate to the giving of an
Opinion of Counsel.

                  "Participant" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).

                  "Participating Broker-Dealer" means any broker-dealer that is
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Notes received by such broker-dealer in the Exchange Offer.

                  "Participation Agreement" means the participation agreement,
dated as of the Issue Date, among UCI, UCH, the Trustee, the lenders under the
BRL Term Loan, and Bankers Trust Company, as administrative agent and collateral
agent, and certain other parties thereto as syndicate agent, documentation agent
and managing agent, as such agreement may be amended, supplemented or modified
in accordance with the terms thereof.

                  "Paying Agent" has the meaning set forth in Section 2.03.

                  "Permitted Liens" has the meaning assigned to such term in the
Equipment Lease Agreement.

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

                                      -7-
<PAGE>   15

                  "Preferred Stock" of any Person means any Capital Stock of
such Person that has preferential rights to any other Capital Stock of such
Person with respect to dividends or redemptions or upon liquidation.

                  "principal" of any Indebtedness (including the Notes) means
the principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.

                  "Private Exchange Notes" has the meaning set forth in the
Registration Rights Agreement.

                  "Private Placement Legend" means the legend initially set
forth on the Notes in the form set forth in Section 2.06(g)(i).

                  "Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.

                  "Qualified Institutional Buyer" or "QIB" shall have the
meaning specified in Rule 144A under the Securities Act.

                  "Record Date" means the Record Date specified in the Notes.

                  "Redemption Date," when used with respect to any Note to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Notes.

                  "redemption price," when used with respect to any Note to be
redeemed, means the price fixed for such redemption, including principal and
premium, if any, pursuant to this Indenture and the Notes.

                  "Registrar" has the meaning provided in Section 2.03.

                  "Registration Rights Agreement" means the Registration Rights
Agreement dated as of the Issue Date among the Issuers, UCI, UCH and the Initial
Purchasers.

                  "Regulation S" means Regulation S under the Securities Act.

                  "Regulation S Global Note" means a Regulation S Temporary
Global Note or Regulation S Permanent Global Note, as appropriate.

                  "Regulation S Permanent Global Note" means a permanent Global
Note in the form of Exhibit A hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Distribution Compliance Period.

                  "Regulation S Temporary Global Note" means a temporary Global
Note in the form of Exhibit A hereto bearing the Private Placement Legend and
the Regulation S Temporary

                                      -8-
<PAGE>   16

Global Note Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule 903
of Regulation S.

                  "Regulation S Temporary Global Note Legend" shall be as set
forth in Section 2.06(g)(iii).

                  "Restricted Definitive Note" means a Definitive Note bearing
the Private Placement Legend.

                  "Restricted Global Note" means a Global Note bearing the
Private Placement Legend.

                  "Restricted Security" has the meaning assigned to such term in
Rule 144(a)(3) under the Securities Act; provided, however, that the Trustee
shall be entitled to request and conclusively rely on an Opinion of Counsel with
respect to whether any Note constitutes a Restricted Security.

                  "Rule 144A" means Rule 144A under the Securities Act.

                  "S&P" means Standard & Poor's Rating Services, a division of
the McGraw Hill Companies, Inc., and its successors.

                  "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.

                  "Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.

                  "TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb), as amended, as in effect on the date of this Indenture,
except as otherwise provided in Section 8.03.

                  "Treasury Rate" for any date, means the yield to maturity at
the time of computation of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
business days prior to the date the redemption is effected pursuant to Section
3.03(c) (the "Change of Control Redemption Date") (or, if such Statistical
Release is no longer published, any publicly available source of similar market
data)) most nearly equal to the period from the Change of Control Redemption
Date to February 15, 2005; provided, however, that if the period from the Change
of Control Redemption Date to February 15, 2005 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given except that
if the period from the Change of Control Redemption Date to Febru-

                                      -9-
<PAGE>   17

ary 15, 2005 is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used.

                  "Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer this Indenture, or in the case of
a successor trustee, an officer assigned to the department, division or group
performing the corporate trust work of such successor and assigned to administer
this Indenture.

                  "Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.

                  "UCH" means Universal Compression Holdings, Inc., a Delaware
corporation.

                  "UCI" means Universal Compression, Inc., a Texas corporation
and a wholly owned subsidiary of UCH.

                  "Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.

                  "Unrestricted Global Note" means a permanent Global Note in
the form of Exhibit A attached hereto that bears the Global Note Legend and that
has the "Schedule of Exchanges of Interests in the Global Note" attached thereto
and that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.

                  "U.S. Government Obligations" mean direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.

                  "U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.

                  SECTION 1.02.         Incorporation by Reference of TIA.

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

                  "indenture securities" means the Notes.

                  "indenture security holder" means a Holder.

                  "indenture to be qualified" means this Indenture.

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

                                      -10-
<PAGE>   18

                  "obligor" on the Indenture securities means each Issuer or any
other obligor on the Notes.

                  All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule and not otherwise defined herein have the meanings assigned to them
therein.

                  SECTION 1.03.         Rules of Construction.

                  Unless the context otherwise requires:

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

                  (2)      an accounting term not otherwise defined has the
         meaning assigned to it in accordance with GAAP on any date of
         determination;

                  (3)      "or" is not exclusive;

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

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

                  (6)      any reference to a statute, law or regulation means
         that statute, law or regulation as amended and in effect from time to
         time and includes any successor statute, law or regulation; provided,
         however, that any reference to the Bankruptcy Law shall mean the
         Bankruptcy Law as applicable to the relevant case.

                                   ARTICLE TWO

                                    THE NOTES

                  SECTION 2.01.         Form and Dating.

                  (a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A or B, as
applicable. The Notes may have notations, legends or endorsements required by
law, stock exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.

                  The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture, and the
Issuers and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.

                                      -11-
<PAGE>   19

However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.

                  (b) Global Notes. Notes issued in global form (a "Global
Note") shall be substantially in the form of Exhibit A or B. Notes issued in
definitive form shall be substantially in the form of Exhibit A or B. Each
Global Note shall represent such of the outstanding Notes as shall be specified
therein and each shall provide that it shall represent the aggregate principal
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06.

                  (c) Temporary Global Notes. Notes offered and sold in reliance
on Regulation S shall be issued initially in the form of the Regulation S
Temporary Global Note, which shall be deposited on behalf of the purchasers of
the Notes represented thereby with the Trustee, at its New York office, as
custodian for the Depositary, and registered in the name of the Depositary or
the nominee of the Depositary for the accounts of designated agents holding on
behalf of Euroclear or Clearstream, duly executed by the Issuers and
authenticated by the Trustee as hereinafter provided. The Distribution
Compliance Period shall be terminated upon the receipt by the Trustee of (i) a
written certificate from the Depositary, together with copies of certificates
from Euroclear and Clearstream certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Note (except to the extent of any
beneficial owners thereof who acquired an interest therein during the
Distribution Compliance Period pursuant to another exemption from registration
under the Securities Act and who will take delivery of a beneficial ownership
interest in a Global Note bearing a Private Placement Legend, all as
contemplated by Section 2.06(g)(i)), and (ii) an Officer's Certificate.
Following the termination of the Distribution Compliance Period, beneficial
interests in the Regulation S Temporary Global Note shall be exchanged for
beneficial interests in Regulation S Permanent Global Notes pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation S
Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary
Global Note. The aggregate principal amount of the Regulation S Temporary Global
Note and the Regulation S Permanent Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.

                  (d) Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Cedel Bank shall be applicable to
transfers of beneficial interests in the Regulation S Tempo-

                                      -12-
<PAGE>   20

rary Global Note and the Regulation S Permanent Global Notes that are held by
Participants through Euroclear or Clearstream.

                  SECTION 2.02.         Execution and Authentication; Aggregate
Principal Amount.

                  One Officer of each Issuer shall sign the Notes for such
Issuer by manual or facsimile signature.

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

                  A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.

                  The Trustee shall authenticate Notes for original issue from
time to time in one or more series upon a written order of the Issuers in the
form of an Officer's Certificate. Each such order shall specify the amount of
Notes to be authenticated, whether the Notes are to be Initial Notes or Exchange
Notes and whether the Notes are to be issued as Definitive Notes or Global Notes
or such other information as the Trustee shall reasonably request. Initially,
the Trustee shall authenticate $350 million in Notes, and additional amounts of
Notes not to exceed in the aggregate $300 million may be issued at any time and
from time to time after the Issue Date and before the one year anniversary of
the Issue Date; provided that any such issuance shall be subject to the
limitations contained in Section 9.2 of the Participation Agreement and the
other agreements governing any of BRL's, UCH's and UCI's obligations. Proceeds
from the issuance of any additional Notes, as well as a corresponding increase
in the BRL Term Loan and Equity Contribution, shall be applied by BRL to
purchase additional items of Equipment to lease to UCI under the Equipment Lease
Agreement; provided that at the time of any additional issuance of Notes, the
Issuers shall ensure that all items of Equipment subject to the Equipment Lease
Agreement shall have Appraisals which reflect an aggregate value that equals or
exceeds the Acquisition Cost of such items of Equipment, and will constitute
additional Collateral.

                  The Notes shall be issued only in fully registered form,
without coupons and only in denominations of $1,000 and any integral multiple
thereof. All Notes issued under this Indenture shall vote and consent together
on all matters as one class and no series of Notes will have the right to vote
or consent as a separate class on any matter.

                  The Trustee may appoint an authenticating agent acceptable to
the Issuers to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Issuers, UCI or UCH.

                                      -13-
<PAGE>   21

                  SECTION 2.03.         Registrar and Paying Agent.

                  The Issuers shall maintain an office or agency (which shall be
located in the Borough of Manhattan in the City of New York, State of New York)
where (a) Notes may be presented or surrendered for registration of transfer or
for exchange ("Registrar") and (b) Notes may be presented or surrendered for
payment ("Paying Agent"). The Registrar shall keep a register of the Notes and
of their transfer and exchange. The Issuers, upon prior written notice to the
Trustee, may have one or more co-Registrars and one or more additional paying
agents reasonably acceptable to the Trustee. The term "Paying Agent" includes
any additional Paying Agent. The Issuers may act as the Paying Agent, except
that for the purposes of payments on the Notes pursuant to Sections 4.13 and
4.14, none of the Issuers, UCI, UCH nor any respective Affiliate thereof may act
as Paying Agent.

                  The Issuers shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture, which agreement shall incorporate
the provisions of the TIA and implement the provisions of this Indenture that
relate to such Agent. The Issuers shall notify the Trustee in writing, in
advance, of the name and address of any such Agent. If the Issuers fail to
maintain a Registrar or Paying Agent, or fail to give the foregoing notice, the
Trustee shall act as such and shall be entitled to appropriate compensation in
accordance with Section 6.07.

                  The Issuers initially appoint the Trustee as Registrar and
Paying Agent, until such time as the Trustee has resigned or a successor has
been appointed. Any of the Registrar, the Paying Agent or any other agent may
resign upon 30 days' notice to the Issuers.

                  The Issuers initially appoint The Depository Trust Company to
act as Depositary.

                  SECTION 2.04.         Paying Agent To Hold Assets in Trust.

                  The Issuers shall require each Paying Agent other than the
Trustee to agree in writing that such Paying Agent shall hold in trust for the
benefit of the Holders or the Trustee all assets held by the Paying Agent for
the payment of principal of or interest on, the Notes (whether such assets have
been distributed to it by the Issuers or any other obligor on the Notes), and
the Paying Agent shall notify the Trustee of any Default by the Issuers (or any
other obligor on the Notes) in making any such payment. The Issuers at any time
may require a Paying Agent to distribute all assets held by it to the Trustee
and account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Issuers to the Paying Agent, the
Paying Agent shall have no further liability for such assets.

                  SECTION 2.05.         Holder Lists.

                  The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of the Holders. If the Trustee is not the

                                      -14-
<PAGE>   22

Registrar, the Issuers shall furnish or cause the Registrar to furnish to the
Trustee at least five days before each Record Date and at such other times as
the Trustee may request in writing a list as of such date and in such form as
the Trustee may reasonably require of the names and addresses of the Holders,
which list may be conclusively relied upon by the Trustee.

                  SECTION 2.06.         Transfer and Exchange.

                  (a) Transfer and Exchange of Global Notes. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Issuers for Definitive Notes if (i) the Issuers deliver
to the Trustee notice from the Depositary it is are unwilling or unable to
continue to act as Depositary or it is are no longer a clearing agency
registered under the Exchange Act and, in either case, a successor Depositary is
not appointed by the Issuers within 90 days after the date of such notice from
the Depositary or (ii) the Issuers in their sole discretion determine that the
Global Notes (in whole but not in part) should be exchanged for Definitive Notes
and deliver a written notice to such effect to the Trustee; provided that in no
event shall the Regulation S Temporary Global Note be exchanged by the Issuers
for Definitive Notes prior to (x) the expiration of the Distribution Compliance
Period and (y) the receipt by the Registrar of any certificates required
pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act. Upon the occurrence
of either of the preceding events in (i) or (ii) above, Definitive Notes shall
be issued in such names as the Depositary shall instruct the Trustee. Global
Notes also may be exchanged or replaced, in whole or in part, as provided in
Sections 2.07 and 2.10. Every Note authenticated and delivered in exchange for,
or in lieu of, a Global Note or any portion thereof, pursuant to this Section
2.06 or Section 2.07 or 2.10, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a); however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f).

                  (b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:

                  (i) Transfer of Beneficial Interests in the Same Global Note.
         Beneficial interests in any Restricted Global Note may be transferred
         to Persons who take delivery thereof in the form of a beneficial
         interest in the same Restricted Global Note in accordance with the
         transfer restrictions set forth in the Private Placement Legend;
         provided, however, that prior to the expiration of the Distribution
         Compliance Period, transfers of

                                      -15-
<PAGE>   23

         beneficial interests in the Regulation S Temporary Global Note may not
         be made to a U.S. Person or for the account or benefit of a U.S.
         Person. Beneficial interests in any Unrestricted Global Note may be
         transferred to Persons who take delivery thereof in the form of a
         beneficial interest in an Unrestricted Global Note. No written orders
         or instructions shall be required to be delivered to the Registrar to
         effect the transfers described in this Section 2.06(b)(i).

                 (ii) All Other Transfers and Exchanges of Beneficial Interests
         in Global Notes. In connection with all transfers and exchanges of
         beneficial interests that are not subject to Section 2.06(b)(i) above,
         the transferor of such beneficial interest must deliver to the
         Depositary either (A) (1) a written order from a Participant or an
         Indirect Participant given to the Depositary in accordance with the
         Applicable Procedures directing the Depositary to credit or cause to be
         credited a beneficial interest in another Global Note in an amount
         equal to the beneficial interest to be transferred or exchanged and (2)
         instructions given in accordance with the Applicable Procedures
         containing information regarding the Participant account to be credited
         with such increase or (B) (1) a written order from a Participant or an
         Indirect Participant given to the Depositary in accordance with the
         Applicable Procedures directing the Depositary to cause to be issued a
         Definitive Note in an amount equal to the beneficial interest to be
         transferred or exchanged and (2) instructions given by the Depositary
         to the Registrar containing information regarding the Person in whose
         name such Definitive Note shall be registered to effect the transfer or
         exchange referred to in (1) above; provided that in no event shall
         Definitive Notes be issued upon the transfer or exchange of beneficial
         interests in the Regulation S Temporary Global Note prior to (x) the
         expiration of the Distribution Compliance Period and (y) the receipt by
         the Registrar of any certificates required pursuant to Rule 903 under
         the Securities Act. Upon consummation of an Exchange Offer by the
         Issuers, UCH and UCI in accordance with Section 2.06(f), the
         requirements of this Section 2.06(b)(ii) shall be deemed to have been
         satisfied upon receipt by the Registrar of the instructions contained
         in the Letter of Transmittal delivered by the holder of such beneficial
         interests in the Restricted Global Notes. Upon satisfaction of all of
         the requirements for transfer or exchange of beneficial interests in
         Global Notes contained in this Indenture and the Notes or otherwise
         applicable under the Securities Act, the Trustee shall adjust the
         principal amount of the relevant Global Note(s) pursuant to Section
         2.06(h).

                (iii) Transfer of Beneficial Interests to Another Restricted
         Global Note. A beneficial interest in any Restricted Global Note may be
         transferred to a Person who takes delivery thereof in the form of a
         beneficial interest in another Restricted Global Note if the transfer
         complies with the requirements of Section 2.06(b)(ii) above and the
         Registrar receives the following:

                           (A) if the transferee will take delivery in the form
                  of a beneficial interest in the 144A Global Note, then the
                  transferor must deliver a certificate in the form of Exhibit C
                  hereto, including the certifications in item (1) thereof;

                                      -16-
<PAGE>   24

                           (B) if the transferee will take delivery in the form
                  of a beneficial interest in the Regulation S Temporary Global
                  Note or the Regulation S Global Note, then the transferor must
                  deliver a certificate in the form of Exhibit C hereto,
                  including the certifications in item (2) thereof; and

                           (C) if the transferee will take delivery in the form
                  of a beneficial interest in the IAI Global Note, then the
                  transferor must deliver a certificate in the form of Exhibit C
                  hereto, including the certifications and certificates and
                  Opinion of Counsel required by item (3) thereof, if
                  applicable.

                 (iv) Transfer and Exchange of Beneficial Interests in a
         Restricted Global Note for Beneficial Interests in the Unrestricted
         Global Note. A beneficial interest in any Restricted Global Note may be
         exchanged by any holder thereof for a beneficial interest in an
         Unrestricted Global Note or transferred to a Person who takes delivery
         thereof in the form of a beneficial interest in an Unrestricted Global
         Note if the exchange or transfer complies with the requirements of
         Section 2.06(b)(ii) above and:

                           (A) such exchange or transfer is effected pursuant to
                  the Exchange Offer Registration Statement in accordance with
                  the Registration Rights Agreement and the holder of the
                  beneficial interest to be transferred, in the case of an
                  exchange, or the transferee, in the case of a transfer,
                  certifies in the applicable Letter of Transmittal or via the
                  Depositary's book-entry system that it is not (1) a
                  broker-dealer, (2) a Person participating in the distribution
                  of the Exchange Notes or (3) a Person who is an Affiliate of
                  the Issuers, UCH or UCI;

                           (B) such transfer is effected pursuant to the Shelf
                  Registration Statement in accordance with the Registration
                  Rights Agreement;

                           (C) such transfer is effected by a Participating
                  Broker-Dealer pursuant to the Exchange Offer Registration
                  Statement in accordance with the Registration Rights
                  Agreement; or

                           (D) the Registrar receives the following:

                                    (1) if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           exchange such beneficial interest for a beneficial
                           interest in an Unrestricted Global Note, a
                           certificate from such holder in the form of Exhibit
                           D, including the certifications in item (1)(a)
                           thereof; or

                                    (2) if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           transfer such beneficial interest to a Person who
                           shall take delivery thereof in the form of a
                           beneficial interest in an Unrestricted Global Note, a
                           certificate from such holder in the form of Exhibit
                           C, including the certifications in item (4) thereof;

                                      -17-
<PAGE>   25

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

                  If any such transfer is effected pursuant to subparagraph (B)
         or (D) above at a time when an Unrestricted Global Note has not yet
         been issued, the Issuers shall issue and, upon receipt of a written
         authentication order in accordance with Section 2.02, the Trustee shall
         authenticate one or more Unrestricted Global Notes in an aggregate
         principal amount equal to the aggregate principal amount of beneficial
         interests transferred pursuant to subparagraph (B) or (D) above.

                  Beneficial interests in an Unrestricted Global Note cannot be
         exchanged for, or transferred to Persons who take delivery thereof in
         the form of, a beneficial interest in a Restricted Global Note.

                  (c) Transfer or Exchange of Beneficial Interests for
         Definitive Notes.

                  (i) Beneficial Interests in Restricted Global Notes to
         Restricted Definitive Notes. If any holder of a beneficial interest in
         a Restricted Global Note proposes to exchange such beneficial interest
         for a Restricted Definitive Note or to transfer such beneficial
         interest to a Person who takes delivery thereof in the form of a
         Restricted Definitive Note, then, upon receipt by the Registrar of the
         following documentation:

                           (A) if the holder of such beneficial interest in a
                  Restricted Global Note proposes to exchange such beneficial
                  interest for a Restricted Definitive Note, a certificate from
                  such holder in the form of Exhibit D, including the
                  certifications in item (2)(a) thereof;

                           (B) if such beneficial interest is being transferred
                  to a QIB in accordance with Rule 144A under the Securities
                  Act, a certificate to the effect set forth in Exhibit C,
                  including the certifications in item (1) thereof;

                           (C) if such beneficial interest is being transferred
                  to a Non-U.S. Person in an offshore transaction in accordance
                  with Rule 903 or Rule 904 under the Securities Act, a
                  certificate to the effect set forth in Exhibit C, including
                  the certifications in item (2) thereof;

                           (D) if such beneficial interest is being transferred
                  pursuant to an exemption from the registration requirements of
                  the Securities Act in accordance with Rule 144 under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit C, including the certifications in item (3)(a)
                  thereof;

                                      -18-
<PAGE>   26

                           (E) if such beneficial interest is being transferred
                  to an Institutional Accredited Investor in reliance on an
                  exemption from the registration requirements of the Securities
                  Act other than those listed in subparagraphs (B) through (D)
                  above, a certificate to the effect set forth in Exhibit C,
                  including the certifications, certificates and Opinion of
                  Counsel required by item (3) thereof, if applicable;

                           (F) if such beneficial interest is being transferred
                  to the Issuers or any of their subsidiaries, a certificate to
                  the effect set forth in Exhibit C, including the
                  certifications in item (3)(b) thereof; or

                           (G) if such beneficial interest is being transferred
                  pursuant to an effective registration statement under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit C, including the certifications in item (3)(c)
                  thereof,

         the Trustee shall cause the aggregate principal amount of the
         applicable Global Note to be reduced accordingly pursuant to Section
         2.06(h), and the Issuers shall execute and the Trustee shall
         authenticate and deliver to the Person designated in the instructions a
         Definitive Note in the appropriate principal amount. Any Definitive
         Note issued in exchange for a beneficial interest in a Restricted
         Global Note pursuant to this Section 2.06(c) shall be registered in
         such name or names and in such authorized denomination or denominations
         as the holder of such beneficial interest shall instruct the Registrar
         through instructions from the Depositary and the Participant or
         Indirect Participant. The Trustee shall deliver such Definitive Notes
         to the Persons in whose names such Notes are so registered. Any
         Definitive Note issued in exchange for a beneficial interest in a
         Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear
         the Private Placement Legend and shall be subject to all restrictions
         on transfer contained therein.

                 (ii) Notwithstanding Sections 2.06(c)(i)(A) and (C), a
         beneficial interest in the Regulation S Temporary Global Note may not
         be exchanged for a Definitive Note or transferred to a Person who takes
         delivery thereof in the form of a Definitive Note prior to (x) the
         expiration of the Distribution Compliance Period and (y) the receipt by
         the Registrar of any certificates required pursuant to Rule
         903(c)(3)(ii)(B) under the Securities Act, except in the case of a
         transfer pursuant to an exemption from the registration requirements of
         the Securities Act other than Rule 903 or Rule 904.

                (iii) Beneficial Interests in Restricted Global Notes to
         Unrestricted Definitive Notes. A holder of a beneficial interest in a
         Restricted Global Note may exchange such beneficial interest for an
         Unrestricted Definitive Note or may transfer such beneficial interest
         to a Person who takes delivery thereof in the form of an Unrestricted
         Definitive Note only if:

                           (A) such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration Rights
                  Agreement and the holder of such beneficial interest, in the
                  case of an exchange, or the transferee, in the case of a

                                      -19-
<PAGE>   27

                  transfer, certifies in the applicable Letter of Transmittal
                  that it is not (1) a broker-dealer, (2) a Person participating
                  in the distribution of the Exchange Notes or (3) a Person who
                  is an Affiliate (as defined in Rule 144) of the Issuers, UCH
                  or UCI;

                           (B) such transfer is effected pursuant to the Shelf
                  Registration Statement in accordance with the Registration
                  Rights Agreement;

                           (C) such transfer is effected by a Participating
                  Broker-Dealer pursuant to the Exchange Offer Registration
                  Statement in accordance with the Registration Rights
                  Agreement; or

                           (D) the Registrar receives the following:

                                    (1) if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           exchange such beneficial interest for a Definitive
                           Note that does not bear the Private Placement Legend,
                           a certificate from such holder in the form of Exhibit
                           D, including the certifications in item (1)(b)
                           thereof; or

                                    (2) if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           transfer such beneficial interest to a Person who
                           shall take delivery thereof in the form of a
                           Definitive Note that does not bear the Private
                           Placement Legend, a certificate from such holder in
                           the form of Exhibit C, including the certifications
                           in item (4) thereof;

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

                 (iv) Beneficial Interests in Unrestricted Global Notes to
         Unrestricted Definitive Notes. If any holder of a beneficial interest
         in an Unrestricted Global Note proposes to exchange such beneficial
         interest for a Definitive Note or to transfer such beneficial interest
         to a Person who takes delivery thereof in the form of a Definitive
         Note, then, upon satisfaction of the conditions set forth in Section
         2.06(b)(ii), the Trustee shall cause the aggregate principal amount of
         the applicable Global Note to be reduced accordingly pursuant to
         Section 2.06(h), and the Issuers shall execute and the Trustee shall
         authenticate and deliver to the Person designated in the instructions a
         Definitive Note in the appropriate principal amount. Any Definitive
         Note issued in exchange for a beneficial interest pursuant to this
         Section 2.06(c)(iv) shall be registered in such name or names and in
         such authorized denomination or denominations as the holder of such
         beneficial interest shall instruct the Registrar through instructions
         from the Depositary and the Participant or Indirect Participant. The
         Trustee shall deliver such Definitive Notes to the Persons in whose

                                      -20-
<PAGE>   28

         names such Notes are so registered. Any Definitive Note issued in
         exchange for a beneficial interest pursuant to this Section 2.06(c)(iv)
         shall not bear the Private Placement Legend.

                  (d) Transfer and Exchange of Definitive Notes for Beneficial
         Interests.

                  (i) Restricted Definitive Notes to Beneficial Interests in
         Restricted Global Notes. If any Holder of a Restricted Definitive Note
         proposes to exchange such Note for a beneficial interest in a
         Restricted Global Note or to transfer such Restricted Definitive Notes
         to a Person who takes delivery thereof in the form of a beneficial
         interest in a Restricted Global Note, then, upon receipt by the
         Registrar of the following documentation:

                           (A) if the Holder of such Restricted Definitive Note
                  proposes to exchange such Note for a beneficial interest in a
                  Restricted Global Note, a certificate from such Holder in the
                  form of Exhibit D, including the certifications in item (2)(b)
                  thereof;

                           (B) if such Restricted Definitive Note is being
                  transferred to a QIB in accordance with Rule 144A under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit C, including the certifications in item (1) thereof;

                           (C) if such Restricted Definitive Note is being
                  transferred to a Non-U.S. Person in an offshore transaction in
                  accordance with Rule 903 or Rule 904 under the Securities Act,
                  a certificate to the effect set forth in Exhibit C, including
                  the certifications in item (2) thereof;

                           (D) if such Restricted Definitive Note is being
                  transferred pursuant to an exemption from the registration
                  requirements of the Securities Act in accordance with Rule 144
                  under the Securities Act, a certificate to the effect set
                  forth in Exhibit C, including the certifications in item
                  (3)(a) thereof;

                           (E) if such Restricted Definitive Note is being
                  transferred to an Institutional Accredited Investor in
                  reliance on an exemption from the registration requirements of
                  the Securities Act other than those listed in subparagraphs
                  (B) through (D) above, a certificate to the effect set forth
                  in Exhibit C, including the certifications, certificates and
                  Opinion of Counsel required by item (3) thereof, if
                  applicable;

                           (F) if such Restricted Definitive Note is being
                  transferred to the Issuers, a certificate to the effect set
                  forth in Exhibit C, including the certifications in item
                  (3)(b) thereof; or

                           (G) if such Restricted Definitive Note is being
                  transferred pursuant to an effective registration statement
                  under the Securities Act, a certificate to the effect set
                  forth in Exhibit C, including the certifications in item
                  (3)(c) thereof,

                                      -21-
<PAGE>   29

         the Trustee shall cancel the Restricted Definitive Note, increase or
         cause to be increased the aggregate principal amount of, in the case of
         clause (A) above, the appropriate Restricted Global Note, in the case
         of clause (B) above, the 144A Global Note, in the case of clause (C)
         above, the Regulation S Global Note, and in all other cases, the IAI
         Global Note.

                 (ii) Restricted Definitive Notes to Beneficial Interests in
         Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
         exchange such Note for a beneficial interest in an Unrestricted Global
         Note or transfer such Restricted Definitive Note to a Person who takes
         delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Note only if:

                           (A) such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration Rights
                  Agreement and the Holder, in the case of an exchange, or the
                  transferee, in the case of a transfer, certifies in the
                  applicable Letter of Transmittal that it is not (1) a
                  broker-dealer, (2) a Person participating in the distribution
                  of the Exchange Notes or (3) a Person who is an Affiliate of
                  the Issuers, UCH or UCI;

                           (B) such transfer is effected pursuant to the Shelf
                  Registration Statement in accordance with the Registration
                  Rights Agreement;

                           (C) such transfer is effected by a Participating
                  Broker-Dealer pursuant to the Exchange Offer Registration
                  Statement in accordance with the Registration Rights
                  Agreement; or

                           (D) the Registrar receives the following:

                                    (1) if the Holder of such Definitive Notes
                           proposes to exchange such Notes for a beneficial
                           interest in the Unrestricted Global Note, a
                           certificate from such Holder in the form of Exhibit
                           D, including the certifications in item (1)(c)
                           thereof; or

                                    (2) if the Holder of such Definitive Notes
                           proposes to transfer such Notes to a Person who shall
                           take delivery thereof in the form of a beneficial
                           interest in the Unrestricted Global Note, a
                           certificate from such Holder in the form of Exhibit
                           C, including the certifications in item (4) thereof;

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

                                      -22-
<PAGE>   30

                  Upon satisfaction of the conditions of any of the
         subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the
         Definitive Notes and increase or cause to be increased the aggregate
         principal amount of the Unrestricted Global Note.

                (iii) Unrestricted Definitive Notes to Beneficial Interests in
         Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
         may exchange such Note for a beneficial interest in an Unrestricted
         Global Note or transfer such Definitive Notes to a Person who takes
         delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Note at any time. Upon receipt of a request for
         such an exchange or transfer, the Trustee shall cancel the applicable
         Unrestricted Definitive Note and increase or cause to be increased the
         aggregate principal amount of one of the Unrestricted Global Notes.

                  If any such exchange or transfer from a Definitive Note to a
         beneficial interest is effected pursuant to subparagraph (ii)(B),
         (ii)(D) or (iii) above at a time when an Unrestricted Global Note has
         not yet been issued, the Issuers shall issue and, upon receipt of a
         written authentication order in accordance with Section 2.02, the
         Trustee shall authenticate one or more Unrestricted Global Notes in an
         aggregate principal amount equal to the principal amount of Definitive
         Notes so transferred.

                  (e) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).

                  (i) Restricted Definitive Notes to Restricted Definitive
         Notes. Any Restricted Definitive Note may be transferred to and
         registered in the name of Persons who take delivery thereof in the form
         of a Restricted Definitive Note if the Registrar receives the
         following:

                           (A) if the transfer will be made pursuant to Rule
                  144A under the Securities Act, then the transferor must
                  deliver a certificate in the form of Exhibit C, including the
                  certifications in item (1) thereof;

                           (B) if the transfer will be made pursuant to Rule 903
                  or Rule 904, then the transferor must deliver a certificate in
                  the form of Exhibit C, including the certifications in item
                  (2) thereof; and

                           (C) if the transfer will be made pursuant to any
                  other exemption from the registration requirements of the
                  Securities Act, then the transferor must deliver

                                      -23-
<PAGE>   31

                  a certificate in the form of Exhibit C, including the
                  certifications, certificates and Opinion of Counsel required
                  by item (3) thereof, if applicable.

                 (ii) Restricted Definitive Notes to Unrestricted Definitive
         Notes. Any Restricted Definitive Note may be exchanged by the Holder
         thereof for an Unrestricted Definitive Note or transferred to a Person
         or Persons who take delivery thereof in the form of an Unrestricted
         Definitive Note if:

                           (A) such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration Rights
                  Agreement and the Holder, in the case of an exchange, or the
                  transferee, in the case of a transfer, certifies in the
                  applicable Letter of Transmittal that it is not (1) a
                  broker-dealer, (2) a Person participating in the distribution
                  of the Exchange Notes or (3) a Person who is an Affiliate of
                  the Issuers, UCH or UCI;

                           (B) any such transfer is effected pursuant to the
                  Shelf Registration Statement in accordance with the
                  Registration Rights Agreement;

                           (C) any such transfer is effected by a Participating
                  Broker-Dealer pursuant to the Exchange Offer Registration
                  Statement in accordance with the Registration Rights
                  Agreement; or

                           (D) the Registrar receives the following:

                                    (1) if the Holder of such Restricted
                           Definitive Notes proposes to exchange such Notes for
                           an Unrestricted Definitive Note, a certificate from
                           such Holder in the form of Exhibit D, including the
                           certifications in item (1)(d) thereof; or

                                    (2) if the Holder of such Restricted
                           Definitive Notes proposes to transfer such Notes to a
                           Person who shall take delivery thereof in the form of
                           an Unrestricted Definitive Note, a certificate from
                           such Holder in the form of Exhibit C, including the
                           certifications in item (4) thereof;

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests, an Opinion of Counsel in form
                  reasonably acceptable to the Registrar to the effect that such
                  exchange or transfer is in compliance with the Securities Act
                  and that the restrictions on transfer contained herein and in
                  the Private Placement Legend are no longer required in order
                  to maintain compliance with the Securities Act.

                (iii) Unrestricted Definitive Notes to Unrestricted Definitive
         Notes. A Holder of Unrestricted Definitive Notes may transfer such
         Notes to a Person who takes delivery thereof in the form of an
         Unrestricted Definitive Note. Upon receipt of a request to reg-

                                      -24-
<PAGE>   32

         ister such a transfer, the Registrar shall register the Unrestricted
         Definitive Notes pursuant to the instructions from the Holder thereof.

                  (f) Exchange Offer. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Issuers shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not Affiliates of the Issuers, UCH or UCI, and accepted
for exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted Definitive
Notes accepted for exchange in the Exchange Offer. Concurrently with the
issuance of such Notes, the Trustee shall cause the aggregate principal amount
of the applicable Restricted Global Notes to be reduced accordingly, and the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amounts.

                  (g) Legends. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.

                  (i) Private Placement Legend.

                           (A) Except as permitted by subparagraph (B) below,
                  each Global Note and each Definitive Note (and all Notes
                  issued in exchange therefor or substitution thereof) shall
                  bear the legend in substantially the following form:

                           THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
                           SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
                           ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
                           WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
                           BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW.
                           BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
                           THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
                           DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B)
                           IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
                           SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
                           WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT
                           IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE
                           501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
                           (AN "ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL
                           NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
                           THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS
                           SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDI-

                                      -25-
<PAGE>   33

                           ARY THEREOF, (B) INSIDE THE UNITED STATES TO A
                           QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
                           144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
                           STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
                           TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF
                           BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
                           LETTER CONTAINING CERTAIN REPRESENTATIONS AND
                           AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
                           OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE
                           OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D)
                           OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
                           IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT
                           (IF AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM
                           REGISTRATION PROVIDED BY RULE 144 UNDER THE
                           SECURITIES ACT (IF AVAILABLE), OR IN ACCORDANCE WITH
                           ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
                           OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
                           COUNSEL IF THE ISSUERS SO REQUEST), OR (F) PURSUANT
                           TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
                           SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO
                           EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
                           NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
                           CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN
                           TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
                           SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED
                           INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
                           FURNISH TO THE TRUSTEE AND THE ISSUERS SUCH
                           CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
                           AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT
                           SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
                           FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
                           REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS
                           USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
                           "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING
                           GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
                           ACT.

                           (B) Notwithstanding the foregoing, any Global Note or
                  Definitive Note issued pursuant to subparagraph (b)(iv),
                  (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
                  of this Section 2.06 (and all Notes issued in exchange
                  therefor or substitution thereof) shall not bear the Private
                  Placement Legend.

                  (ii) Global Note Legend. Each Global Note shall bear a legend
         in substantially the following form:

                                      -26-
<PAGE>   34

                  THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
                  INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR
                  THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
                  TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
                  (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
                  REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS
                  GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
                  TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
                  MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
                  SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
                  TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
                  CONSENT OF THE ISSUERS.

                  (iii) Regulation S Temporary Global Note Legend. The
         Regulation S Temporary Global Note shall bear a legend in substantially
         the following form:

                  THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL
                  NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE
                  FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS
                  DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS
                  OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
                  TO RECEIVE PAYMENT OF INTEREST HEREON.

                  (h) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased
or canceled in whole and not in part, each such Global Note shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.11. At any
time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount at maturity of Notes represented by such Global Note shall
be reduced accordingly and an endorsement shall be made on such Global Note by
the Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

                  (i) General Provisions Relating to Transfers and Exchanges.

                                      -27-
<PAGE>   35

                  (i) To permit registrations of transfers and exchanges, the
         Issuers shall execute and the Trustee shall authenticate Global Notes
         and Definitive Notes upon the Issuers' order or at the Registrar's
         request.

                 (ii) No service charge shall be made to a holder of a
         beneficial interest in a Global Note or to a Holder of a Definitive
         Note for any registration of transfer or exchange, but the Issuers may
         require payment of a sum sufficient to cover any transfer tax or
         similar governmental charge payable in connection therewith (other than
         any such transfer taxes or similar governmental charge payable upon
         exchange or transfer pursuant to Sections 2.10, 3.07, 4.13, 4.14 and
         8.05).

                (iii) The Registrar shall not be required (A) to register the
         transfer of or to exchange any Notes during a period beginning at the
         opening of business 15 days before the day of the mailing of notice of
         redemption under Section 3.04 and ending at the close of business on
         such day, or (B) to register the transfer of or exchange any Note
         selected for redemption in whole or in part, except the unredeemed
         portion of any Note being redeemed in part.

                 (iv) All Global Notes and Definitive Notes issued upon any
         registration of transfer or exchange of Global Notes or Definitive
         Notes shall be the valid obligations of the Issuers, evidencing the
         same debt, and entitled to the same benefits under this Indenture, as
         the Global Notes or Definitive Notes surrendered upon such registration
         of transfer or exchange.

                  (v) The Issuers shall not be required (A) to issue, to
         register the transfer of or to exchange any Notes during a period
         beginning at the opening of business 15 days before the day of the
         mailing of notice of redemption under Section 3.04 and ending at the
         close of business on such day, or (B) to register the transfer of or to
         exchange any Note so selected for redemption in whole or in part,
         except the unredeemed portion of any Note being redeemed in part.

                 (vi) Prior to due presentment for the registration of a
         transfer of any Note, the Trustee, any Agent and the Issuers may deem
         and treat the Person in whose name any Note is registered as the
         absolute owner of such Note for the purpose of receiving payment of
         principal of and interest on such Notes and for all other purposes, and
         none of the Trustee, any Agent or the Issuers shall be affected by
         notice to the contrary.

                (vii) The Trustee shall authenticate Global Notes and Definitive
         Notes in accordance with the provisions of Section 2.02.

               (viii) All certifications, certificates and Opinions of Counsel
         required to be submitted to the Registrar pursuant to this Section 2.06
         to effect a registration of transfer or exchange may be submitted by
         facsimile.

                                      -28-
<PAGE>   36

                  The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Notes (including any transfers between or among Depositary
participants or beneficial owners of interests in any Global Note) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.

                  SECTION 2.07.         Replacement Notes.

                  If a mutilated Note is surrendered to the Trustee or if the
Holder of a Note claims that the Note has been lost, destroyed or wrongfully
taken, the Issuers shall issue and the Trustee shall authenticate a replacement
Note if the Trustee's requirements for replacement of the Notes are met. Such
Holder must provide satisfactory evidence of such loss, destruction or taking,
and an indemnity bond or other indemnity of reasonable tenor, sufficient in the
reasonable judgment of the Issuers and the Trustee, to protect the Issuers, the
Trustee or any Agent from any loss which any of them may suffer if a Note is
replaced. Every replacement Note shall constitute an obligation of the Issuers.
The Issuers and the Trustee each may charge such Holder for its expenses in
replacing such Note.

                  SECTION 2.08.         Outstanding Notes.

                  Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those canceled by it, those delivered to it
for cancellation and those described in this Section 2.08 as not outstanding.
Subject to the provisions of Section 2.09, a Note does not cease to be
outstanding because the Issuers, UCI, UCH or any of their respective Affiliates
holds the Note.

                  If a Note is replaced pursuant to Section 2.07 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.07.

                  If on a Redemption Date or the Maturity Date the Paying Agent
holds U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of
the principal and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes shall be deemed not to
be outstanding and interest on them shall cease to accrue.

                  SECTION 2.09.         Treasury Notes.

                  In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Issuers, UCI, UCH or any of their respective Affiliates shall be
considered as though they are not outstanding, except

                                      -29-
<PAGE>   37

that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which a Trust
Officer of the Trustee actually knows are so owned shall be so considered. The
Issuers shall notify the Trustee, in writing, when they or, to their knowledge,
any of their Affiliates, UCI, UCH or any of their respective Affiliates
repurchases or otherwise acquires Notes, of the aggregate principal amount of
such Notes so repurchased or otherwise acquired and such other information as
the Trustee may reasonably request and the Trustee shall be entitled to rely
thereon.

                  SECTION 2.10.         Temporary Notes.

                  Until definitive Notes are ready for delivery, the Issuers may
prepare and the Trustee shall authenticate temporary Notes upon receipt of a
written order of each of the Issuers in the form of an Officer's Certificate.
The Officer's Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be authenticated.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Issuers consider appropriate for temporary Notes and so
indicate in the Officer's Certificate. Without unreasonable delay, the Issuers
shall prepare and the Trustee shall authenticate, upon receipt of a written
order of the Issuers pursuant to Section 2.02, definitive Notes in exchange for
temporary Notes.

                  SECTION 2.11.         Cancellation.

                  The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee, or
at the direction of the Trustee, the Registrar or the Paying Agent, and no one
else, shall cancel and, at the written direction of the Issuers, shall dispose,
in its customary manner, of all Notes surrendered for transfer, exchange,
payment or cancellation. The Trustee shall maintain a record of all Notes
disposed of by it and, upon request by the Issuers, provide a copy of such
record to the Issuers. Subject to Section 2.07, the Issuers may not issue new
Notes to replace Notes that it has paid or delivered to the Trustee for
cancellation. If the Issuers shall acquire any of the Notes, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Notes unless and until the same are surrendered to the
Trustee for cancellation pursuant to this Section 2.11.

                  SECTION 2.12.         Defaulted Interest.

                  The Issuers will pay interest on overdue principal from time
to time on demand at the rate of interest then borne by the Notes. The Issuers
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate of interest then borne by the Notes. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months, and, in the case of a
partial month, the actual number of days elapsed.

                  If the Issuers default in a payment of interest on the Notes,
they shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, to the

                                      -30-
<PAGE>   38

Persons who are Holders on a subsequent special record date, which special
record date shall be the fifteenth day next preceding the date fixed by the
Issuers for the payment of defaulted interest or the next succeeding Business
Day if such date is not a Business Day. The Issuers shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment (a "Default Interest Payment Date"), and at the
same time the Issuers 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 on or
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
provided in this Section 2.12; provided, however, that in no event shall the
Issuers deposit monies proposed to be paid in respect of defaulted interest
later than 11:00 a.m. New York City time of the proposed Default Interest
Payment Date. At least 15 days before the subsequent special record date, the
Issuers shall mail (or cause to be mailed) to each Holder, as of a recent date
selected by the Issuers, with a copy to the Trustee, a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 5.01(a) shall be paid to
Holders as of the regular record date for the Interest Payment Date for which
interest has not been paid. Notwithstanding the foregoing, the Issuers may make
payment of any defaulted interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange.

                  SECTION 2.13.         CUSIP Number.

                  The Issuers in issuing the Notes may use a "CUSIP" number,
and, if so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided, however, that no representation
is hereby deemed to be made by the Trustee as to the correctness or accuracy of
the CUSIP number printed in the notice or on the Notes, and that reliance may be
placed only on the other identification numbers printed on the Notes. The
Issuers shall promptly notify the Trustee of any change in the CUSIP number.

                  SECTION 2.14.         Deposit of Monies.

                  Prior to 11:00 a.m. New York City time on each Interest
Payment Date, Maturity Date, Redemption Date, Change of Control Payment Date and
Net Proceeds Offer Payment Date, the Issuers shall have deposited with the
Paying Agent in immediately available funds money sufficient to make cash
payments, if any, due on such Interest Payment Date, Maturity Date, Redemption
Date, Change of Control Payment Date and Net Proceeds Offer Payment Date, as the
case may be, in a timely manner which permits the Paying Agent to remit payment
to the Holders on such Interest Payment Date, Maturity Date, Redemption Date,
Change of Control Payment Date and Net Proceeds Offer Payment Date, as the case
may be.

                                      -31-

<PAGE>   39
                                  ARTICLE THREE

                                   REDEMPTION

                  SECTION 3.01. Notices to Trustee.

                  If the Issuers elect to redeem Notes pursuant to Paragraph 5,
6 or 7 of the Notes and Section 3.03, they shall notify the Trustee and the
Paying Agent in writing of the Redemption Date and the principal amount of the
Notes to be redeemed.

                  The Issuers shall give each notice provided for in this
Section 3.01 at least 30 but not more than 60 days before the Redemption Date
(unless a shorter notice period shall be satisfactory to the Trustee, as
evidenced in a writing signed on behalf of the Trustee), together with an
Officer's Certificate of each Issuer stating that such redemption shall comply
with the conditions contained herein and in the Notes, the Redemption Date, the
redemption price and the principal amount of the Notes to be redeemed.

                  If the Issuers are required to make an offer to redeem Notes
pursuant to the provisions of Section 4.13 or 4.14 hereof, it shall furnish to
the Trustee at least 30 days but not more than 60 days before a Redemption Date
(or such shorter period as may be agreed to by the Trustee in writing), an
Officer's Certificate setting forth (i) the Section of this Indenture pursuant
to which the redemption shall occur, (ii) the Redemption Date, (iii) the maximum
principal amount of Notes to be redeemed, (iv) the redemption price and (v) a
statement to the effect that (a) the conditions set forth in Section 4.14 have
been satisfied or (b) a Change of Control has occurred, as applicable.

                  SECTION 3.02. Selection of Notes To Be Redeemed.

                  In the event that less than all of the Notes are to be
redeemed at any time, selection of such Notes for redemption will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which such Notes are listed or, if such Notes are not then
listed on a national securities exchange, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate; provided, however, that
no Notes of a principal amount of U.S. $1,000 or less shall be redeemed in part;
provided, further, that if a partial redemption is made with the proceeds of a
permitted purchase of Equipment by UC1 from the proceeds of an Equity Offering,
selection of the Notes or portions thereof for redemption shall be made by the
Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to DTC procedures), unless such method is otherwise
prohibited. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. Notice of
redemption shall be mailed by the Issuers by first-class mail at least 30 but
not more than 60 days before the redemption date to each Holder of Notes to be
redeemed at its registered address. If any Note is to be redeemed in part only,
the notice of redemption that relates to such Note shall state the portion of
the principal amount thereof to be redeemed. A new Note in a principal amount
equal to the unredeemed portion thereof will be issued in the

                                      -32-
<PAGE>   40
name of the Holder thereof upon cancellation of the original Note. On and after
the redemption date, interest will cease to accrue on Notes or portions thereof
called for redemption as long as the Issuers have deposited with the Paying
Agent funds in satisfaction of the applicable redemption price pursuant to this
Indenture.

                  SECTION 3.03. Optional Redemption.

                  (a) Optional Redemption. The Notes will be redeemable by the
Issuers, in whole at any time or in part from time to time, on and after
February 15, 2005, upon not less than 30 nor more than 60 days' notice, in the
event of a permitted purchase (pursuant to Section 28.4.1 of the Equipment Lease
Agreement) of Equipment from BRL by UCI with the proceeds of such purchase
allocable to the Notes, at the following redemption prices (expressed as
percentages of the principal amount thereof) if redeemed during the twelve-month
period commencing on February 15 of the year set forth below, plus, in each
case, accrued and unpaid interest thereon, if any, to the date of redemption:

<TABLE>
<CAPTION>
                 Year                                                             Percentage
                 ----                                                             ----------
<S>                                                                               <C>
                 2005..........................................................   104.438%
                 2006..........................................................   102.219%
                 2007..........................................................   100.000%
</TABLE>

                  (b) Optional Redemption upon Equity Offerings. At any time, or
from time to time, on or prior to February 15, 2004, UCI may, at its option,
apply the net cash proceeds of one or more Equity Offerings to purchase
Equipment from BRL pursuant to Section 28.4.1 of the Equipment Lease Agreement.
The Issuers will use such proceeds allocable to the Notes to redeem up to 35% of
the Notes at a redemption price equal to 108.875% of the principal amount of the
Notes to be redeemed on the date of redemption, plus accrued and unpaid
interest, if any; provided that at least 65% of the aggregate principal amount
of Notes originally issued remains outstanding immediately after any such
redemption. The permitted purchase and such redemption must be completed not
more than 120 days after the consummation of such Equity Offering.

                  (c) Optional Redemption upon Change of Control. Upon the
occurrence of a Change of Control prior to February 15, 2005, UCI may, at its
option, purchase Equipment from BRL pursuant to Section 28.4.3 of the Equipment
Lease Agreement, and the Issuers shall apply the proceeds thereof allocable to
the Notes to redeem all, but not less than all, of the outstanding Notes at a
redemption price equal to 100% of the principal amount thereof plus the
applicable Make Whole Premium (a "Change of Control Redemption"). The Issuers
shall give not less than 30 nor more than 60 days' notice of such redemption
within 30 days following a Change of Control.

                  Each of the foregoing redemptions of Notes referred to in this
Section 3.03 will require the prepayment by BRL of a corresponding percentage of
the then outstanding BRL Term Loan and Equity Investment.

                                      -33-
<PAGE>   41
                  SECTION 3.04. Notice of Redemption.

                  At least 30 days but not more than 60 days before the
Redemption Date, the Issuers shall mail or cause to be mailed a notice of
redemption by first class mail to each Holder of Notes to be redeemed at its
registered address, with a copy to the Trustee and any Paying Agent. At the
Issuers' request, the Trustee shall give the notice of redemption in the
Issuers' names and at the Issuers' expense. The Issuers shall provide such
notices of redemption to the Trustee at least fifteen days before the intended
mailing date. In any case, failure to give such notice or any defect in the
notice to the holder of any Note shall not affect the validity of the proceeding
for the redemption of any other Note.

                  Each notice of redemption shall identify (including the CUSIP
number) the Notes to be redeemed and shall state:

                  (1) the Redemption Date;

                  (2) the redemption price and the amount of accrued interest,
         if any, to be paid;

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

                  (4) the subparagraph of the Notes pursuant to which such
         redemption is being made;

                  (5) that Notes called for redemption must be surrendered to
         the Paying Agent to collect the redemption price plus accrued interest,
         if any;

                  (6) that, unless the Issuers default in making the redemption
         payment, interest on Notes or applicable portions thereof called for
         redemption ceases to accrue on and after the Redemption Date, and the
         only remaining right of the Holders of such Notes is to receive payment
         of the applicable redemption price plus accrued interest as of the
         Redemption Date, if any, upon surrender to the Paying Agent of the
         Notes redeemed;

                  (7) if any Note is being redeemed in part, the portion of the
         principal amount of such Note to be redeemed and that, after the
         Redemption Date, and upon surrender of such Note, a new Note or Notes
         in the aggregate principal amount equal to the unredeemed portion
         thereof will be issued; and

                  (8) if fewer than all the Notes are to be redeemed, the
         identification of the particular Notes (or portion thereof) to be
         redeemed, as well as the aggregate principal amount of Notes to be
         redeemed and the aggregate principal amount of Notes to be outstanding
         after such partial redemption.

                  No representation is made as to the accuracy of the CUSIP
numbers listed in such notice or printed on the Notes.

                                      -34-
<PAGE>   42
                  The Issuers will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
purchase of Notes.

                  SECTION 3.05. Effect of Notice of Redemption.

                  Once notice of redemption is mailed in accordance with Section
3.04, such notice of redemption shall be irrevocable and Notes called for
redemption become due and payable on the Redemption Date and at the redemption
price plus accrued interest as of such date, if any. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
applicable redemption price plus accrued interest thereon to the Redemption
Date, but installments of interest, the maturity of which is on or prior to the
Redemption Date, shall be payable to Holders of record at the close of business
on the relevant record dates referred to in the Notes. Interest shall accrue on
or after the Redemption Date and shall be payable only if the Issuers default in
payment of the applicable redemption price.

                  SECTION 3.06. Deposit of Redemption Price.

                  Not later than 11:00 a.m. New York City time on the Redemption
Date and in accordance with Section 2.14, the Issuers shall deposit with the
Paying Agent U.S. Legal Tender sufficient to pay the applicable redemption price
plus accrued interest, if any, of all Notes to be redeemed on that date. The
Paying Agent shall promptly return to the Issuers any U.S. Legal Tender so
deposited which is not required for that purpose, except with respect to monies
owed as obligations to the Trustee pursuant to Article Six.

                  Unless the Issuers fail to comply with the preceding paragraph
and defaults in the payment of such redemption price plus accrued interest, if
any, interest on the Notes to be redeemed will cease to accrue on and after the
applicable Redemption Date, whether or not such Notes are presented for payment.

                  SECTION 3.07. Notes Redeemed in Part.

                  Upon surrender of a Note that is to be redeemed in part, the
Issuers shall execute and the Trustee shall authenticate for the Holder a new
Note or Notes equal in principal amount to the unredeemed portion of the Note
surrendered.

                                      -35-
<PAGE>   43
                                  ARTICLE FOUR

                                    COVENANTS

                  SECTION 4.01. Application of Proceeds.

                  The proceeds of the Notes and the BRL Term Loan shall be used
solely to finance BRL's acquisition of the items of Equipment in accordance with
the terms of the Participation Agreement and for costs related to such
transactions.

                  SECTION 4.02. Payment of Notes.

                  (a) The Issuers shall pay the principal of and interest on the
Notes on the dates and in the manner provided in the Notes and in this
Indenture.

                  (b) An installment of principal of or interest on the Notes
shall be considered paid on the date it is due if the Trustee or Paying Agent
(other than the Issuers or any of their Affiliates) holds, prior to 11:00 a.m.
New York City time on that date, U.S. Legal Tender designated for and sufficient
to pay the installment in full and is not prohibited from paying such money to
the Holders pursuant to the terms of this Indenture or the Notes.

                  (c) Notwithstanding anything to the contrary contained in this
Indenture, the Issuers may, to the extent required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.

                  SECTION 4.03. Maintenance of Office or Agency.

                  The Issuers shall maintain the office or agency required under
Section 2.03. The Issuers shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Issuers shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations
and surrenders as may be required pursuant to Section 2.03 may be made or served
at the address of the Trustee set forth in Section 10.02.

                  SECTION 4.04. Legal Existence.

                  The Issuers shall do or shall cause to be done all things
necessary to preserve and keep in full force and effect their legal existence in
accordance with their respective organizational documents and the rights
(charter and statutory) and material franchises of each Issuer; provided that no
Issuer shall be required to preserve any such right, license or franchise, if
the maintenance or preservation thereof is not otherwise required pursuant to
Section 4.07 and is no longer desirable, as determined in good faith by such
Issuer's Board of Directors, in the conduct of the business of such Issuer.

                                      -36-
<PAGE>   44
                  SECTION 4.05. Payment of Taxes and Other Claims.

                  The Issuers shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Issuers
or properties of the Issuers and (ii) all material lawful claims for labor,
materials and supplies that, if unpaid, might by law become a Lien upon the
property of the Issuers; provided, however, that the Issuers 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 being
contested in good faith by appropriate negotiations or proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent
required under GAAP, have been taken.

                  SECTION 4.06. Compliance Certificate; Notice of Default.

                  (a) Each Issuer shall deliver to the Trustee, within 105 days
after the end of its fiscal year, an Officer's Certificate (provided, however,
that one of the signatories to such Officer's Certificate shall be such Issuer's
principal executive officer, principal financial officer or principal accounting
officer), as to such Officers' knowledge of the Issuer's compliance with all
conditions and covenants under this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and in the event any Default
of such Issuer exists, such Officers shall specify the nature of such Default.
Each such Officer's Certificate shall also notify the Trustee should the Issuer
elect to change the manner in which it fixes its fiscal year end.

                  (b) If any Default or Event of Default has occurred and is
continuing, the Issuers shall deliver to the Trustee, at their address set forth
in Section 10.02, by registered or certified mail or by facsimile transmission
followed by hard copy by registered or certified mail an Officer's Certificate
of each Issuer specifying such event within 10 days of its becoming aware of
such occurrence.

                  SECTION 4.07. Compliance with Laws.

                  The Issuers shall comply in all material respects with all
applicable statutes, rules, regulations, orders and restrictions of the United
States of America, all states and municipalities thereof and of any governmental
department, commission, board, regulatory authority, bureau, agency and
instrumentality of the foregoing, in respect of the conduct of their respective
businesses and the ownership of their respective properties. The Issuers shall
promptly take, and maintain the effectiveness of, all action to effectuate the
Participation Agreement, this Indenture or the Equipment Lease Agreement, as
applicable, or otherwise that may, from time to time, be necessary or
appropriate under applicable law in connection with the performance by the
Issuers of their respective obligations under the Participation Agreement, this
Indenture or the Equipment Lease Agreement, as applicable, or the taking of any
action hereby or thereby contemplated, or necessary for the legality, validity,
binding effect or enforceability of the Participation Agreement, this Indenture
or the Equipment Lease Agreement, as applicable, or for the making of any

                                      -37-
<PAGE>   45
payment or the transfer or remittance of any funds by the Issuers under the
Participation Agreement, this Indenture or the Equipment Lease Agreement, as
applicable.

                  SECTION 4.08. Line of Business.

                  BRL shall not (i) enter into any business other than its
acquisition, leasing, financing and sale of the Equipment, (ii) create, incur,
assume or permit to exist any indebtedness, except as expressly permitted by the
Participation Agreement, (iii) enter into, or be a party to, any transaction
with any person, except the transactions set forth in the Participation
Agreement, the Indenture or the Equipment Lease Agreement, as applicable, and as
expressly permitted thereby, or (iv) make any investment in, guarantee the
obligations of, or make or advance money to any person (other than BRL Corp.),
through the direct or indirect lending of money, holding of securities or
otherwise except the transactions set forth in the Operative Documents and as
expressly permitted thereby. BRL Corp. will conduct no business other than
acting as a co-issuer of the Notes, maintaining its corporate existence and
taking such actions as are required to comply with its covenants and agreements
under the Indenture, the Purchase Agreement and the Registration Rights
Agreement.

                  SECTION 4.09. Liens.

                  The Issuers shall duly pay and discharge (i) immediately upon
the attachment thereof in the case of BRL, all liens other than Permitted Liens
on any Collateral, (ii) as and when due, all of their indebtedness and other
obligations before the time that any lien attaches unless and only to the extent
that any such amounts are not yet due and payable or the validity thereof is
being contested in good faith by appropriate proceedings so long as such
proceedings do not involve any material danger of the sale, forfeiture or loss
of the items of Equipment or any interest therein and the Issuers maintain or
cause UCI to maintain appropriate reserves with respect thereto or have made
adequate provision for the payment thereof, in accordance with GAAP and approved
by the Administrative Agent, and (iii) all taxes imposed upon or against them or
their property or assets, or upon any property leased by them, prior to the date
on which penalties attach thereto.

                  SECTION 4.10. Liquidation.

                  The Issuers shall not wind up, liquidate or dissolve their
affairs or enter into any transaction of merger or consolidation, or convey,
sell, lease (substantially as a whole), or otherwise dispose of (whether in one
or in a series of transactions) their assets except as expressly permitted by
the Operative Documents.

                  SECTION 4.11. Reports to Holders.

                  The Issuers will deliver to the Trustee within 15 days after
the filing of the same with the Commission, copies of the quarterly and annual
reports and of the information, documents and other reports, if any, which the
Issuers are required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act. Notwithstanding that the Issuers may not be

                                      -38-
<PAGE>   46
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Issuers will provide the Trustee and the Holders with such annual
reports and such information, documents and other reports specified in Sections
13 and 15(d) of the Exchange Act. The Issuers will also comply with the other
provisions of TIA Section 314(a).

                  SECTION 4.12. Waiver of Stay, Extension or Usury Laws.

                  The Issuers covenant (to the extent they may lawfully do so)
that they shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Issuers from paying
all or any portion of the principal of or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that they may lawfully do so) the Issuers hereby expressly waive all benefit or
advantage of any such law, and covenant that they shall not by resort to any
such law hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.

                  SECTION 4.13. Change of Control.

                  (a) Upon the occurrence of a Change of Control each Holder
will have the right to require that the Issuers purchase all or a portion of
such Holder's Notes pursuant to the offer described below (a "Change of Control
Offer") at a purchase price equal to 101% of the principal amount thereof plus
accrued and unpaid interest to the date of purchase.

                  (b) Within 30 days following the date upon which a Change of
Control occurs, the Issuers must send, by first class mail, a notice to each
Holder at such Holder's last registered address, with a copy to the Trustee,
which notice shall govern the terms of the Change of Control Offer. Such notice
shall state, among other things:

                  (i) that the Change of Control Offer is being made pursuant to
         this Section 4.13 and that all Notes tendered and not withdrawn shall
         be accepted for payment;

                 (ii) the purchase price (equal to 101% of the principal amount
         thereof plus accrued and unpaid interest, if any, thereon to the date
         of purchase) and the purchase date (which shall be no earlier than 30
         days nor later than 45 days from the date such notice is mailed, other
         than as may be required by law) (the "Change of Control Payment Date");

                 (iii) that any Note not tendered shall continue to accrue
         interest in accordance with the terms thereof;

                 (iv) that, unless the Issuers default in making payment
         therefor, any Note accepted for payment pursuant to the Change of
         Control Offer shall cease to accrue interest after the Change of
         Control Payment Date;

                                      -39-
<PAGE>   47
                 (v) that Holders electing to have a Note purchased pursuant to
         a Change of Control Offer shall be required to surrender the Note, with
         the form entitled "Option of Holder to Elect Purchase" on the reverse
         of the Note completed, to the Paying Agent at the address specified in
         the notice prior to the close of business on the third business day
         prior to the Change of Control Payment Date;

                 (vi) that Holders shall be entitled to withdraw their election
         if the Paying Agent receives, not later than the second business day
         prior to the Change of Control Payment Date, a facsimile transmission
         or letter setting forth the name of the Holder, the principal amount of
         the Notes the Holder delivered for purchase and a statement that such
         Holder is withdrawing his election to have such Notes purchased;

                 (vii) that Holders whose Notes are purchased only in part shall
         be issued new Notes in a principal amount equal to the unpurchased
         portion of the Notes surrendered; provided, however, that each Note
         purchased and each new Note issued shall be in an original principal
         amount of $1,000 or integral multiples thereof; and

                 (viii) the name and address of the Paying Agent.

                  Holders electing to have a Note purchased pursuant to a Change
of Control Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Change of Control Payment Date.

                  (c) On the Change of Control Payment Date, the Issuers shall,
to the extent permitted by law, (i) accept for payment all Notes or portions
thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent U.S. Legal Tender in an amount equal to the aggregate
Change of Control Payment in respect of all Notes or portions thereof so
tendered and (iii) deliver, or cause to be delivered, to the Trustee for
cancellation the Notes so accepted together with an Officer's Certificate
stating that such Notes or portions thereof have been tendered to and purchased
by the Issuers. The Paying Agent will promptly either (x) pay to the Holder
against presentation and surrender (or, in the case of partial payment,
endorsement) of the Global Notes or (y) in the case of Certificated Securities,
mail to each Holder of Notes the Change of Control Payment for such Notes, and
the Trustee will promptly authenticate and deliver to the Holder of the Global
Notes a new Global Note or Notes or, in the case of Definitive Notes, mail to
each Holder new Certificated Securities, as applicable, equal in principal
amount to any unpurchased portion of the Notes surrendered, if any, provided
that each new Certificated Security will be in a principal amount of $1,000 or
an integral multiple thereof. The Issuers will notify in writing the Trustee and
the Holders of the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.

                  (d) The Issuers shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer at the Change of Control Purchase Price, at the same times and
otherwise in compliance with the requirements applicable

                                      -40-
<PAGE>   48
to a Change of Control Offer made by the Issuers and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.

                  (e) None of the Board of Directors of each Issuer or the
Trustee may waive the provisions of this Section 4.13 relating to each Issuer's
obligation to make a Change of Control Offer or a Holder's right to redemption
upon a Change of Control.

                  (f) Each Issuer shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Notes pursuant to a Change of Control Offer. To the
extent that the provisions of any securities laws or regulations conflict with
the provisions of this Section 4.13, the Issuers shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the provisions of this Section 4.13 by virtue
thereof.

                  SECTION 4.14. Net Proceeds Offer Following Asset Sale.

                  The Issuers will comply with the following after the
occurrence of a Net Proceeds Offer Trigger Date:

                  The Issuers shall make an offer to purchase with respect to
such Net Proceeds Offer Trigger Date (the "Net Proceeds Offer") from all Holders
on a pro rata basis, that amount of Notes equal to the Net Proceeds Offer Amount
with respect to such Net Proceeds Offer Trigger Date that is allocable, under
the Participation Agreement, to the Notes (which allocation shall include the
application of such Net Cash Proceeds pro rata to the outstanding amount of
Notes, the BRL Term Loan and the Equity Contribution; provided that the maximum
amount of Notes to be so purchased multiplied by 1.219512195121951219512195122
shall not exceed such Net Cash Proceeds) at a price equal to 100% of the
principal amount of the Notes to be purchased, plus accrued and unpaid interest
thereon, if any, to the date of purchase.

                  Each Net Proceeds Offer will be mailed to the record Holders
as shown on the register of Holders not less than 30 days nor more than 45 days
following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and
shall comply with the procedures set forth in this Indenture. Upon receiving
notice of the Net Proceeds Offer, Holders may elect to tender their Notes in
whole or in part in integral multiples of $1,000 principal amount in exchange
for cash. To the extent Holders properly tender Notes in an amount exceeding the
Net Proceeds Offer Amount allocable to the Notes, Notes of tendering Holders
will be purchased on a pro rata basis (based on amounts tendered). A Net
Proceeds Offer shall remain open for a period of 20 business days or such longer
period as may be required by law, and the purchase of such Note shall be
consummated within 60 days following the mailing of the Net Proceeds Offer.

                  The notice, which shall govern the terms of the Net Proceeds
Offer, shall include such disclosures as are required by law and shall state:

                 (i) that the Net Proceeds Offer is being made pursuant to this
         Section 4.14;

                                      -41-
<PAGE>   49
                 (ii) the purchase price (equal to 100% of the principal amount
         thereof plus accrued and unpaid interest, if any) to be paid for Notes
         purchased pursuant to the Net Proceeds Offer and the purchase date
         (which shall be no earlier than 30 days nor later than 45 days from the
         date such notice is mailed, other than as required by law) (the "Net
         Proceeds Offer Payment Date");

                 (iii) that any Note not tendered for payment will continue to
         accrue interest in accordance with the terms thereof;

                 (iv) that, unless the Issuers default on making the payment
         therefor, any Note accepted for payment pursuant to the Net Proceeds
         Offer shall cease to accrue interest after the Net Proceeds Payment
         Date;

                  (v) that Holders accepting the Offer to have their Notes
         purchased pursuant to the Net Proceeds Offer will be required to
         surrender their Notes to the Paying Agent at the address specified in
         the notice prior to the close of business on the third Business Day
         prior to the Net Proceeds Offer Payment Date;

                 (vi) that Holders will be entitled to withdraw their acceptance
         if the Paying Agent receives, not later than the close of business on
         the second Business Day prior to the Net Proceeds Offer Payment Date, a
         facsimile transmission or letter setting forth the name of the Holder,
         the principal amount of the Notes the Holder delivered for purchase and
         a statement that such Holder is withdrawing his election to have such
         Notes purchased;

                (vii) that Holders whose Notes are purchased only in part will
         be issued new Notes in a principal amount equal to the unpurchased
         portion of the Notes surrendered; provided that each Note purchased and
         each such new Note issued shall be in an original principal amount in
         denominations of $1,000 and integral multiples thereof;

               (viii) the name and address of the Paying Agent.

                  Holders electing to have a Note purchased pursuant to a Net
Proceeds Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Net Proceeds Offer Payment Date.

                  On the Net Proceeds Payment Date, the Issuers shall (i) accept
for payment Notes or portions thereof tendered pursuant to the Net Proceeds
Offer in accordance with this Section 4.14, (ii) deposit with the Paying Agent
U.S. Legal Tender sufficient to pay in full the Notes to be purchased in
accordance with this Section 4.14 and (iii) deliver to the Trustee Notes so
accepted together with an Officer's Certificate of each Issuer stating the Notes
or portions thereof tendered to and accepted for payment by the Issuers.

                                      -42-
<PAGE>   50
                  For purposes of this Section 4.14, the Trustee shall act as
the Paying Agent. The Paying Agent shall promptly (but in any case no later than
10 calendar days after the Net Proceeds Payment Date) mail or deliver to the
Holders of Notes so accepted payment in an amount equal to the purchase price
for such Notes, and the Issuers shall execute and issue, and the Trustee shall
promptly authenticate and mail to such Holders, a new Note equal in principal
amount to any unpurchased portion of the Note surrendered; provided that each
such new Note shall be issued in an original principal amount in denominations
of $1,000 and integral multiples thereof. The Issuer will send to the Trustee
and the Holders of Notes on or as soon as practicable after the Net Proceeds
Payment Date a notice setting forth the results of the Net Proceeds Offer. Any
Notes not so accepted shall be promptly mailed or delivered by the Issuers to
the Holder thereof.

                  The Issuers will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with Section 4.14, the
Issuers shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 4.14 by
virtue thereof.

                                  ARTICLE FIVE

                                    REMEDIES

                  SECTION 5.01. Events of Default.

                  An "Event of Default" means any of the following events:

                  (a) the failure to pay interest on any Notes when the same
         becomes due and payable and the default continues for a period of 30
         days;

                  (b) the failure to pay the principal of any Notes, when such
         principal becomes due and payable, at maturity, upon redemption or
         otherwise (including the failure to make a payment to purchase Notes
         tendered pursuant to a Change of Control Offer or a Net Proceeds
         Offer);

                  (c) a default in the observance or performance of any other
         covenant or agreement of the Issuers contained in this Indenture which
         default continues for a period of 30 days after the Issuer receive
         written notice specifying the default (and demanding that such default
         be remedied and stating that such notice is a "Notice of Default") from
         the Trustee or the Holders of at least 25% of the outstanding principal
         amount of the Notes;

                  (d) the occurrence and continuation of a Lease Event of
         Default under the Equipment Lease Agreement (other than as a result of
         a breach of a covenant made solely

                                      -43-
<PAGE>   51
         for the benefit of BRL or the BRL Term Loan lenders or caused solely by
         a Change of Control);

                  (e) the acceleration of the final stated maturity or failure
         to pay at final maturity (giving effect to any applicable grace periods
         and any extensions thereof) any portion of the BRL Term Loan;

                  (f) Participation Agreement no longer creates a first priority
         lien on all of the Collateral for the benefit of the Collateral Agent
         (subject to Permitted Liens);

                  (g) a judgment is entered against BRL involving an aggregate
         liability of at least $15.0 million, which remains undischarged, unpaid
         or unstayed in such aggregate amount for a period of 60 consecutive
         days after such judgment becomes final and nonappealable; and

                  (h) either of the Issuers pursuant to or under or within the
         meaning of any Bankruptcy Law:

                           (i) commences a voluntary case or proceeding;

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

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

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

                           (v) shall generally not pay its debts when such debts
                  become due or shall admit in writing its inability to pay its
                  debts generally; or

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

                           (i) is for relief against either of the Issuers in an
                  involuntary case or proceeding,

                           (ii) appoints a Custodian of either of the Issuers
                  for all or substantially all of their properties taken as a
                  whole, or

                           (iii) orders the liquidation of either of the
                  Issuers,

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

                                      -44-
<PAGE>   52
                  SECTION 5.02. Acceleration.

                  If an Event of Default (other than an Event of Default
specified in Section 5.01(h) or (i) above with respect to the Issuers) shall
occur and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Notes may declare the principal of and accrued and unpaid
interest on all the Notes to be due and payable by notice in writing to the
Issuers (and the Trustee if given by the Holders) specifying the respective
Event of Default and that it is a "notice of acceleration" (the "Acceleration
Notice"), and the same shall become immediately due and payable. In the event of
an acceleration because an Event of Default set forth in clause (e) above has
occurred and is continuing, such acceleration shall be automatically rescinded
and annulled if the event of default triggering such Event of Default pursuant
to clause (e) above shall be remedied or cured by the Issuers or waived by the
holders of the relevant Indebtedness within 20 days after the date of the
Acceleration Notice with respect thereto. In the event of an acceleration
because an Event of Default set forth in clause (e) above has occurred and is
continuing due to an acceleration of the BRL Term Loan caused by a Change of
Control, then all unpaid principal of, premium, if any (including the Make-Whole
Premium, if applicable) and accrued and unpaid interest on the Notes shall
become immediately due and payable. If an Event of Default specified in Section
5.01(h) or (i) with respect to the Issuers occurs and is continuing, then all
unpaid principal of and accrued and unpaid interest on all of the outstanding
Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. Following an
acceleration of the Notes, UCI shall have the option, under the Equipment Lease
Agreement, to repurchase all Equipment subject to the Equipment Lease Agreement
at the acquisition cost thereof, plus any other amounts owing under the
Equipment Lease Agreement, and with the proceeds of such repurchase allocable to
the Notes, the Issuers shall repay the Notes in full.

                  At any time after a declaration of acceleration with respect
to the Notes as described in the preceding paragraph, the Holders of a majority
in principal amount of the Notes may rescind and cancel such declaration and its
consequences (i) if the rescission would not conflict with any judgment or
decree, (ii) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, (iii) to the extent the payment of such interest is lawful, if
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Issuers have paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and (v) in
the event of the cure or waiver of an Event of Default of the type described in
Section 5.01(h) or (i), the Trustee shall have received an Officer's Certificate
and an Opinion of Counsel of each Issuer that such Event of Default has been
cured or waived. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.

                  SECTION 5.03. Other Remedies.

                  (a) If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or

                                      -45-
<PAGE>   53
interest on the Notes or to enforce the performance of any provision of the
Notes, this Indenture or the Participation Agreement.

                  (b) All rights of action and claims under this Indenture or
the Notes may be enforced by the Trustee even if it does not possess any of the
Notes or does not produce any of them in the proceeding. A delay or omission by
the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.

                  SECTION 5.04. Waiver of Defaults.

                  Prior to the acceleration of the Notes, the Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may, on behalf of the Holders of all the Notes, waive any
existing or past Default or Event of Default and its consequences under this
Indenture, except a Default or Event of Default specified in Section 5.01(a) or
(b) or in respect of any provision hereof which cannot be modified or amended
without the consent of the Holder so affected pursuant to Section 8.02. When a
Default or Event of Default is so waived, it shall be deemed cured and shall
cease to exist. This Section 5.04 shall be in lieu of Section 316(a)(1)(B) of
the TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded
from this Indenture and the Notes, as permitted by the TIA.

                  SECTION 5.05. Control by Majority.

                  Holders of the Notes may not enforce this Indenture or the
Notes except as provided in this Article Five and under the TIA. The Holders of
a majority in principal amount of the then outstanding Notes 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; provided, however, that the Trustee may refuse to follow any direction
(a) that conflicts with any rule of law or this Indenture, (b) that the Trustee,
in its sole discretion, determines may be unduly prejudicial to the rights of
another Holder, or (c) that may expose the Trustee to personal liability for
which adequate indemnity provided to the Trustee against such liability is not
reasonably assured to it; provided, further, however, that the Trustee may take
any other action deemed proper by the Trustee that is not inconsistent with such
direction or this Indenture. This Section 5.05 shall be in lieu of Section
316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Notes, as permitted by the TIA.

                  SECTION 5.06. Limitation on Suits.

                  A Holder may not pursue any remedy with respect to this
Indenture or the Notes unless: (i) the Holder gives to the Trustee written
notice of a continuing Event of Default; (ii) the Holders of at least 25% in
aggregate principal amount of the outstanding Notes make a written request to
the Trustee to pursue a remedy; (iii) such Holder or Holders offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense; (iv) the Trustee does not comply with the
request within 60 days after receipt of the request and

                                      -46-
<PAGE>   54
the offer and, if requested, the provision of indemnity; and (v) during such
60-day period the Holders of a majority in principal amount of the outstanding
Notes do not give the Trustee a direction which, in the opinion of the Trustee,
is inconsistent with the request. A Holder may not use this Indenture to
prejudice the rights of another Holder or to obtain a preference or priority
over such other Holder.

                  SECTION 5.07. Right of Holders To Receive Payment.

                  Notwithstanding any other provision in this Indenture, the
right of any Holder of a Note to receive payment of principal of and interest on
such Note, on or after the respective due dates expressed or provided for in
such Note, or to bring suit for the enforcement of any such payment on or after
the respective due dates, is absolute and unconditional and shall not be
impaired or affected without the consent of the Holder.

                  SECTION 5.08. Collection Suit by Trustee.

                  If an Event of Default specified in clause (a) or (b) of
Section 5.01 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Issuers, or any other
obligor on the Notes for the whole amount of principal of and accrued interest
remaining unpaid, together with interest on overdue principal and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum provided for by the Notes and 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 any other amounts due the
Trustee pursuant to the provisions of Section 6.07.

                  SECTION 5.09. Trustee May File Proofs of Claim.

                  The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents, counsel, accountants and
experts) and the Holders allowed in any judicial proceedings relative to the
Issuers (or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same,
and any Custodian in any such judicial proceedings is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 6.07. Nothing herein contained 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 Notes 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.

                                      -47-
<PAGE>   55
                  SECTION 5.10. Priorities.

                  If the Trustee collects any money pursuant to this Article
Five it shall pay out such money in the following order:

                  First:  to the Trustee for amounts due under Section 6.07;

                  Second: to Holders for amounts due and unpaid on the Notes for
         principal and interest accrued on the Notes, ratably, without
         preference or priority of any kind, according to the amounts due and
         payable on the Notes for principal and interest, respectively;

                  Third:  the balance, if any, to the Issuers.

                  The Trustee, upon prior written notice to the Issuers, may fix
a record date and payment date for any payment to Holders pursuant to this
Section 5.10.

                  SECTION 5.11. 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 or
omitted by it as Trustee, a court may in its discretion require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 5.11 does not apply to any suit by the Trustee,
any suit by a Holder pursuant to Section 5.07, or a suit by a Holder or Holders
of more than 10% in aggregate principal amount of the outstanding Notes.

                  SECTION 5.12. Restoration of Rights and Remedies.

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

                                      -48-
<PAGE>   56
                                   ARTICLE SIX

                                     TRUSTEE

                  SECTION 6.01. Duties of Trustee.

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

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

                  (1) The Trustee need perform only those duties as are
         specifically set forth in this Indenture and no covenants or
         obligations shall be implied in this Indenture that are adverse to the
         Trustee.

                  (2) In the absence of bad faith on its part, the Trustee may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture and the Participation Agreement. However, in the case of
         any such certificates or opinions that by any provision hereof are
         specifically required to be furnished to the Trustee, the Trustee shall
         examine the certificates and opinions to determine whether or not they
         conform to the requirements of this Indenture and the Participation
         Agreement.

                  (c) Notwithstanding anything to the contrary herein contained,
the Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

                  (1) This paragraph does not limit the effect of paragraph (b)
         of this Section 6.01.

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

                  (3) The Trustee shall not be liable with respect to any action
         it takes or omits to take in good faith in accordance with a direction
         received by it pursuant to Section 5.02, 5.04 or 5.05.

                  (d) 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

                                      -49-
<PAGE>   57
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 in its
sole discretion against such risk, liability, loss, fees or expense which might
be incurred in compliance with such request or direction.

                  (e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
6.01 and Section 6.02.

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

                  SECTION 6.02. Rights of Trustee.

                  Subject to Section 6.01:

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

                  (b) Before the Trustee acts or refrains from acting, it may
         consult with counsel of its selection and may require an Officer's
         Certificate or an Opinion of Counsel, which shall conform to Sections
         10.04 and 10.05. The Trustee shall not be liable for any action it
         takes or omits to take in good faith in reliance on such Officer's
         Certificate or Opinion of Counsel. The Trustee may consult with counsel
         of its selection and the advice of such counsel or any Opinion of
         Counsel shall be full and complete authorization and protection from
         liability in respect to any action taken, suffered or omitted by it
         hereunder in good faith and in reliance thereon.

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

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

                  (e) The Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, notice, request, direction, consent,
         order, bond, debenture, or other paper or document, but the Trustee, in
         its discretion, may make such further inquiry or investigation into
         such facts or matters as it may see fit, and, if the Trustee shall
         determine to make such further inquiry or investigation, it shall be
         entitled, upon reasonable notice to the Issuers, to examine the books,
         records, and premises of the Issuers, personally or by agent or
         attorney and to consult with the officers and representatives of the
         Issuers, including the Issuers' accountants and attorneys.

                                      -50-
<PAGE>   58
                  (f) The Trustee shall be under no obligation to exercise any
         of its rights or powers vested in it by this Indenture at the request,
         order or direction of any of the Holders pursuant to the provisions of
         this Indenture, unless such Holders have offered to the Trustee
         indemnity satisfactory to the Trustee against the costs, expenses and
         liabilities which may be incurred by it in compliance with such
         request, order or direction.

                  (g) The Trustee shall not be required to give any bond or
         surety in respect of the performance of its powers and duties
         hereunder.

                  (h) Delivery of reports, information and documents to the
         Trustee under Section 4.11 is for informational purposes only and the
         Trustee's receipt of the foregoing shall not constitute constructive
         notice of any information contained therein or determinable from
         information contained therein, including the Issuers' compliance with
         any of their covenants hereunder (as to which the Trustee is entitled
         to rely exclusively on Officer's Certificates).

                  (i) The Trustee shall not be deemed to have notice of any
         Event of Default unless a Trust Officer of the Trustee has actual
         knowledge thereof or unless the Trustee shall have received written
         notice thereof at the Corporate Trust Office of the Trustee, and such
         notice references the Notes and this Indenture.

                  (j) The rights, privileges, protections, immunities and
         benefits given to the Trustee, including, without limitation, its right
         to be indemnified, are extended to, and shall be enforceable by, the
         Trustee in each of its capacities hereunder, and each agent, custodian
         and other Person employed to act hereunder.

                  (k) The Trustee may request that the Issuers deliver an
         Officer's Certificate setting forth the names of individuals and/or
         titles of officers authorized at such time to take specified actions
         pursuant to this Indenture, which Officer's Certificate may be signed
         by any person authorized to sign an Officer's Certificate, including
         any person specified as so authorized in any such certificate
         previously delivered and not superseded.

                  SECTION 6.03. Individual Rights of Trustee.

                  The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Issuers, UCH, UCI
or their respective Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee must
comply with Sections 6.10 and 6.11.

                  SECTION 6.04. Trustee's Disclaimer.

                  The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Notes, and it shall not be accountable for the
Issuers' use of the proceeds from the Notes, it shall not be responsible for the
use or application of any money received by any Paying

                                      -51-
<PAGE>   59
Agent other than the Trustee, and it shall not be responsible for any statement
of the Issuers in this Indenture or the Notes other than the Trustee's
certificate of authentication.

                  SECTION 6.05. Notice of Default.

                  If a Default or an Event of Default occurs and is continuing
and if it is known to a Trust Officer, the Trustee shall mail to each Holder
notice of the uncured Default or Event of Default within 90 days after obtaining
knowledge thereof. Except in the case of a Default or an Event of Default in
payment of principal of, or interest on, any Note, including an accelerated
payment, a Default in payment on the Change of Control Payment Date pursuant to
a Change of Control Offer or on the Net Proceeds Offer Payment Date pursuant to
a Net Proceeds Offer, the Trustee may withhold the notice if and so long as its
Board of Directors, the executive committee of its Board of Directors or a
committee of its directors and/or Trust Officers in good faith determines that
withholding the notice is in the interest of the Holders. The foregoing sentence
of this Section 6.05 shall be in lieu of the proviso to Section 315(b) of the
TIA and such proviso to Section 315(b) of the TIA is hereby expressly excluded
from this Indenture and the Notes, as permitted by the TIA.

                  SECTION 6.06. Reports by Trustee to Holders.

                  Within 60 days after May 15 of each year beginning with 2001,
the Trustee shall, to the extent that any of the events described in TIA Section
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Holder a brief report dated as of such date that complies with TIA Section
313(a). The Trustee also shall comply with TIA Sections 313(b), (c) and
(d).

                  A copy of each report at the time of its mailing to Holders
shall be mailed to the Issuers and filed with the Commission and each stock
exchange, if any, on which the Notes are listed.

                  The Issuers shall promptly notify the Trustee if the Notes
become listed on any stock exchange and of any delisting thereof and the Trustee
shall comply with TIA Section 313(d).

                  SECTION 6.07. Compensation and Indemnity.

                  The Issuers shall pay to the Trustee from time to time such
compensation for its services as has been agreed to in writing signed by the
Issuers and the Trustee. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Issuers shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it in connection with the performance of its duties under
this Indenture. Such expenses shall include the reasonable fees and expenses of
the Trustee's agents and counsel.

                  The Issuers shall indemnify each of the Trustee (or any
predecessor Trustee) and its agents, employees, stockholders, Affiliates and
directors and officers for, and hold them each harmless against, any and all
loss, liability, damage, claim or expense (including reasonable fees

                                      -52-
<PAGE>   60
and expenses of counsel), including taxes (other than taxes based on the income
of the Trustee) incurred by them except for such actions to the extent caused by
any negligence, bad faith or willful misconduct on the part of any of them,
arising out of or in connection with the acceptance or administration of this
trust including the reasonable costs and expenses of defending themselves
against any claim (whether asserted by the Issuers, a Holder or any other
Person) or liability in connection with the exercise or performance of any of
their rights, powers or duties hereunder. The Trustee shall notify the Issuers
promptly of any claim asserted against the Trustee for which it may seek
indemnity. Failure by the Trustee to so notify the Issuers shall not relieve the
Issuers of their obligations hereunder except to the extent such failure shall
have prejudiced the Issuers. The Issuers shall defend the claim and the Trustee
shall cooperate in the defense; provided, however, that any settlement of a
claim shall be approved in writing by the Trustee if such settlement would
result in an admission of liability by the Trustee or if such settlement would
not be accompanied by a full release of the Trustee for all liability arising
out of the events giving rise to such claim. The Trustee may at its option have
separate counsel of its own choosing and the Issuers shall pay the reasonable
fees and expenses of such counsel. The Issuers need not pay for any settlement
made without their consent, which consent shall not be unreasonably withheld.

                  To secure the Issuers' payment obligations in this Section
6.07, the Trustee shall have a lien prior to the Notes on all assets or money
held or collected by the Trustee, in its capacity as Trustee, except assets or
money held in trust to pay principal of or interest on particular Notes.

                  When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 5.01(h) or 5.01(i) occurs, such expenses
and the compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.

                  The provisions of this Section 6.07 shall survive the
resignation or removal of a Trustee and the termination of this Indenture.

                  SECTION 6.08. Replacement of Trustee.

                  The Trustee may resign at any time by so notifying the
Issuers. The Holders of a majority in principal amount of the outstanding Notes
may remove the Trustee and appoint a successor Trustee with the Issuers'
consent, by so notifying the Issuers and the Trustee in writing. The Issuers may
remove the Trustee if:

                  (1) the Trustee fails to comply with Section 6.10;

                  (2) the Trustee is adjudged bankrupt or insolvent;

                  (3) a receiver or other public officer takes charge of the
         Trustee or its property; or

                  (4) the Trustee becomes incapable of acting.

                                      -53-
<PAGE>   61
                  If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Issuers shall notify each Holder of
such event and shall promptly appoint a successor Trustee. Within one year after
the successor Trustee takes office, the Holders of a majority in aggregate
principal amount of the outstanding Notes may appoint a successor Trustee to
replace the successor Trustee appointed by the Issuers.

                  A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. As promptly as possible
after that, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided in Section 6.07,
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The Issuers shall mail notice of such successor
Trustee's appointment to each Holder.

                  If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuers or the Holders of at least 10% in aggregate principal amount of the
outstanding Notes may petition, at the expense of the Issuers, any court of
competent jurisdiction for the appointment of a successor Trustee.

                  If the Trustee fails to comply with Section 6.10, any Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

                  Notwithstanding any resignation or replacement of the Trustee
pursuant to this Section 6.08, the Issuers' obligations under Section 6.07 shall
continue for the benefit of the retiring Trustee.

                  SECTION 6.09. Successor Trustee by Merger, Etc.

                  If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided, however, that
such corporation shall be otherwise qualified and eligible under this Article
Six.

                  SECTION 6.10. Eligibility; Disqualification.

                  This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1), (2) and (5). The Trustee (or, in
the case of a Trustee that is a subsidiary of another Bank or a corporation
included in a bank holding company system, the related bank or bank holding
company) shall have a combined capital and surplus of at least $50,000,000
million as set forth in its most recent published annual report of condition,
and have a Corporate Trust Office in the City of New York. In addition, if the
Trustee is a subsidiary of another Bank or a corporation included in a bank
holding company system, the Trustee, independently of such bank or bank holding
company, shall meet the capital requirements of TIA Section 310(a)(2). The
Trustee shall comply with TIA Section 310(b); provided, however, that there
shall be excluded from the operation of

                                      -54-
<PAGE>   62
TIA Section 310(b)(1) any indenture or indentures under which other securities,
or certificates of interest or participation in other securities, of the Issuers
are outstanding, if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met. The provisions of TIA Section 310 shall apply to the Issuers,
as obligors of the Notes.

                  SECTION 6.11. Preferential Collection of Claims Against
Issuers.

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

                                  ARTICLE SEVEN

                       DISCHARGE OF INDENTURE; DEFEASANCE

                  SECTION 7.01. Termination of Issuers' Obligations.

                  This Indenture will be discharged and will cease to be of
further effect (except as to surviving rights or registration of transfer or
exchange of the Notes, as expressly provided for in this Indenture) as to all
outstanding Notes when (a) either (i) all Notes theretofore authenticated and
delivered (except lost, stolen or destroyed Notes which have been replaced or
paid and Notes for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Issuers and thereafter repaid to the
Issuers or discharged from such trust) have been delivered to the Trustee for
cancellation or (ii) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable or, by their terms, are to become due
and payable on their maturity date within one year, or are to be called for
redemption upon delivery of notice, within one year and the Issuers have
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the principal of, premium, if any, and
interest on the Notes to the date of maturity or redemption, as the case may be,
together with irrevocable instructions from the Issuers directing the Trustee to
apply such funds to the payment thereof or redemption, as the case may be; (b)
the Issuers have paid all other sums payable under this Indenture by the
Issuers; and (c) the Issuers have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel stating that all conditions precedent
under this Indenture relating to the satisfaction and discharge of this
Indenture have been complied with.

                  The Issuers may, at their option and at any time, elect to
have their obligations discharged with respect to the outstanding Notes ("Legal
Defeasance"). Upon any such Legal Defeasance this Indenture shall cease to be of
further effect and the Issuers shall have no further obligations hereunder or
under the Notes and the entire indebtedness represented by the outstanding Notes
shall be deemed to have been paid and discharged, except for (a) the rights of
Holders to receive payments in respect of the principal, premium, if any, and
interest on the Notes when such payments are due from the trust referred to
below, (b) the Issuers' obligations with respect to the Notes concerning issuing
temporary Notes, registration of Notes, mutilated,

                                      -55-
<PAGE>   63
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payments, (c) the rights, powers, trust, duties and immunities of the Trustee
and the Issuers' obligations in connection therewith and (d) the Legal
Defeasance provisions of this Section 7.01. In addition, the Issuers may, at
their option and at any time, elect to have the obligations of the Issuers
released with respect to covenants contained in Sections 4.04 (except with
respect to the corporate existence of the Issuers) through 4.14 of this
Indenture and the covenants of UCI in Section 9.2 of the Participation Agreement
for the benefit of the Trustee and the Holders ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the Notes. In the event of Covenant
Defeasance, those events described under Section 5.01 (except those events
described in Section 5.01(a), (b) (excluding the parenthetical clause therein),
(h) and (i)) will no longer constitute an Event of Default with respect to the
Notes.

                  In order to exercise either Legal Defeasance or Covenant
Defeasance:

                  (a) the Issuers must irrevocably deposit with the Trustee, in
         trust, for the benefit of the Holders cash in United States dollars,
         non-callable U.S. Government Obligations, or a combination thereof, in
         such amounts as will be sufficient, in the opinion of a nationally
         recognized firm of independent public accountants, to pay the principal
         of, premium, if any, and interest on the Notes on the stated date for
         payment thereof or on the applicable Redemption Date, as the case may
         be;

                  (b) in the case of Legal Defeasance, the Issuers shall have
         delivered to the Trustee an Opinion of Counsel in the United States
         reasonably acceptable to the Trustee confirming that (i) the Issuers
         have received from, or there has been published by, the Internal
         Revenue Service a ruling or since the date of this Indenture, there has
         been a change in the applicable federal income tax law, in either case
         to the effect that, and based thereon such opinion of counsel shall
         confirm that, the Holders will not recognize income, gain or loss for
         federal income tax purposes as a result of such Legal Defeasance, and
         (ii) the Holders will be subject to U.S. federal income tax on the same
         amounts, in the same manner and at the same times as would have been
         the case if such Legal Defeasance had not occurred;

                  (c) in the case of Covenant Defeasance, the Issuers shall have
         delivered to the Trustee an Opinion of Counsel in the United States
         reasonably acceptable to the Trustee confirming that the Holders will
         not recognize income, gain or loss for federal income tax purposes as a
         result of such Covenant Defeasance and will be subject to federal
         income tax on the same amounts, in the same manner and at the same
         times as would have been the case if such Covenant Defeasance had not
         occurred;

                  (d) no Default or Event of Default shall have occurred and be
         continuing on the date of such deposit (other than a Default or Event
         of Default arising in connection with the substantially contemporaneous
         borrowing of funds to fund the deposit referenced in clause (a) above)
         or insofar as Events of Default under Section 5.01(h) or (i) from

                                      -56-
<PAGE>   64
         bankruptcy or insolvency events are concerned, at any time in the
         period ending on the 91st day after the date of deposit;

                  (e) such Legal Defeasance or Covenant Defeasance shall not
         result in a breach or violation of, or constitute a default under this
         Indenture or any other material agreement or instrument to which either
         of the Issuers is a party or by which either of the Issuers is bound;

                  (f) the Issuers shall have delivered to the Trustee an
         Officer's Certificate of each Issuer stating that the deposit was not
         made by the Issuers with the intent of preferring the Holders over any
         other creditors of the Issuers or with the intent of defeating,
         hindering, delaying or defrauding any other creditors of the Issuers or
         others;

                  (g) the Issuers shall have delivered to the Trustee an
         Officer's Certificate and an Opinion of Counsel, each stating that all
         conditions precedent provided for or relating to the Legal Defeasance
         or the Covenant Defeasance, as the case may be, have been complied
         with; and

                  (h) the Issuers shall have delivered to the Trustee an Opinion
         of Counsel to the effect that after the 91st day following the deposit,
         the trust funds will not be subject to the effect of any applicable
         bankruptcy, insolvency, reorganization or similar laws affecting
         creditors' rights generally.

                  Notwithstanding the foregoing, the Opinion of Counsel required
by clause (b) above with respect to Legal Defeasance need not be delivered if
all the Notes not theretofore delivered to the Trustee for cancellation (i) have
become due and payable, (ii) will become due and payable on the maturity date
within one year, or (iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Issuers.

                  SECTION 7.02. Application of Trust Money.

                  The Trustee or Paying Agent shall hold in trust U.S. Legal
Tender or U.S. Government Obligations deposited with it pursuant to Section
7.01, and shall apply the deposited U.S. Legal Tender and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of the
principal of and interest on the Notes. The Trustee shall be under no obligation
to invest said U.S. Legal Tender or U.S. Government Obligations.

                  The Issuers shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the Legal Tender or U.S.
Government Obligations deposited pursuant to Section 7.01 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Notes.

                                      -57-
<PAGE>   65
                  SECTION 7.03. Repayment to the Issuers.

                  Subject to Sections 6.07 and 7.01, the Trustee and the Paying
Agent shall promptly pay to the Issuers upon request any excess U.S. Legal
Tender or U.S. Government Obligations held by them at any time and thereupon
shall be relieved from all liability with respect to such money. The Trustee and
the Paying Agent shall pay to the Issuers upon written request any money held by
them for the payment of principal or interest that remains unclaimed for one
year; provided, however, that the Issuers shall, if requested by the Trustee or
Paying Agent, give to the Trustee or Paying Agent, indemnification reasonably
satisfactory to it against any and all liability which may be incurred by it by
reason of such paying; provided, further, that the Trustee or such Paying Agent,
before being required to make any payment, shall at the expense of the Issuers
cause to be published once in a newspaper of general circulation in the City of
New York or mail to each Holder entitled to such money notice that such money
remains unclaimed and that after a date specified therein which shall be at
least 30 days from the date of such publication or mailing any unclaimed balance
of such money then remaining will be repaid to the Issuers. After payment to the
Issuers, Holders entitled to such money must look to the Issuers for payment as
general creditors unless an applicable law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.

                  SECTION 7.04. Reinstatement.

                  If the Trustee or Paying Agent is unable to apply any U.S.
Legal Tender or U.S. Government Obligations in accordance with Section 7.01 by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Issuers' obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 7.01 until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with Section 7.01; provided, however, that if the Issuers have made any payment
of interest on or principal of any Notes because of the reinstatement of their
obligations, the Issuers shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.

                  SECTION 7.05. Acknowledgment of Discharge by Trustee.

                  After (i) the conditions of Section 7.01 have been satisfied,
(ii) the Issuers have paid or caused to be paid all other sums payable hereunder
by the Issuers and (iii) the Issuers have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel of each Issuer, each stating that all
conditions precedent referred to in clause (i) above relating to the
satisfaction and discharge of this Indenture have been complied with, the
Trustee upon written request shall acknowledge in writing the discharge of the
Issuers' obligations under this Indenture except for those surviving obligations
specified in Section 7.01; provided the legal counsel delivering such Opinion of
Counsel may rely as to matters of fact on one or more Officer's Certificates of
the Issuers.

                                      -58-
<PAGE>   66
                                  ARTICLE EIGHT

                          MODIFICATION OF THE INDENTURE

                  SECTION 8.01. Without Consent of Holders.

                  Subject to the provisions of Section 8.02, the Issuers and the
Trustee may amend, waive or supplement this Indenture without notice to or
consent of any Holder: (a) to cure any ambiguity, defect or inconsistency,
provided that the same does not adversely affect the rights of any Holder in any
material respect; (b) to provide for uncertificated Notes in addition to
certificated Notes; (c) to comply with any requirements of the Commission in
order to effect or maintain the qualification of this Indenture under the TIA;
or (d) to make any change that would provide any additional benefit or rights to
the Holders or that does not adversely affect the rights of any Holder in any
material respect. In formulating its opinion on such matters, the Trustee will
be entitled to rely on such evidence as it deems appropriate, including, without
limitation, solely on an Opinion of Counsel.

                  Upon the request of each Issuer accompanied by a resolution of
its Board of Directors authorizing the execution of any such amendment, waiver
or supplement or any such amended or supplemental Indenture, and upon receipt by
the Trustee of the documents described in Section 8.06, the Trustee shall join
with the Issuers in the execution of any such amendment, waiver or supplement or
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations which
may be therein contained, but the Trustee may but shall not be obligated to
enter into any such amendment, waiver or supplement or amended or supplemental
Indenture which adversely affects its own rights, duties or immunities under
this Indenture, in which case the Trustee may in its sole discretion, but shall
not be obligated to, enter into such amended or supplemental Indenture.

                  SECTION 8.02. Modification of Indenture and Operative
                                Documents.

                  (a)      The Issuers and the Trustee may amend, waive or
supplement this Indenture or the Notes or any amended or supplemental Indenture
with the written consent of the Holders of Notes of not less than a majority in
aggregate principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for the Notes) (the
"Majority Holders").

                  (b)      Upon the request of each Issuer accompanied by a
resolution of its Board of Directors authorizing the execution of any such
amendment, waiver or supplement or any such amended or supplemental Indenture,
and upon the filing with the Trustee of evidence satisfactory to the Trustee of
the consent of the Holders of Notes as aforesaid, and upon receipt by the
Trustee of the documents described in Section 8.06, the Trustee shall join with
the Issuers in the execution of any such amendment, waiver or supplement or such
amended or supplemental Indenture unless such amended or supplemental Indenture
adversely affects the Trustee's own rights,

                                      -59-
<PAGE>   67
duties or immunities under this Indenture, in which case the Trustee may in its
sole discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.

                  (c)      It shall not be necessary for the consent of the
Holders of Notes under this Section 8.02 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.

                  (d)      After an amendment, supplement or waiver under this
Section 8.02 becomes effective, the Issuers shall mail to the Holders of Notes
affected thereby a notice describing the amendment, supplement or waiver. Any
failure of the Issuers to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 5.04 and 5.07, the Holders
of a majority in aggregate principal amount of the Notes then outstanding may
waive compliance in a particular instance by either of the Issuers with any
provision of this Indenture or the Notes. However, without the consent of each
Holder of the Notes affected thereby, an amendment or waiver may not, directly
or indirectly: (i) reduce the principal amount of Notes whose Holders must
consent to an amendment; (ii) reduce the rate of or change or have the effect of
changing the time for payment of interest, including defaulted interest, on any
Notes; (iii) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may be
subject to redemption or repurchase, or reduce the redemption or repurchase
price therefor; (iv) make any Notes payable in money other than that stated in
the Notes; (v) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on such
Holder's Note or Notes on or after the due date thereof or to bring suit to
enforce such payment, or permitting Holders of a majority in principal amount of
Notes to waive Defaults or Events of Default; or (vi) amend, change or modify in
any material respect the obligation of the Issuers (or any of the provisions or
definitions with respect thereto) to (A) make payments under this Indenture, (B)
make and consummate a Change of Control Offer in the event of a Change of
Control or (C) make and consummate a Net Proceeds Offer.

                  (e)      Except as otherwise expressly provided in the
Operative Documents, no Operative Document nor any terms thereof may be amended,
supplemented, waived or modified without the written agreement and consent of
all parties thereto and UCI, provided that where the consent of the Trustee, BRL
Term Loan Lenders or Equity Participants is required, such consent (except as
provided below) may be given by (x) the Trustee acting on behalf of the Majority
Holders, (y) the Administrative Agent on behalf of a majority of the BRL Term
Loan Lenders or (z) Majority Equity Participants, as the case may be, and any
such consent shall be binding, in the case of clause (x), on the Trustee and all
Holders, in the case of clause (y), on all BRL Term Loan Lenders and, in the
case of clause (z), on all Equity Participants, provided further, that no such
amendment, modification, waiver or supplement shall, without the consent of the
Holder affected thereby, (A) extend the final scheduled maturity of any Note, or
reduce the rate or extend the time of payment of interest thereon (except (x) in
connection with the waiver of applicability of any post-default increase in
interest rates and (y) that any amendment or modification that is agreed to by
the Trustee acting on behalf of Majority Holders directly affected thereby to
the fi-

                                      -60-
<PAGE>   68
nancial definitions in the Operative Documents shall not constitute a reduction
in the rate of interest or fees for purposes of this clause (A), notwithstanding
the fact that such amendment or modification would otherwise actually result in
such a reduction, so long as the primary purpose (as determined in good faith by
UCI and Administrative Agent) of the respective amendment or modification was
not to decrease the pricing pursuant to the Participation Agreement and the
other Operative Documents), or reduce the principal amount thereof (except to
the extent repaid in cash), (B) release all or substantially all of Collateral
Agent's interest in the Collateral (except as expressly provided in the
Participation Agreement), (C) reduce the percentage specified in the definition
of Majority Holders or (D) amend Section 12.2 (other than clause (ii) and (iii)
of such Section) of the Participation Agreement.

                  (f)      Notwithstanding anything to the contrary in Section
12.2(a) of the Participation Agreement, (i) subject to clause (i) of the second
proviso of Section 12.2(a) of the Participation Agreement, UCI and the Trustee
acting on behalf of the Majority Holders may amend, supplement, modify or waive
any of UCI's covenants set forth in Section 9.2 of the Participation Agreement
and with the written consent of BRL amend, supplement, modify or waive any of
the terms of this Indenture or the Notes in accordance with the terms hereof and
thereof, (ii) subject to clause (ii) of Section 12.2(a) of the Participation
Agreement, UCI, BRL and the Administrative Agent acting on behalf of Majority
BRL Term Loan Lenders may amend, supplement, modify or waive any of UCI's
covenants set forth in Section 9.3 of the Participation Agreement, any of the
terms of the BRL Term Loan Agreement and BRL Term Loan Notes and (iv) UCI, with
the consent of Majority BRL Term Loan Lenders, BRL and Majority Equity
Participants, may amend, supplement, modify or waive any of the terms of
Sections 6, 10(b), 11 (except where any such amendment, supplement, waiver or
modification of maintenance obligations would impair the value of the Equipment
in any material respect), 17, 28.3, 29.3 and 29.4 of the Equipment Lease
Agreement.

                  (g)      The Administrative Agent and Collateral Agent may
resign at any time by giving at least fifteen (15) days written notice thereof
to the Trustee, each BRL Term Loan Lender, BRL and UCI, and each of the
Administrative Agent and Collateral Agent may be removed at any time with or
without cause by the Trustee acting at the written direction of the Majority
Holders together with Majority BRL Term Loan Lenders. Upon any resignation or
removal of the Administrative Agent or Collateral Agent, Majority BRL Term Loan
Lenders shall have the right, provided no Lease Event of Default shall have
occurred and be continuing, with the consent of UCI (such consent not to be
unreasonably withheld or delayed) to appoint a successor Administrative Agent,
who shall be reasonably acceptable to UCI (it being understood and agreed that
any non-defaulting BRL Term Loan Lender is deemed to be acceptable to UCI) and
not objected to by the Trustee on behalf of the Majority Holders.

                  (h)      In connection with the issuance of additional Notes,
however, the Trustee, without the consent of the Holders, may consent to the
amendment of the Operative Documents to reflect the increase in the Notes and a
corresponding increase in the BRL Term Loan and Equity Contribution as well as
the increase in the Equipment acquired by BRL, leased to UCI under the Equipment
Lease Agreement and added to the Collateral.

                                      -61-
<PAGE>   69
                  SECTION 8.03. Compliance with TIA.

                  Every amendment, waiver or supplement of this Indenture or the
Notes shall comply with the TIA as then in effect; provided, however, that this
Section 8.03 shall not of itself require that this Indenture or the Trustee be
qualified under the TIA or constitute any admission or acknowledgment by any
party hereto that any such qualification is required prior to the time this
Indenture and the Trustee are required by the TIA to be so qualified.

                  SECTION 8.04. Revocation and Effect of Consents.

                  Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Issuers received before the date on which the
Trustee receives an Officer's Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver. An amendment, supplement
or waiver becomes effective upon receipt by the Trustee of such Officer's
Certificate and evidence of consent by the Holders of the requisite percentage
in principal amount of outstanding Notes.

                  The Issuers may, but shall not be obligated to, fix a Record
Date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a Record Date is fixed, then notwithstanding
the second sentence of the immediately preceding paragraph, those Persons who
were Holders at such Record Date (or their duly designated proxies), and only
those Persons, shall be entitled to revoke any consent previously given, whether
or not such Persons continue to be Holders after such Record Date. No such
consent shall be valid or effective for more than 90 days after such Record Date
unless consents from Holders of the requisite percentage in principal amount of
outstanding Notes required hereunder for the effectiveness of such consents
shall have also been given and not revoked within such 90 day period.

                  SECTION 8.05. Notation on or Exchange of Notes.

                  If an amendment, supplement or waiver changes the terms of a
Note, the Trustee may require the Holder of such Note to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Note about the
changed terms and return it to the Holder. Alternatively, if the Issuers or the
Trustee so determine, the Issuers in exchange for the Note shall issue and the
Trustee shall authenticate a new Note that reflects the changed terms.

                  SECTION 8.06. Trustee To Sign Amendments, Etc.

                  The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Eight; provided, however, that the Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver which affects the Trustee's own rights, du-

                                      -62-
<PAGE>   70
ties or immunities under this Indenture. In executing such amendment, supplement
or waiver the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it, and shall be fully protected in relying upon an Opinion of
Counsel and an Officer's Certificate of each Issuer, stating that no Event of
Default shall occur as a result of such amendment, supplement or waiver and that
the execution of such amendment, supplement or waiver is authorized or permitted
by this Indenture; provided, however, that the legal counsel delivering such
Opinion of Counsel may rely as to matters of fact on one or more Officer's
Certificates of the Issuers. Such Opinion of Counsel shall not be an expense of
the Trustee.

                                  ARTICLE NINE

                   SECURITY UNDER THE PARTICIPATION AGREEMENT

                  SECTION 9.01. Participation Agreement.

                  The due and punctual payment of the principal of and interest
and Additional Interest, if any, on the Notes when and as the same shall be due
and payable, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest and Additional Interest (to the extent permitted by law), if any,
on the Notes and performance of all other obligations of the Issuers to the
Holders or the Trustee under this Indenture and the Notes, according to the
terms hereunder or thereunder, shall be secured as provided in Section 7 of the
Participation Agreement. Each Holder, by its acceptance of the Notes, consents
and agrees to the terms of the Participation Agreement (including, without
limitation, the provisions providing for foreclosure and release of Collateral)
as the same may be in effect or may be amended from time to time in accordance
with its terms and authorizes and directs the Collateral Agent to enter into the
Participation Agreement and to perform its obligations and exercise its rights
thereunder in accordance therewith. The Issuers shall deliver to the Trustee
copies of all documents delivered to the Collateral Agent pursuant to the
Participation Agreement, and shall do or cause to be done all such acts and
things as may be necessary or proper, or as may be required by the provisions of
the Participation Agreement, to assure and confirm to the Trustee and the
Collateral Agent the security interest in the Collateral contemplated hereby, by
the Participation Agreement or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Notes secured thereby, according to the intent and
purposes herein and therein expressed. The Issuers shall take, upon request of
the Trustee, any and all actions reasonably required to cause the Participation
Agreement to create and maintain, as security for the obligations of the Issuers
hereunder, a valid and enforceable perfected first lien on and security interest
in all the Collateral, in favor of the Collateral Agent for the benefit of the
Holders, superior to and prior to the rights of all third Persons (other than
the pari passu security interest of the BRL Term Loan Lenders), except for
Excepted Payments.

                                      -63-
<PAGE>   71
                  SECTION 9.02. Recording and Opinions.

                  (a)      The Issuers shall furnish to the Trustee
simultaneously with the execution and delivery of this Indenture an Opinion of
Counsel either (i) stating that in the opinion of such counsel all action has
been taken with respect to the recording, registering and filing of this
Indenture, financing statements or other instruments necessary to make effective
the lien and security interest intended to be created by the Participation
Agreement, and reciting with respect to the security interests in the
Collateral, the details of such action, or (ii) stating that, in the opinion of
such counsel, no such action is necessary to make such lien and security
interest effective.

                  (b)      The Issuers shall furnish to the Collateral Agents
and the Trustee on May 15 in each year beginning with 2001, an Opinion of
Counsel, dated as of such date, either (i) (A) stating that, in the opinion of
such counsel, action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and refiling of all supplemental
indentures, financing statements, continuation statements or other instruments
of further assurance as necessary to maintain the lien and security interest of
the Participation Agreement and reciting with respect to the security interests
in the Collateral the details of such action referring to prior Opinions of
Counsel in which such details are given, and (B) stating that, based on relevant
laws as in effect on the date of such Opinion of Counsel, all financing
statements and continuation statements have been executed and filed that are
necessary as of such date and during the succeeding 12 months fully to preserve
and protect, to the extent such protection and preservation are possible by
filing, the rights of the Holders of Notes and the Collateral Agent and the
Trustee hereunder and under the Participation Agreement with respect to the
security interests in the Collateral, or (ii) stating that, in the opinion of
such counsel, no such action is necessary to maintain such lien and security
interest and assignment.

                  (c)      The Issuers shall otherwise comply with the
provisions of TIA Section 314(b).

                  SECTION 9.03. Release of Collateral

                  (a)      Collateral may be released or substituted only in
accordance with the terms of the Participation Agreement.

                  (b)      The release of any Collateral from the terms of this
Indenture and the Participation Agreement shall not be deemed to impair the
security under this Indenture in contravention of the provisions hereof if and
to the extent the Collateral is released pursuant to the terms of the
Participation Agreement. To the extent applicable, the Issuers shall cause TIA
Section 313(b), relating to reports, and TIA Section 314(d), relating to the
release of property or securities from the lien and security interest of the
Participation Agreement and relating to the substitution therefor of any
property or securities to be subjected to the lien and security interest of the
Participation Agreement, to be complied with. Any certificate or opinion
required by TIA Section 314(d) may be made by an Officer of each Issuer except
in cases where TIA Section 314(d) requires that such certificate or opinion be
made by an independent Person, which Person shall be an independent engineer,
appraiser or other expert selected or approved by the Collateral Agent in the
exercise of reasonable care.

                                      -64-
<PAGE>   72
                  (c)      Subject to the terms and conditions of the
Participation Agreement, the Collateral Agent may, in accordance with the
written instructions of the Administrative Agent and, if any such transaction or
related series of transactions relates to Equipment with value in excess of
$30,000,000, the Trustee, sell, assign, transfer and deliver the whole, or from
time to time to the extent permitted by law, any part of the Collateral or any
interest therein, at any private sale or public auction with or without demand,
advertisement or notice (except as herein required or as may be required by law)
of the date, time and place of sale and any adjustment thereof for cash or
credit or other property for immediate or future delivery and for such price or
prices and on such terms as the Administrative Agent may determine, or as may be
required by law.

                  SECTION 9.04. Certificates of the Issuers.

                  The Issuers shall furnish to the Trustee and the Collateral
Agent, prior to each proposed release of Collateral pursuant to the
Participation Agreement, (i) all documents required by TIA Section 314(d) and
(ii) an Opinion of Counsel to the effect that such accompanying documents
constitute all documents required by TIA Section 314(d). The Trustee may, to the
extent permitted by Sections 6.01 and 6.02 hereof, accept as conclusive evidence
of compliance with the foregoing provisions the appropriate statements contained
in such documents and such Opinion of Counsel.

                  SECTION 9.05. Certificates of the Trustee.

                  In the event that the Issuers wish to release Collateral in
accordance with the Participation Agreement and have delivered the certificates
and documents required by the Participation Agreement (including those intended
for the benefit of the BRL Term Loan Lenders) and Sections 9.03 and 9.04 hereof,
the Trustee shall determine whether it has received all documentation required
by TIA Section 314(d) in connection with such release and, based on the Opinion
of Counsel delivered pursuant to Section 10.04(2), shall deliver a certificate
to the Collateral Agent setting forth such determination.

                  SECTION 9.06. Authorization of Actions To Be Taken by the
                                Trustee Under the Participation Agreement.

                  Subject to the provisions of Sections 6.01 and 6.02 hereof,
the Trustee may, in its sole discretion and without the consent of the Holders
of Notes, direct, on behalf of the Holders of Notes, the Collateral Agent to
take all actions it deems necessary or appropriate in order to (a) enforce any
of the terms of the Participation Agreement and (b) collect and receive any and
all amounts payable in respect of the obligations of the Issuers hereunder. The
Trustee shall have power to institute and maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Collateral by any acts
that may be unlawful or in violation of the Participation Agreement or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment,

                                      -65-
<PAGE>   73
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders or to the Trustee).

                  SECTION 9.07. Authorization of Receipt of Funds by the Trustee
                                Under the Participation Agreement.

                  The Trustee is authorized to receive any funds for the benefit
of the Holders distributed under the Participation Agreement, and to make
further distributions of such funds to the Holders of Notes according to the
provisions of this Indenture and the Participation Agreement.

                  SECTION 9.08. Termination of Security Interest.

                  Upon the payment in full of all obligations of the Issuers
under this Indenture and the Notes, or upon Legal Defeasance, the Trustee shall,
at the request of the Issuers, deliver a certificate to the Collateral Agent
stating that such obligations have been paid in full.

                                   ARTICLE TEN

                                  MISCELLANEOUS

                  SECTION 10.01. TIA Controls.

                  If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control; provided, however,
that this Section 10.01 shall not of itself require that this Indenture or the
Trustee be qualified under the TIA or constitute any admission or acknowledgment
by any party hereto that any such qualification is required prior to the time
this Indenture and the Trustee are required by the TIA to be so qualified.

                  SECTION 10.02. Notices.

                  Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:

                                      -66-
<PAGE>   74
                  if to the Issuers:

                  BRL Universal Equipment 2001 A, L.P.
                  BRL Universal Equipment Corp.
                  2911 Turtle Creek Boulevard
                  Suite 1240
                  Dallas, TX  75219
                  Telephone:  (214) 522-7296

                  Attention:  Gregory Greene

                  if to the Trustee:

                  The Bank of New York
                  101 Barclay Street, Floor 21 West
                  New York, New York  10286
                  Telephone:  (212) 815-3703

                  Attention:  Corporate Trust Trustee Administration

                  The Issuers and the Trustee by written notice to the other may
designate additional or different addresses for notices to such Person. Any
notice or communication to the Issuers or the Trustee shall be deemed to have
been given or made as of the date so delivered if hand delivered; when receipt
is acknowledged, if faxed; and five (5) calendar days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change of
address shall not be deemed to have been given until actually received by the
addressee).

                  Any notice or communication mailed to a Holder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar ten (10) days prior to such
mailing and shall be sufficiently given to him if so mailed within the time
prescribed.

                  Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.

                  SECTION 10.03. Communications by Holders with Other Holders.

                  Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Issuers, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).

                                      -67-
<PAGE>   75
                  SECTION 10.04. Certificate and Opinion as to Conditions
                                 Precedent.

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

                  (1) an Officer's Certificate of each Issuer, in form and
         substance reasonably satisfactory to the Trustee, stating that, in the
         opinion of the signers, all conditions precedent to be performed by
         such Issuer, if any, provided for in this Indenture relating to the
         proposed action have been complied with; and

                  (2) an Opinion of Counsel of each Issuer stating that, in the
         opinion of such counsel, all such conditions precedent to be performed
         by such Issuer, if any, provided for in this Indenture relating to the
         proposed action have been complied with (which counsel, as to factual
         matters, may rely on an Officer's Certificate).

                  SECTION 10.05. Statements Required in Certificate or Opinion.

                  Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officer's
Certificate required by Section 4.06, shall include:

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

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

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

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

                  SECTION 10.06. Rules by Trustee, Paying Agent, Registrar.

                  The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.

                  SECTION 10.07. Legal Holidays.

                  A "Legal Holiday" used with respect to a particular place of
payment is a Saturday, a Sunday or a day on which banking institutions in New
York, New York or at such place of payment are not required to be open. If a
payment date is a Legal Holiday at such place, payment

                                      -68-
<PAGE>   76
may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.

                  SECTION 10.08. Governing Law.

                  This Indenture and the Notes shall be governed by and
construed in accordance with the laws of the State of New York but without
giving effect to applicable principles of conflicts of law.

                  SECTION 10.09. No Adverse Interpretation of Other Agreements.

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

                  SECTION 10.10. No Personal Liability.

                  No past, present or future incorporator, director, officer,
employee or stockholder, as such, of either of the Issuers, as such, shall have
any liability for any obligations of either of the Issuers under the Notes, this
Indenture or the Registration Rights Agreement or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes.

                  SECTION 10.11. Successors.

                  All agreements of the Issuers in this Indenture and the Notes
shall bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successors.

                  SECTION 10.12. Duplicate Originals.

                  All parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together shall represent
the same agreement.

                  SECTION 10.13. Severability.

                  In case any one or more of the provisions in this Indenture or
in the Notes shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.

                  SECTION 10.14. Independence of Covenants.

                  All covenants and agreements in this Indenture and the Notes
shall be given independent effect so that if any particular action or condition
is not permitted by any of such cove-

                                      -69-
<PAGE>   77
nants, the fact that it would be permitted by an exception to, or otherwise be
within the limitations of, another covenant shall not avoid the occurrence of a
Default or an Event of Default if such action is taken or condition exists.

                                      -70-
<PAGE>   78
                                   SIGNATURES

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

                                  BRL UNIVERSAL EQUIPMENT 2001 A, L.P.

                                  By:  BRL Universal Equipment Management, Inc.,
                                  its general partner

                                  By:  /s/ GREGORY C. GREENE
                                       -----------------------------------------
                                       Name: Gregory C. Greene
                                       Title: President

                                  BRL UNIVERSAL EQUIPMENT CORP.

                                  By:  /s/ GREGORY C. GREENE
                                       -----------------------------------------
                                       Name: Gregory C. Greene
                                       Title: President

                                  THE BANK OF NEW YORK, as Trustee

                                  By:  /s/ REMO J. REALE
                                       -----------------------------------------
                                       Name: Remo J. Reale
                                       Title: Vice President

                                      -71-
<PAGE>   79
                                                                       EXHIBIT A

                                                              CUSIP No.: [     ]

                      BRL UNIVERSAL EQUIPMENT 2001 A, L.P.
                          BRL UNIVERSAL EQUIPMENT CORP.

                       8-7/8% SENIOR SECURED NOTE DUE 2008

No.

                  BRL UNIVERSAL EQUIPMENT 2001 A, L.P., a Delaware limited
partnership, and BRL UNIVERSAL EQUIPMENT CORP., a Delaware corporation
(together, the "Issuers," which term includes any ------- successor entities),
for value received promise to pay to Cede & Co. or registered assigns the
principal sum of Dollars ($ ) on February 15, 2008.

                  Interest Payment Dates: August 15 and February 15, commencing
August 15, 2001

                  Record Dates: August 1 and February l

                  Reference is made to the further provisions of this Note
contained herein, which will for all purposes have the same effect as if set
forth at this place.

                                      A-1
<PAGE>   80
                  IN WITNESS WHEREOF, the Issuers have caused this Note to be
signed manually or by facsimile by its duly authorized officers.

                                  BRL UNIVERSAL EQUIPMENT 2001 A, L.P.

                                  By:  BRL Universal Equipment Management, Inc.,
                                  its general partner

                                  By:  _________________________________________
                                       Name:   George C. Greene
                                       Title:  President

                                  BRL UNIVERSAL EQUIPMENT CORP.

                                  By:  _________________________________________
                                       Name:   George C. Greene
                                       Title:  President

                                      A-2
<PAGE>   81
Certificate of Authentication

                  This is one of the 8-7/8% Senior Secured Notes due 2008
referred to in the within-mentioned Indenture.

                                      THE BANK OF NEW YORK, as Trustee

                                      By:  _____________________________________
                                                   Authorized Signatory

Date of Authentication:               , 2001

                                      A-3
<PAGE>   82
                              (REVERSE OF SECURITY)

                       8-7/8% Senior Secured Note due 2008

                  1.       Interest. BRL UNIVERSAL EQUIPMENT 2001 A, L.P., a
Delaware limited partnership, and BRL UNIVERSAL EQUIPMENT CORP., a Delaware
corporation (together, the "Issuers"), promise to pay interest on the principal
amount of this Note at the rate per annum shown above. Interest on the Notes
will accrue from the Issue Date at a rate of 8-7/8% per annum and will be
payable semi-annually in cash on August 15 and February 15, commencing August
15, 2001. Interest will be computed on the basis of a 360-day year of twelve
30-day months and, in the case of a partial month, the actual number of days
elapsed.

                  2.       Method of Payment. The Issuers shall pay interest on
the Notes (except defaulted interest) to the Persons who are the registered
Holders at the close of business on the Record Date immediately preceding the
Interest Payment Date even if the Notes are canceled on registration of transfer
or registration of exchange (including pursuant to an Exchange Offer (as defined
in the Registration Rights Agreement)) after such Record Date. Holders must
surrender Notes to a Paying Agent to collect principal payments. The Issuers
shall pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts ("U.S. Legal
Tender"). The Issuers may deliver any such interest payment to the Paying Agent
or to a Holder at the Holder's registered address.

                  3.       Paying Agent and Registrar. Initially, The Bank of
New York (the "Trustee") will act as Paying Agent and Registrar. The Issuers may
change any Paying Agent, Registrar or co-Registrar without notice to the
Holders.

                  4.       Indenture. The Issuers issued the Notes under an
Indenture, dated as of February 9, 2001 (the "Indenture"), between the Issuers
and the Trustee. This Note is one of a duly authorized issue of Initial Notes of
the Issuers designated as their 8-7/8% Senior Secured Notes due 2008 (the
"Initial Notes"). The Notes include the Initial Notes and the Exchange Notes (as
defined in the Indenture) issued in exchange for the Initial Notes pursuant to
the Registration Rights Agreement. The Initial Notes and the Exchange Notes are
treated as a single class of securities under the Indenture. Capitalized terms
herein are used as defined in the Indenture unless otherwise defined herein. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of them. The Notes are general secured obligations
of the Issuers.

                                      A-4
<PAGE>   83
                  Each Holder, by accepting a Note, agrees to be bound by all of
the terms and provisions of the Indenture, as the same may be amended from time
to time in accordance with its terms.

                  5.       Optional Redemption. The Notes will be redeemable by
the Issuers, in whole at any time or in part from time to time, on and after
February 15, 2005, upon not less than 30 nor more than 60 days' notice, in the
event of a permitted purchase (pursuant to Section 28.4.1 of the Equipment Lease
Agreement) of Equipment from BRL by UCI with the proceeds of such purchase
allocable to the Notes, at the following redemption prices (expressed as
percentages of the principal amount thereof) if redeemed during the twelve-month
period commencing on February 15 of the year set forth below, plus, in each
case, accrued and unpaid interest thereon, if any, to the date of redemption

<TABLE>
<CAPTION>
                  Year                                  Percentage
                  ----                                  ----------
                  <S>                                   <C>
                  2005 ...............................   104.438%
                  2006 ...............................   102.219%
                  2007 ...............................   100.000%
</TABLE>

                  6.       Optional Redemption Upon Equity Offerings. At any
time, or from time to time, on or prior to February 15, 2004, UCI may, at its
option, apply the net cash proceeds of one or more Equity Offerings to purchase
Equipment from BRL pursuant to Section 28.4.1 of the Equipment Lease Agreement.
The Issuers will use such proceeds allocable to the Notes to redeem up to 35% of
the Notes at a redemption price equal to 108.875% of the principal amount of the
Notes to be redeemed on the date of redemption, plus accrued and unpaid
interest, if any; provided that at least 65% of the aggregate principal amount
of Notes originally issued remains outstanding immediately after any such
redemption. The permitted purchase and such redemption must be completed not
more than 120 days after the consummation of such Equity Offering.

                  As used in the preceding paragraph, "Equity Offering" means an
underwritten public offering or private placement of Qualified Capital Stock of
UCI or UCH, subsequent to the Issue Date (which proceeds at least to the extent
of the purchase of Equipment from BRL to fund the repurchase of Notes, BRL Term
Loan and Equity Contribution, if received by UCH, will be contributed as common
equity to UCI).

                  7.       Optional Redemption Upon Change of Control. Upon the
occurrence of a Change of Control prior to February 15, 2005, UCI may, at its
option, purchase Equipment from BRL pursuant to Section 28.4.3 of the Equipment
Lease Agreement, and the Issuers shall apply the proceeds thereof allocable to
the Notes to redeem all, but not less than all, of the outstanding Notes at a
redemption price equal to 100% of the principal amount thereof plus the
applicable Make Whole Premium (a "Change of Control Redemption"). The Issuers
shall give not less than 30 nor more than 60 days' notice of such redemption
within 30 days following a Change of Control.

                                      A-5
<PAGE>   84
                  Each of the foregoing redemptions of Notes will require the
prepayment by BRL of a corresponding percentage of the then outstanding BRL Term
Loan and Equity Investment.

                  8.       Notice of Redemption. Notice of redemption will be
mailed at least 30 days but not more than 60 days before the Redemption Date to
each Holder of Notes to be redeemed at such Holder's registered address. Notes
in denominations larger than $1,000 may be redeemed in part.

                  Except as set forth in the Indenture, if monies for the
redemption of the Notes called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Issuers
default in the payment of such redemption price plus accrued interest, if any,
the Notes called for redemption will cease to accrue interest from and after
such Redemption Date and the only right of the Holders of such Notes will be to
receive payment of the redemption price plus accrued interest, if any.

                  9.       Offers to Purchase. Sections 4.13 and 4.14 of the
Indenture provide that, after certain Asset Sales (as defined in the
Participation Agreement) and upon the occurrence of a Change of Control (as
defined in the Participation Agreement), and subject to further limitations
contained therein, the Issuers will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.

                  10.      Security. The Notes are entitled to the benefit of a
lien on the Collateral granted to the Collateral Agent for the benefit of, among
others, the Trustee on behalf of the Holders.

                  11.      Registration Rights. Pursuant to a registration
rights agreement among the Issuers, UCI and UCH and the Initial Purchasers, the
Issuer will be obligated to consummate an exchange offer pursuant to which the
Holder of this Note shall have the right to exchange this Note for Exchange
Notes (as defined in the Indenture), which have been registered under the
Securities Act, in like principal amount and having terms identical in all
material respects as the Initial Notes. The Holders of the Initial Notes shall
be entitled to receive certain additional interest payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the registration rights
agreement.

                  12.      Denominations; Transfer; Exchange. The Notes are in
registered form, without coupons, and in denominations of $1,000 and integral
multiples of $1,000. A Holder shall register the transfer of or exchange Notes
in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for
redemption.

                  13.      Persons Deemed Owners. The registered Holder of a
Note shall be treated as the owner of it for all purposes.

                                      A-6
<PAGE>   85
                  14.      Unclaimed Money. If money for the payment of
principal or interest remains unclaimed for one year, the Trustee and the Paying
Agent will pay the money back to the Issuers upon written request. After that,
all liability of the Trustee and such Paying Agent with respect to such money
shall cease.

                  15.      Discharge Prior to Redemption or Maturity. If the
Issuers at any time deposit with the Trustee U.S. Legal Tender or U.S.
Government Obligations sufficient to pay the principal of and interest on the
Notes to redemption or maturity and complies with the other provisions of the
Indenture relating thereto, the Issuers will be discharged from certain
provisions of the Indenture and the Notes (including certain covenants, but
including, under certain circumstances, its obligation to pay the principal of
and interest on the Notes but without affecting the rights of the Holders to
receive such amounts from such deposits).

                  16.      Amendment; Supplement; Waiver. Subject to certain
exceptions set forth in the Indenture, the Indenture or the Notes may be amended
or supplemented with the written consent of the Holders of a majority in
aggregate principal amount of the Notes then outstanding, and any past Default
or Event of Default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in aggregate principal amount of
the Notes then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, comply
with any requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the TIA or comply with Article Five of the
Indenture or make any other change that does not adversely affect the rights of
any Holder of a Note.

                  17.      Covenants. The Indenture contains certain covenants
with respect to the Issuers, including requirements relating to their line of
business. Pursuant to Section 4.06 of the Indenture, the Issuers must annually
report to the Trustee on compliance with such limitations.

                  18.      Successors. When a successor assumes, in accordance
with the Indenture, all the obligations of its predecessor under the Notes and
the Indenture, the predecessor, subject to certain exceptions, will be released
from those obligations.

                  19.      Defaults and Remedies. If an Event of Default occurs
and is continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee is not obligated to enforce the Indenture
or the Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest when due, for any reason) if it
determines that withholding notice is in their interest.

                                      A-7
<PAGE>   86
                  20.      Trustee Dealings with the Issuers. The Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Issuers or their respective
Affiliates as if it were not the Trustee.

                  21.      No Recourse Against Others. No partner, director,
officer, employee or stockholder, as such, of the Issuers, as such, shall have
any liability for any obligations of the Issuers under the Notes, the Indenture
or the Registration Rights Agreement or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.

                  22.      Authentication. This Note shall not be valid until
the Trustee or Authenticating Agent manually signs the certificate of
authentication on this Note.

                  23.      Governing Law. This Note and the Indenture shall be
governed by and construed in accordance with the laws of the State of New York,
as applied to contracts made and performed within the State of New York, without
regard to principles of conflict of laws. Each of the parties hereto agrees to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Note.

                  24.      Abbreviations and Defined Terms. Customary
abbreviations may be used in the name of a Holder of a Note or an assignee, such
as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN
(= joint tenants with right of survivorship and not as tenants in common), CUST
(= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

                  25.      CUSIP Numbers. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Issuers have caused CUSIP numbers to be printed on the Notes as a convenience to
the Holders of the Notes. No representation is made as to the accuracy of such
numbers as printed on the Notes and reliance may be placed only on the other
identification numbers printed hereon.

                  The Issuers will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture, which has the text of this
Note. Requests may be made to BRL Universal Equipment 2001 A, L.P., 2911 Turtle
Creek Boulevard, Suite 1240, Dallas, Texas 75219.

                                       A-8
<PAGE>   87
                                 ASSIGNMENT FORM

                  If you the Holder want to assign this Note, fill in the form
below and have your signature guaranteed:

                  I or we assign and transfer this Note to:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

(Print or type name, address and zip code and social security or tax ID number
of assignee)

and irrevocably appoint _____________________, agent to transfer this Note on
the books of the Issuers. The agent may substitute another to act for him.

Dated:  ____________________         Signed:

                                     ___________________________________________
                                          (Sign exactly as your name appears on
                                           the other side of this Note)

Signature Guarantee:  ___________________________________

                                      A-9
<PAGE>   88
                       OPTION OF HOLDER TO ELECT PURCHASE

                  If you want to elect to have this Note purchased by the
Issuers pursuant to Section 4.13 or Section 4.14 of the Indenture, check the
appropriate box:

                  Section 4.13 [   ]

                  Section 4.14 [   ]

                  If you want to elect to have only part of this Note purchased
by the Issuers pursuant to Section 4.13 or Section 4.14 of the Indenture, state
the amount you elect to have purchased:

$________________________

Dated: __________________           ____________________________________________

                                    NOTICE: The signature on this assignment
                                    must correspond with the name as it appears
                                    upon the face of the within Note in every
                                    particular without alteration or enlargement
                                    or any change whatsoever and be guaranteed.

Signature Guarantee:  ___________________________________

                                      A-10
<PAGE>   89
                                                                       EXHIBIT B

                                                            CUSIP No.:  [      ]

                      BRL UNIVERSAL EQUIPMENT 2001 A, L.P.
                          BRL UNIVERSAL EQUIPMENT CORP.

                  8-7/8% SENIOR SECURED NOTE DUE 2008, SERIES B

No.                                                                     $

         BRL UNIVERSAL EQUIPMENT 2001 A, L.P., a Delaware limited partnership,
and BRL UNIVERSAL EQUIPMENT CORP., a Delaware corporation (the "Issuers," which
term includes any successor entities), for value received promise to pay to Cede
& Co. or registered assigns the principal sum of            Dollars ($        )
on February 15, 2008.

         Interest Payment Dates: August 15 and February 15, commencing August
15, 2001

         Record Dates: August 1 and February 1

         Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.

                                      B-1
<PAGE>   90
         IN WITNESS WHEREOF, the Issuers have caused this Note to be signed
manually or by facsimile by its duly authorized officers.

                                     BRL UNIVERSAL EQUIPMENT 2001 A, L.P.

                                     By:  BRL Universal Equipment Management,
                                     Inc., its general partner

                                     By: _______________________________________
                                         Name:
                                         Title:

                                     BRL UNIVERSAL EQUIPMENT CORP.

                                     By: _______________________________________
                                         Name:
                                         Title:

                                      B-2
<PAGE>   91
Certificate of Authentication

                  This is one of the 8-7/8% Senior Secured Notes due 2008
referred to in the within-mentioned Indenture.

                                       THE BANK OF NEW YORK, as Trustee

                                       By: _____________________________________
                                                   Authorized Signatory

Date of Authentication:            , 2001

                                      B-3
<PAGE>   92
                              (REVERSE OF SECURITY)

                  8-7/8% Senior Secured Note due 2008, Series B

         1. Interest. BRL UNIVERSAL EQUIPMENT 2001 A, L.P., a Delaware limited
partnership and BRL UNIVERSAL EQUIPMENT CORP., a Delaware corporation (the
"Issuers"), promise to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest will accrue from the Issue Date until
maturity on the Notes at a rate of 8-7/8% per annum and will be payable
semi-annually on August 15 and February 15, commencing August 15, 2001. Interest
will be computed on the basis of a 360-day year of twelve 30-day months and, in
the case of a partial month, the actual number of days elapsed.

         2. Method of Payment. The Issuers shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are canceled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Issuers shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). The
Issuers may deliver any such interest payment to the Paying Agent or to a Holder
at the Holder's registered address.

         3. Paying Agent and Registrar. Initially, The Bank of New York (the
"Trustee") will act as Paying Agent and Registrar. The Issuers may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders.

         4. Indenture. The Issuers issued the Notes under an Indenture, dated as
of February 9, 2001 (the "Indenture"), between the Issuers and the Trustee. This
Note is one of a duly authorized issue of Exchange Notes of the Issuers
designated as their 8-7/8% Senior Secured Notes due 2008, Series B (the
"Exchange Notes"). The Notes include the 8-7/8% Notes due 2008 (the "Initial
Notes") and the Exchange Notes, issued in exchange for the Initial Notes
pursuant to a registration rights agreement. The Initial Notes and the Exchange
Notes are treated as a single class of securities under the Indenture.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of them. The Notes are general secured obligations
of the Issuers.

         Each Holder, by accepting a Note, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time in accordance with its terms.

                                      B-4
<PAGE>   93
         5. Optional Redemption. The Notes will be redeemable by the Issuers, in
whole at any time or in part from time to time, on and after February 15, 2005,
upon not less than 30 nor more than 60 days' notice, in the event of a permitted
purchase (pursuant to Section 28.4.1 of the Equipment Lease Agreement) of
Equipment from BRL by UCI with the proceeds of such purchase allocable to the
Notes, at the following redemption prices (expressed as percentages of the
principal amount thereof) if redeemed during the twelve-month period commencing
on February 15 of the year set forth below, plus, in each case, accrued and
unpaid interest thereon, if any, to the date of redemption:

<TABLE>
<CAPTION>
                 Year                                    Percentage
                 ----                                    ----------
<S>                                                      <C>
                 2005.................................   104.438%
                 2006.................................   102.219%
                 2007.................................   100.000%
</TABLE>

         6. Optional Redemption upon Equity Offerings. At any time, or from time
to time, on or prior to February 15, 2004, UCI may, at its option, apply the net
cash proceeds of one or more Equity Offerings to purchase Equipment from BRL
pursuant to Section 28.4.1 of the Equipment Lease Agreement. The Issuers will
use such proceeds allocable to the Notes to redeem up to 35% of the Notes at a
redemption price equal to 108.875% of the principal amount of the Notes to be
redeemed on the date of redemption, plus accrued and unpaid interest, if any;
provided that at least 65% of the aggregate principal amount of Notes originally
issued remains outstanding immediately after any such redemption. The permitted
purchase and such redemption must be completed not more than 120 days after the
consummation of such Equity Offering.

         As used in the preceding paragraph, "Equity Offering" means an
underwritten public offering or private placement of Qualified Capital Stock of
UCI or UCH, subsequent to the Issue Date (which proceeds (at least to the extent
of the purchase of Equipment from BRL to fund the repurchase of Notes, BRL Term
Loan and Equity Contribution), if received by UCH, will be contributed as common
equity to UCI).

         7. Optional Redemption upon Change of Control. Upon the occurrence of a
Change of Control prior to February 15, 2005, UCI may, at its option, purchase
Equipment from BRL pursuant to Section 28.4.3 of the Equipment Lease Agreement,
and the Issuers shall apply the proceeds thereof allocable to the Notes to
redeem all, but not less than all, of the outstanding Notes at a redemption
price equal to 100% of the principal amount thereof plus the applicable Make
Whole Premium (a "Change of Control Redemption"). The Issuers shall give not
less than 30 nor more than 60 days' notice of such redemption within 30 days
following a Change of Control.

         Each of the foregoing redemptions of Notes will require the prepayment
by BRL of a corresponding percentage of the then outstanding BRL Term Loan and
Equity Investment.

                                      B-5
<PAGE>   94
         8. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at such Holder's registered address. Notes in denominations
larger than $1,000 may be redeemed in part.

         Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Issuers default in the
payment of such redemption price plus accrued interest, if any, the Notes called
for redemption will cease to accrue interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the redemption price plus accrued interest, if any.

         9. Offers to Purchase. Sections 4.13 and 4.14 of the Indenture provide
that, after certain Asset Sales (as defined in the Participation Agreement) and
upon the occurrence of a Change of Control (as defined in the Participation
Agreement), and subject to further limitations contained therein, the Issuers
will make an offer to purchase certain amounts of the Notes in accordance with
the procedures set forth in the Indenture.

         10. Security. The Notes are entitled to the benefit of a lien on the
Collateral granted to the Collateral Agent for the benefit of, among others, the
Trustee on behalf of the Holders.

         11. Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, and in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.

         12. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes.

         13. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for one year, the Trustee and the Paying Agent will pay the
money back to the Issuers upon written request. After that, all liability of the
Trustee and such Paying Agent with respect to such money shall cease.

         14. Discharge Prior to Redemption or Maturity. If the Issuers at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption and
complies with the other provisions of the Indenture relating thereto, the
Issuers will be discharged from certain provisions of the Indenture and the
Notes (including certain covenants, including, under certain circumstances, its
obligation

                                      B-6
<PAGE>   95
to pay the principal of and interest on the Notes but without affecting the
rights of the Holders to receive such amounts from such deposit).

         15. Amendment; Supplement; Waiver. Subject to certain exceptions set
forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of a majority in aggregate
principal amount of the Notes then outstanding, and any past Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes, comply with any
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the TIA or comply with Article Five of the Indenture or
make any other change that does not adversely affect the rights of any Holder of
a Note.

         16. Covenants. The Indenture contains certain covenants with respect to
the Issuers, including requirements relating to their line of business. Pursuant
to Section 4.06 of the Indenture, the Issuers must annually report to the
Trustee on compliance with such limitations.

         17. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.

         18. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee is not obligated to enforce the Indenture
or the Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest when due, for any reason) if it
determines that withholding notice is in their interest.

         19. Trustee Dealings with the Issuers. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Issuers or their respective Affiliates as
if it were not the Trustee.

         20. No Recourse Against Others. No partner, director, officer, employee
or stockholder, as such, of the Issuers, as such, shall have any liability for
any obligations of the Issuers under the Notes, the Indenture or the
Registration Rights Agreement or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by ac-

                                      B-7
<PAGE>   96
cepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.

         21. Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.

         22. Governing Law. This Note and the Indenture shall be governed by and
construed in accordance with the laws of the State of New York, as applied to
contracts made and performed within the State of New York, without regard to
principles of conflict of laws. Each of the parties hereto agrees to submit to
the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or relating to this Note.

         23. Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

         24. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.

         The Issuers will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note.
Requests may be made to: BRL Universal Equipment 2001 A, L.P., 2911 Turtle Creek
Boulevard, Suite 1240, Dallas, Texas 75219.

                                      B-8
<PAGE>   97
                                 ASSIGNMENT FORM

         If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:

                  I or we assign and transfer this Note to:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
                 (Print or type name, address and zip code and
                 social security or tax ID number of assignee)

and irrevocably appoint _____________________, agent to transfer this Note on
the books of the Issuers. The agent may substitute another to act for him.

Dated: __________________      Signed: ____________________________________
                                       (Sign exactly as your name appears on the
                                       other side of this Note)

Signature Guarantee:  ___________________________________

                                      B-9
<PAGE>   98
                       OPTION OF HOLDER TO ELECT PURCHASE

                  If you want to elect to have this Note purchased by the
Issuers pursuant to Section 4.13 or Section 4.14 of the Indenture, check the
appropriate box:

                  Section 4.13 [     ]

                  Section 4.14 [     ]

                  If you want to elect to have only part of this Note purchased
by the Issuers pursuant to Section 4.13 or Section 4.14 of the Indenture, state
the amount you elect to have purchased:

$______________________

Dated: ________________         ____________________________________________
                                NOTICE:  The signature on this assignment must
                                correspond with the name as it appears upon the
                                face of  the within Note in every particular
                                without alteration or enlargement or any change
                                whatsoever and be guaranteed.

Signature Guarantee:  ___________________________________

                                      B-10
<PAGE>   99
                                                                       EXHIBIT C

                         FORM OF CERTIFICATE OF TRANSFER

BRL Universal Equipment 2001 A, L.P.
BRL Universal Equipment Corp.
2911 Turtle Creek Boulevard
Dallas, TX 75219

The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286

Attention:  Corporate Trust Trustee Administration

         Re: 8-7/8% Senior Secured Notes due 2008

         Reference is hereby made to the Indenture, dated as of February 9, 2001
(the "Indenture"), between BRL Universal Equipment 2001 A, L.P. and BRL
Universal Equipment Corp., as issuers (the "Issuers"), and The Bank of New York,
as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.

         ______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. [ ] CHECK IF TRANSFEREE IS A QIB IN ACCORDANCE WITH RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Global Note and/or the Definitive Note and in
the Indenture and the Securities Act.

2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Regulation S under
the Securities Act and, ac-

                                      C-1<PAGE>   1

                                                                   EXHIBIT 10.13

                                CREDIT AGREEMENT

                  THIS CREDIT AGREEMENT is made effective as of the 1st day of
December, 2000, by and between CONTANGO OIL & GAS COMPANY, a Delaware
corporation (the "Borrower"), and BANK ONE, TEXAS, NATIONAL ASSOCIATION,
NATIONAL BANKING ASSOCIATION (THE "LENDER").

                                   WITNESSETH:

                  In consideration of the mutual covenants and agreements herein
contained, the Borrower and the Lender hereby agree as follows:

                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION

1.1 Terms Defined Above. As used in this Credit Agreement, the terms "Borrower"
and "Lender" shall have the meaning assigned to them hereinabove.

1.2 Additional Defined Terms. As used in this Credit Agreement, each of the
following terms shall have the meaning assigned thereto in this Section, unless
the context otherwise requires:

                  "Affiliate" shall mean any Person directly or indirectly
         controlling, or under common control with, the Borrower and includes
         any Subsidiary of the Borrower and any "affiliate" of the Borrower
         within the meaning of Reg. ss.240.12b-2 of the Securities Exchange Act
         of 1934, as amended, with "control," as used in this definition,
         meaning possession, directly or indirectly, of the power to direct or
         cause the direction of management, policies or action through ownership
         of voting securities, contract, voting trust, or membership in
         management or in the group appointing or electing management or
         otherwise through formal or informal arrangements or business
         relationships.

                  "Agreement" shall mean this Credit Agreement, as it may be
         amended, supplemented, or restated from time to time.

                  "Available Commitment" shall mean, at any time, an amount
         equal to the remainder, if any, of (a) the Borrowing Base in effect at
         such time minus (b) the Loan Balance at such time.

                  "Borrowing Base" shall mean, at any time, the amount
         determined by the Lender in accordance with Section 2.7 and then in
         effect.

                                       1
<PAGE>   2

                  "Borrowing Request" shall mean each written request, in
         substantially the form attached hereto as Exhibit II, by the Borrower
         to the Lender for a borrowing or prepayment pursuant to Sections 2.1 or
         2.9 or , each of which shall:

           a.  be signed by a Responsible Officer of the Borrower;

           b.  specify the amount requested or prepaid and the date of the
               borrowing or prepayment (which shall be a Business Day); and

           c.  be delivered to the Lender no later than 11:00 a.m., Central
               Standard or Daylight Savings Time, as the case may be, on the
               Business Day of the requested borrowing or prepayment.

                  "Business Day" shall mean a day other than a Saturday, Sunday,
         legal holiday for commercial banks under the laws of the State of
         Texas, or any other day when banking is suspended in the State of
         Texas.

                  "Closing Date" shall mean the effective date of this
         Agreement.

                  "Collateral" shall mean the Mortgaged Properties and any other
         Property now or at any time used or intended as security for the
         payment or performance of all or any portion of the Obligations.

                  "Commitment" shall mean the obligation of the Lender, subject
         to applicable provisions of this Agreement, to make Loans to or for the
         benefit of the Borrower pursuant to Section .

                  "Commitment Fee" shall mean each fee payable to the Lender by
         the Borrower pursuant to Section 2.10.

                  "Commitment Period" shall mean the period from and including
         the Closing Date to but not including the Commitment Termination Date.

                  "Commitment Termination Date" shall mean eighteen months
         following the Closing Date.

                  "Commodity Hedge Agreement" shall mean any crude oil, natural
         gas, or other hydrocarbon floor, collar, cap, price protection, or swap
         agreement, in form and substance with a Person acceptable to the
         Lender.

                  "Commonly Controlled Entity" shall mean any Person which is
         under common control with the Borrower within the meaning of Section
         4001 of ERISA.

                  "Compliance Certificate" shall mean each certificate,
         substantially in the form attached hereto as Exhibit III, executed by a
         Responsible Officer of the Borrower and furnished to the Lender from
         time to time in accordance with Sections 5.2 and 5.3.

                                       2
<PAGE>   3

                  "Contingent Obligation" shall mean, as to any Person, any
         obligation of such Person guaranteeing or in effect guaranteeing any
         Indebtedness, leases, dividends, or other obligations of any other
         Person (for purposes of this definition, a "primary obligation") in any
         manner, whether directly or indirectly, including, without limitation,
         any obligation of such Person, regardless of whether such obligation is
         contingent, (a) to purchase any primary obligation or any Property
         constituting direct or indirect security therefor, (b) to advance or
         supply funds (i) for the purchase or payment of any primary obligation,
         or (ii) to maintain working or equity capital of any other Person in
         respect of any primary obligation, or otherwise to maintain the net
         worth or solvency of any other Person, (c) to purchase Property,
         securities or services primarily for the purpose of assuring the owner
         of any primary obligation of the ability of the Person primarily liable
         for such primary obligation to make payment thereof, or (d) otherwise
         to assure or hold harmless the owner of any such primary obligation
         against loss in respect thereof, with the amount of any Contingent
         Obligation being deemed to be equal to the stated or determinable
         amount of the primary obligation in respect of which such Contingent
         Obligation is made or, if not stated or determinable, the maximum
         reasonably anticipated liability in respect thereof as determined by
         such Person in good faith.

                  "Current Assets" shall mean all assets which would, in
         accordance with GAAP, be included as current assets on a balance sheet
         of the Borrower, as of the date of calculation, plus availability under
         this facility.

                  "Current Liabilities" shall mean all liabilities which would,
         in accordance with GAAP, be included as current liabilities on a
         balance sheet of the Borrower as of the date of calculation, but
         excluding the current maturities in respect to the Obligations, both
         principal and interest.

                  "Debt Service" shall mean an amount equal to the actual
         interest payments for the quarter, plus 12.5% of the outstanding
         balance of this facility at the end of the quarter.

                  "Default" shall mean any event or occurrence which with the
         lapse of time or the giving of notice or both would become an Event of
         Default.

                  "Default Rate" shall mean a per annum interest rate equal to
         the Prime Rate plus five percent (5%), but in no event exceeding the
         Highest Lawful Rate.

                  "Dollars" and "$" shall mean dollars in lawful currency of the
         United States of America.

                  "EBITDAX" shall mean, for any period, net income for such
         period plus interest expense, federal and state income taxes,
         depreciation, amortization, and other non-cash expenses and losses,
         exploration expenses (which otherwise would be capitalized under full
         cost accounting method) less non-cash gains and less preferred cash
         dividends paid.

                  "Engineering Fee" shall mean each fee payable to the Lender by
         the Borrower pursuant to Section .

                                       3
<PAGE>   4

                  "Environmental Complaint" shall mean any written or oral
         complaint, order, directive, claim, citation, notice of environmental
         report or investigation, or other notice by any Governmental Authority
         or any other Person with respect to (a) air emissions, (b) spills,
         releases, or discharges to soils, any improvements located thereon,
         surface water, groundwater, or the sewer, septic, waste treatment,
         storage, or disposal systems servicing any Property of the Borrower,
         (c) solid or liquid waste disposal, (d) the use, generation, storage,
         transportation, or disposal of any Hazardous Substance, or (e) other
         environmental, health, or safety matters affecting any Property of the
         Borrower or the business conducted thereon.

                  "Environmental Laws" shall mean (a) the following federal laws
         as they may be cited, referenced, and amended from time to time: the
         Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the
         Comprehensive Environmental Response, Compensation and Liability Act,
         the Endangered Species Act, the Resource Conservation and Recovery Act,
         the Occupational Safety and Health Act, the Hazardous Materials
         Transportation Act, the Superfund Amendments and Reauthorization Act,
         and the Toxic Substances Control Act; (b) any and all equivalent
         environmental statutes of any state in which Property of the Borrower
         is situated, as they may be cited, referenced and amended from time to
         time; (c) any rules or regulations promulgated under or adopted
         pursuant to the above federal and state laws; and (d) any other
         equivalent federal, state, or local statute or any requirement, rule,
         regulation, code, ordinance, or order adopted pursuant thereto,
         including, without limitation, those relating to the generation,
         transportation, treatment, storage, recycling, disposal, handling, or
         release of Hazardous Substances.

                  "ERISA" shall mean the Employee Retirement Income Security Act
         of 1974, as amended from time to time, and the regulations thereunder
         and interpretations thereof.

                  "Event of Default" shall mean any of the events specified in
         Section 7.1.

                  "Facility Fee" shall mean the fee payable to the Lender by the
         Borrower pursuant to Section 2.12.

                  "Final Maturity" shall mean the date which is eighteen months
         following the Closing Date.

                  "Financial Statements" shall mean statements of the financial
         condition of the Borrower as at the point in time and for the period
         indicated and consisting of at least a balance sheet and related
         statements of operations, common stock and other stockholders' equity,
         and cash flows for the Borrower and, when required by applicable
         provisions of this Agreement to be audited, accompanied by the
         unqualified certification of a nationally-recognized firm of
         independent certified public accountants or other independent certified
         public accountants acceptable to the Lender and footnotes to any of the
         foregoing, all of which shall be prepared in accordance with GAAP
         consistently applied and in comparative form with respect to the
         corresponding period of the preceding fiscal period.

                                       4
<PAGE>   5

                  "Floating Rate" shall mean an interest rate per annum equal to
         the Prime Rate from time to time in effect plus one and one-fourth
         percent (1 1/4%), but in no event exceeding the Highest Lawful Rate.

                  "GAAP" shall mean generally accepted accounting principles
         established by the Financial Accounting Standards Board or the American
         Institute of Certified Public Accountants and in effect in the United
         States from time to time.

                  "Governmental Authority" shall mean any nation, country,
         commonwealth, territory, government, state, county, parish,
         municipality, or other political subdivision and any entity exercising
         executive, legislative, judicial, regulatory, or administrative
         functions of or pertaining to government.

                  "Hazardous Substances" shall mean flammables, explosives,
         radioactive materials, hazardous wastes, asbestos, or any material
         containing asbestos, polychlorinated biphenyls (PCBs), toxic substances
         or related materials, petroleum, petroleum products, associated oil or
         natural gas exploration, production, and development wastes, or any
         substances defined as "hazardous substances," "hazardous materials,"
         "hazardous wastes," or "toxic substances" under the Comprehensive
         Environmental Response, Compensation and Liability Act, as amended, the
         Superfund Amendments and Reauthorization Act, as amended, the Hazardous
         Materials Transportation Act, as amended, the Resource Conservation and
         Recovery Act, as amended, the Toxic Substances Control Act, as amended,
         or any other law or regulation now or hereafter enacted or promulgated
         by any Governmental Authority.

                  "Highest Lawful Rate" shall mean the maximum non-usurious
         interest rate, if any (or, if the context so requires, an amount
         calculated at such rate), that at any time or from time to time may be
         contracted for, taken, reserved, charged, or received under applicable
         laws of the State of Texas or the United States of America, whichever
         authorizes the greater rate, as such laws are presently in effect or,
         to the extent allowed by applicable law, as such laws may hereafter be
         in effect and which allow a higher maximum non-usurious interest rate
         than such laws now allow.

                  "Indebtedness" shall mean, as to any Person, without
         duplication, (a) all liabilities (excluding reserves for deferred
         income taxes, deferred compensation liabilities, and other deferred
         liabilities and credits) which in accordance with GAAP would be
         included in determining total liabilities as shown on the liability
         side of a balance sheet, (b) all obligations of such Person evidenced
         by bonds, debentures, promissory notes, or similar evidences of
         indebtedness, (c) all other indebtedness of such Person for borrowed
         money, and (d) all obligations of others, to the extent any such
         obligation is secured by a Lien on the assets of such Person (whether
         or not such Person has assumed or become liable for the obligation
         secured by such Lien).

                  "Insolvency Proceeding" shall mean application (whether
         voluntary or instituted by another Person) for or the consent to the
         appointment of a receiver, trustee, conservator, custodian, or
         liquidator of any Person or of all or a substantial part of the
         Property of such Person, or the filing of a petition (whether

                                       5
<PAGE>   6

         voluntary or instituted by another Person) commencing a case under
         Title 11 of the United States Code, seeking liquidation,
         reorganization, or rearrangement or taking advantage of any bankruptcy,
         insolvency, debtor's relief, or other similar law of the United States,
         the State of Texas, or any other jurisdiction.

                  "Intellectual Property" shall mean patents, patent
         applications, trademarks, tradenames, copyrights, technology, know-how,
         and processes.

                  "Investment" in any Person shall mean any stock, bond, note,
         or other evidence of Indebtedness, or any other security (other than
         current trade and customer accounts) of, investment or partnership
         interest in or loan to, such Person.

                  "Lien" shall mean any interest in Property securing an
         obligation owed to, or a claim by, a Person other than the owner of
         such Property, whether such interest is based on common law, statute,
         or contract, and including, but not limited to, the lien or security
         interest arising from a mortgage, ship mortgage, encumbrance, pledge,
         security agreement, conditional sale or trust receipt, or a lease,
         consignment, or bailment for security purposes (other than true leases
         or true consignments), liens of mechanics, materialmen, and artisans,
         maritime liens and reservations, exceptions, encroachments, easements,
         rights of way, covenants, conditions, restrictions, leases, and other
         title exceptions and encumbrances affecting Property which secure an
         obligation owed to, or a claim by, a Person other than the owner of
         such Property (for the purpose of this Agreement, the Borrower shall be
         deemed to be the owner of any Property which it has acquired or holds
         subject to a conditional sale agreement, financing lease, or other
         arrangement pursuant to which title to the Property has been retained
         by or vested in some other Person for security purposes), and the
         filing or recording of any financing statement or other security
         instrument in any public office.

                  "Limitation Period" shall mean any period while any amount
         remains owing on the Note and interest on such amount, calculated at
         the applicable interest rate, plus any fees or other sums payable under
         any Loan Document and deemed to be interest under applicable law, would
         exceed the amount of interest which would accrue at the Highest Lawful
         Rate.

                  "Loan" shall mean any loan made by the Lender to or for the
         benefit of the Borrower pursuant to this Agreement.

                  "Loan Balance" shall mean, at any time, the outstanding
         principal balance of the Note at such time.

                  "Loan Documents" shall mean this Agreement, the Note, the
         Security Instruments, and all other documents and instruments now or
         hereafter delivered pursuant to the terms of or in connection with this
         Agreement, the Note, or the Security Instruments, and all renewals and
         extensions of, amendments and supplements to, and restatements of, any
         or all of the foregoing from time to time in effect.

                  "Material Adverse Effect" shall mean (a) any adverse effect on
         the business, operations, properties, condition (financial or
         otherwise), or prospects

                                       6
<PAGE>   7

         of the Borrower, which increases the risk that any of the Obligations
         will not be repaid as and when due, or (b) any adverse effect upon the
         Collateral.

                  "Mortgaged Properties" shall mean all Oil and Gas Properties
         of the Borrower subject to a perfected first-priority Lien in favor of
         the Lender, subject only to Permitted Liens, as security for the
         Obligations.

                  "Note" shall mean the promissory note of the Borrower, in the
         form attached hereto as Exhibit I, together with all renewals,
         extensions for any period, increases, and rearrangements thereof.

                  "Obligations" shall mean, without duplication, (a) all
         Indebtedness evidenced by the Note, (b) the obligation of the Borrower
         for the payment of Commitment Fees, Facility Fees, and Engineering
         Fees, (c) all obligations and liabilities whether now existing or
         hereafter arising of the Borrower to the Lender in connection with any
         Commodity Hedge Agreement or Rate Management Transaction, and (d) all
         other obligations and liabilities of the Borrower to the Lender, now
         existing or hereafter incurred, under, arising out of or in connection
         with any Loan Document, and to the extent that any of the foregoing
         includes or refers to the payment of amounts deemed or constituting
         interest, only so much thereof as shall have accrued, been earned and
         which remains unpaid at each relevant time of determination.

                  "Oil and Gas Properties" shall mean fee, leasehold, or other
         interests in or under mineral estates or oil, gas, and other liquid or
         gaseous hydrocarbon leases with respect to Properties situated in the
         United States or offshore from any State of the United States,
         including, without limitation, overriding royalty and royalty
         interests, leasehold estate interests, net profits interests,
         production payment interests, and mineral fee interests, together with
         contracts executed in connection therewith and all tenements,
         hereditaments, appurtenances and Properties appertaining, belonging,
         affixed, or incidental thereto.

                  "Permitted Liens" shall mean (a) Liens for taxes, assessments,
         or other governmental charges or levies not yet due or which (if
         foreclosure, distraint, sale, or other similar proceedings shall not
         have been initiated) are being contested in good faith by appropriate
         proceedings, and such reserve as may be required by GAAP shall have
         been made therefor, (b) Liens in connection with workers' compensation,
         unemployment insurance or other social security (other than Liens
         created by Section 4068 of ERISA), old-age pension, or public liability
         obligations which are not yet due or which are being contested in good
         faith by appropriate proceedings, if such reserve as may be required by
         GAAP shall have been made therefor, (c) Liens in favor of vendors,
         carriers, warehousemen, repairmen, mechanics, workmen, materialmen,
         construction, or similar Liens arising by operation of law in the
         ordinary course of business in respect of obligations which are not yet
         due or which are being contested in good faith by appropriate
         proceedings, if such reserve as may be required by GAAP shall have been
         made

                                       7
<PAGE>   8

         therefor, (d) Liens in favor of operators and non-operators under joint
         operating agreements or similar contractual arrangements arising in the
         ordinary course of the business of the Borrower to secure amounts
         owing, which amounts are not yet due or are being contested in good
         faith by appropriate proceedings, if such reserve as may be required by
         GAAP shall have been made therefor, (e) Liens under production sales
         agreements, division orders, operating agreements, and other agreements
         customary in the oil and gas business for processing, producing, and
         selling hydrocarbons securing obligations not constituting Indebtedness
         and provided that such Liens do not secure obligations to deliver
         hydrocarbons at some future date without receiving full payment
         therefor within 90 days of delivery, (f) easements, rights of way,
         restrictions, and other similar encumbrances, and minor defects in the
         chain of title which are customarily accepted in the oil and gas
         financing industry, none of which interfere with the ordinary conduct
         of the business of the Borrower or materially detract from the value or
         use of the Property to which they apply, and (g) Liens in favor of the
         Lender and other Liens expressly permitted under the Security
         Instruments.

                  "Person" shall mean an individual, corporation, partnership,
         trust, unincorporated organization, government, any agency or political
         subdivision of any government, or any other form of entity.

                  "Plan" shall mean, at any time, any employee benefit plan
         which is covered by ERISA and in respect of which the Borrower or any
         Commonly Controlled Entity is (or, if such plan were terminated at such
         time, would under Section 4069 of ERISA be deemed to be) an "employer"
         as defined in Section 3(5) of ERISA.

                  "Prime Rate" shall mean a rate per annum equal to the prime
         rate of interest announced from time to time by the Lender or its
         parent (which is not necessarily the lowest rate charged to any
         customer), changing when and as said prime rate changes.

                  "Principal Office" shall mean the principal office of the
         Lender in Houston, Texas, presently located at 910 Travis Street,
         Houston, Texas 77002.

                  "Property" shall mean any interest in any kind of property or
         asset, whether real, personal or mixed, tangible or intangible.

                  "Rate Management Transaction" shall mean any transaction
         (including an agreement with respect thereto) now existing or hereafter
         entered into between the Borrower and the Lenders which is a rate swap,
         basis swap, forward rate transaction, commodity swap, commodity option,
         equity or equity index swap, equity or equity index option, bond
         option, interest rate option, foreign exchange transaction, cap
         transaction, floor transaction, collar transaction, forward
         transaction, currency swap transaction, cross-currency rate swap
         transaction, currency option or any other similar transaction
         (including any option with respect to any of these transactions) or any
         combination thereof, whether linked to on or more interest rates,
         foreign currencies, commodity prices, equity prices or other financial
         measures.

                  "Regulation D" shall mean Regulation D of the Board of
         Governors of the Federal Reserve System, as the same may be amended or
         supplemented from time to time.

                                       8
<PAGE>   9

                  "Regulatory Change" shall mean the passage, adoption,
         institution, or amendment of any federal, state, local, or foreign
         Requirement of Law (including, without limitation, Regulation D), or
         any interpretation, directive, or request (whether or not having the
         force of law) of any Governmental Authority or monetary authority
         charged with the enforcement, interpretation, or administration
         thereof, occurring after the Closing Date and applying to a class of
         banks including the Lender.

                  "Release of Hazardous Substances" shall mean any emission,
         spill, release, disposal, or discharge, except in accordance with a
         valid permit, license, certificate, or approval of the relevant
         Governmental Authority, of any Hazardous Substance into or upon (a) the
         air, (b) soils or any improvements located thereon, (c) surface water
         or groundwater, or (d) the sewer or septic system, or the waste
         treatment, storage, or disposal system servicing any Property of the
         Borrower.

                  "Requirement of Law" shall mean, as to any Person, the
         certificate or articles of incorporation and by-laws or other
         organizational or governing documents of such Person, and any
         applicable law, treaty, ordinance, order, judgment, rule, decree,
         regulation, or determination of an arbitrator, court, or other
         Governmental Authority, including, without limitation, rules,
         regulations, orders, and requirements for permits, licenses,
         registrations, approvals, or authorizations, in each case as such now
         exist or may be hereafter amended and are applicable to or binding upon
         such Person or any of its Property or to which such Person or any of
         its Property is subject.

                  "Reserve Report" shall mean each report delivered to the
         Lender pursuant to Section .

                  "Responsible Officer" shall mean, as to any Person, its
         President, Chief Executive Officer or any Vice President.

                  "Security Instruments" shall mean the security instruments
         executed and delivered in satisfaction of the condition set forth in
         Section 3.3, and all other documents and instruments at any time
         executed as security for all or any portion of the Obligations, as such
         instruments may be amended, restated, or supplemented from time to
         time.

                  "Subsidiary" shall mean, as to any Person, a corporation of
         which shares of stock having ordinary voting power (other than stock
         having such power only by reason of the happening of a contingency) to
         elect a majority of the board of directors or other managers of such
         corporation are at the time owned, or the management of which is
         otherwise controlled, directly or indirectly through one or more
         intermediaries, or both, by such Person.

                  "Superfund Site" shall mean those sites listed on the
         Environmental Protection Agency National Priority List and eligible for
         remedial action or any comparable state registries or list in any state
         of the United States.

                  "Tangible Net Worth" shall mean (a) total assets, as would be
         reflected on a balance sheet of the Borrower prepared in accordance
         with GAAP, exclusive of Intellectual Property, experimental or
         organization expenses,

                                       9
<PAGE>   10

         franchises, licenses, permits, and other intangible assets, treasury
         stock, unamortized underwriters' debt discount and expenses, and
         goodwill minus (b) total liabilities, as would be reflected on a
         balance sheet of the Borrower prepared in accordance with GAAP.

                  "Total Funded Debt" shall mean for any period, the debt owed
         to the Lender.

                  "Total Liabilities" shall mean all liabilities which would, in
         accordance with GAAP, be included as liabilities on a balance sheet of
         the Borrower as of the date of calculation.

                  "Transferee" shall mean any Person to which the Lender has
         sold, assigned, transferred, or granted a participation in any of the
         Obligations, as authorized pursuant to Section , and any Person
         acquiring, by purchase, assignment, transfer, or participation, from
         any such purchaser, assignee, transferee, or participant, any part of
         such Obligations.

                  "UCC" shall mean the Uniform Commercial Code as from time to
         time in effect in the State of Texas.

1.3 Undefined Financial Accounting Terms. Undefined financial accounting terms
used in this Agreement shall be defined according to GAAP at the time in effect.

1.4 References. References in this Agreement to Exhibit, Article, or Section
numbers shall be to Exhibits, Articles, or Sections of this Agreement, unless
expressly stated to the contrary. References in this Agreement to "hereby,"
"herein," "hereinafter," "hereinabove," "hereinbelow," "hereof," "hereunder" and
words of similar import shall be to this Agreement in its entirety and not only
to the particular Exhibit, Article, or Section in which such reference appears.

1.5 Articles and Sections. This Agreement, for convenience only, has been
divided into Articles and Sections; and it is understood that the rights and
other legal relations of the parties hereto shall be determined from this
instrument as an entirety and without regard to the aforesaid division into
Articles and Sections and without regard to headings prefixed to such Articles
or Sections.

1.6 Number and Gender. Whenever the context requires, reference herein made to
the single number shall be understood to include the plural; and likewise, the
plural shall be understood to include the singular. Definitions of terms defined
in the singular or plural shall be equally applicable to the plural or singular,
as the case may be, unless otherwise indicated. Words denoting sex shall be
construed to include the masculine, feminine and neuter, when such construction
is appropriate; and specific enumeration shall not exclude the general but shall
be construed as cumulative.

1.7 Incorporation of Exhibits. The Exhibits attached to this Agreement are
incorporated herein and shall be considered a part of this Agreement for all
purposes.

                                       10
<PAGE>   11

                                   ARTICLE II

                                TERMS OF FACILITY

2.1 Revolving Line of Credit. Upon the terms and conditions (including, without
limitation, the right of the Lender to decline to make any Loan so long as any
Default or Event of Default exists) and relying on the representations and
warranties contained in this Agreement, the Lender agrees, during the Commitment
Period, to make Loans, in immediately available funds at the Principal Office,
to or for the benefit of the Borrower, from time to time on any Business Day
designated by the Borrower following receipt by the Lender of a Borrowing
Request; provided, however, no Loan shall exceed the then existing Available
Commitment.

(b) Subject to the terms of this Agreement, during the Commitment Period, the
Borrower may borrow, repay, and reborrow such funds. Except for prepayments made
pursuant to Section 2.8, each borrowing and prepayment of principal of Loans
shall be in an amount at least equal to $50,000. Each borrowing or prepayment
shall be deemed a separate borrowing or prepayment for purposes of the
foregoing.

(c) The Loans shall be made and maintained at the Principal Office and shall be
evidenced by the Note.

2.2 Use of Loan Proceeds. Proceeds of all Loans shall be used solely for funding
development, exploration and acquisition activities and other general corporate
purposes.

2.3 Interest. Subject to the terms of this Agreement (including, without
limitation, Section 2.15), interest on the Loans shall accrue and be payable at
a rate per annum equal to the Floating Rate. Interest on all Loans shall be
computed on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed (including the first day but excluding the last day) during
the period for which payable. Interest provided for herein shall be calculated
on unpaid sums actually advanced and outstanding pursuant to the terms of this
Agreement and only for the period from the date or dates of such advances until
repayment. Notwithstanding the foregoing, interest on past-due principal and, to
the extent permitted by applicable law, past-due interest, shall accrue at the
Default Rate, computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed (including the first day but excluding the last
day) during the period for which payable, and shall be payable upon demand by
the Lender at any time as to all or any portion of such interest.

2.4 Repayment of Loans and Interest. Accrued and unpaid interest on the
aggregate outstanding Loan Balance shall be due and payable monthly commencing
on the first day of January, 2001, and continuing on the first day of each
calendar month thereafter while any amount of the Loan Balance remains
outstanding, the payment in each instance to be the amount of interest which has
accrued and remains unpaid in respect of the Loan Balance. The Loan Balance,
together with all accrued and unpaid interest thereon, shall be due and payable
on the Commitment Termination Date.

2.5 Outstanding Amounts. The outstanding principal balance of the Note reflected
by the notations by the Lender on its records shall be deemed rebuttably
presumptive evidence of the principal amount owing on the Note. The liability
for payment of principal and interest evidenced by the Note shall be limited to
principal amounts actually advanced and outstanding

                                       11
<PAGE>   12

pursuant to this Agreement and interest on such amounts calculated in accordance
with this Agreement.

2.6 Time, Place, and Method of Payments. All payments required pursuant to this
Agreement or the Note shall be made in lawful money of the United States of
America and in immediately available funds, shall be deemed received by the
Lender on the next Business Day following receipt if such receipt is after 2:00
p.m., Central Standard or Daylight Savings Time, as the case may be, on any
Business Day, and shall be made at the Principal Office. Except as provided to
the contrary herein, if the due date of any payment hereunder or under the Note
would otherwise fall on a day which is not a Business Day, such date shall be
extended to the next succeeding Business Day, and interest shall be payable for
any principal so extended for the period of such extension.

2.7 Borrowing Base Determinations. (a) The Borrowing Base as of the Closing Date
is acknowledged by the Borrower and the Lender to be $5,000,000. There will be
no monthly Borrowing Base reductions prior to the first scheduled Borrowing Base
re-determination which is as of March 1, 2001.

(b) The Borrowing Base shall be redetermined semi-annually on the basis of
information supplied by the Borrower in compliance with the provisions of this
Agreement, including, without limitation, Reserve Reports, and all other
information available to the Lender. In addition, the Lender shall, in the
normal course of business following a request of the Borrower, redetermine the
Borrowing Base; provided, however, the Lender shall not be obligated to respond
to more than two such requests during any calendar year, and in no event shall
the Lender be required to redetermine the Borrowing Base more than once in any
three-month period, including, without limitation, each scheduled semi-annual
redetermination provided for above. Notwithstanding the foregoing, the Lender
may at its discretion redetermine the Borrowing Base and the amount by which the
Borrowing Base shall be reduced each calendar month as set forth in Section
2.7(a) at any time and from time to time.

(c) Upon each determination of the Borrowing Base by the Lender, the Lender
shall notify the Borrower orally (confirming such notice promptly in writing) of
such determination, and the Borrowing Base and the amount by which the Borrowing
Base shall be reduced or increased so communicated to the Borrower shall become
effective upon such written notification and shall remain in effect until the
next subsequent determination of the Borrowing Base and the amount by which the
Borrowing Base shall be reduced.

(d) The Borrowing Base shall represent the determination by the Lender, in
accordance with the applicable definitions and provisions herein contained and
its customary lending practices for loans of this nature, of the value, for loan
purposes, of the Oil and Gas Properties, subject, in the case of any increase in
the Borrowing Base, to the credit approval process of the Lender. Furthermore,
the Borrower acknowledges that the determination of the Borrowing Base contains
an equity cushion (market value in excess of loan value), which is acknowledged
by the Borrower to be essential for the adequate protection of the Lender.

2.8 Mandatory Prepayments. If at any time the Loan Balance exceeds the Borrowing
Base then in effect, the Borrower shall, within 30 days of notice from the
Lender of such occurrence, (a) prepay, or make arrangements acceptable to the
Lender for the prepayment of, the amount of such excess for application on the
Loan Balance, (b) provide additional collateral, of character and value
satisfactory to the Lender in its sole discretion, to secure the Obligations by
the execution and delivery to the Lender of security instruments in form and
substance

                                       12
<PAGE>   13

satisfactory to the Lender, or (c) effect any combination of the alternatives
described in clauses (a) and (b) of this Section and acceptable to the Lender in
its sole discretion.

2.9 Voluntary Prepayments of Loans. Subject to applicable provisions of this
Agreement, the Borrower shall have the right at any time or from time to time to
prepay Loans without prepayment penalty provided, however, (a) the Borrower
shall pay all accrued and unpaid interest on the amounts prepaid, and (b) no
such prepayment shall serve to postpone the repayment when due of any
Obligation.

2.10 Commitment Fee. In addition to interest on the Note as provided herein and
all other fees payable hereunder and to compensate the Lender for maintaining
funds available, the Borrower shall pay to the Lender, in immediately available
funds, on the first day of January, 2001, and on the first day of each third
calendar month thereafter during the Commitment Period, a fee in the amount of
one-fourth percent (1/4%) per annum, calculated on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed (including the first day
but excluding the last day), on the average daily amount of the Available
Commitment during the preceding quarterly period.

2.11 Engineering Fee. In addition to interest on the Note as provided herein and
all other fees payable hereunder and to compensate the Lender for the costs of
evaluating the Mortgaged Properties and reviewing the Reserve Reports, the
Borrower shall pay to the Lender, in immediately available funds, on the date of
each Borrower requested redetermination of the Borrowing Base, an engineering
fee in the amount of $4,500.

2.12 Facility Fee. In addition to interest on the Note as provided herein and
all other fees payable hereunder and to compensate the Lender for the costs of
the extension of credit hereunder, the Borrower shall pay to the Lender on the
Closing Date, in immediately available funds, a facility fee in the amount of
$50,000, one-half of which has been paid.

2.13 Loans to Satisfy Obligations of Borrower. The Lender may, but shall not be
obligated to, make Loans for the benefit of the Borrower and apply proceeds
thereof to the satisfaction of any condition, warranty, representation, or
covenant of the Borrower contained in this Agreement or any other Loan Document.
Any such Loan shall be evidenced by the Note and shall be made at the Floating
Rate.

2.14 Security Interest in Accounts; Right of Offset. As security for the payment
and performance of the Obligations, the Borrower hereby transfers, assigns, and
pledges to the Lender and grants to the Lender a security interest in all funds
of the Borrower now or hereafter or from time to time on deposit with the
Lender, with such interest of the Lender to be retransferred, reassigned, and/or
released by the Lender, as the case may be, at the expense of the Borrower upon
payment in full and complete performance by the Borrower of all Obligations. All
remedies as secured party or assignee of such funds shall be exercisable by the
Lender upon the occurrence of any Event of Default, regardless of whether the
exercise of any such remedy would result in any penalty or loss of interest or
profit with respect to any withdrawal of funds deposited in a time deposit
account prior to the maturity thereof. Furthermore, the Borrower hereby grants
to the Lender the right, exercisable at such time as any Obligation shall
mature, whether by acceleration of maturity or otherwise, of offset or banker's
lien against all funds of the Borrower now or hereafter or from time to time on
deposit with the Lender, regardless of whether the exercise of any such remedy
would result in any penalty or loss of interest or profit with respect to any
withdrawal of funds deposited in a time deposit account prior to the maturity
thereof.

                                       13
<PAGE>   14

2.15 General Provisions Relating to Interest. (a) It is the intention of the
parties hereto to comply strictly with the usury laws of the State of Texas and
the United States of America. In this connection, there shall never be
collected, charged, or received on the sums advanced hereunder interest in
excess of that which would accrue at the Highest Lawful Rate. For purposes of
Chapter 303 of the Texas Finance Code (Vernon's 1999), the Borrower agrees that
the Highest Lawful Rate shall be the "weekly ceiling" as defined in such
Chapter, provided that the Lender may also rely, to the extent permitted by
applicable laws of the State of Texas or the United States of America, on
alternative maximum rates of interest under other laws of the State of Texas or
the United States of America applicable to the Lender, if greater.

(b) Notwithstanding anything herein or in the Note to the contrary, during any
Limitation Period, the interest rate to be charged on amounts evidenced by the
Note shall be the Highest Lawful Rate, and the obligation, if any, of the
Borrower for the payment of fees or other charges deemed to be interest under
applicable law shall be suspended. During any period or periods of time
following a Limitation Period, to the extent permitted by applicable laws of the
State of Texas or the United States of America, the interest rate to be charged
hereunder shall remain at the Highest Lawful Rate until such time as there has
been paid to the Lender (i) the amount of interest in excess of that accruing at
the Highest Lawful Rate that the Lender would have received during the
Limitation Period had the interest rate remained at the otherwise applicable
rate, and (ii) all interest and fees otherwise payable to the Lender but for the
effect of such Limitation Period.

(c) If, under any circumstances, the aggregate amounts paid on the Note or under
this Agreement or any other Loan Document include amounts which by law are
deemed interest and which would exceed the amount permitted if the Highest
Lawful Rate were in effect, the Borrower stipulates that such payment and
collection will have been and will be deemed to have been, to the extent
permitted by applicable laws of the State of Texas or the United States of
America, the result of mathematical error on the part of the Borrower and the
Lender; and the Lender shall promptly refund the amount of such excess (to the
extent only of such interest payments in excess of that which would have accrued
and been payable on the basis of the Highest Lawful Rate) upon discovery of such
error by the Lender or notice thereof from the Borrower. In the event that the
maturity of any Obligation is accelerated, by reason of an election by the
Lender or otherwise, or in the event of any required or permitted prepayment,
then the consideration constituting interest under applicable laws may never
exceed the Highest Lawful Rate; and excess amounts paid which by law are deemed
interest, if any, shall be credited by the Lender on the principal amount of the
Obligations, or if the principal amount of the Obligations shall have been paid
in full, refunded to the Borrower.

(d) All sums paid, or agreed to be paid, to the Lender for the use, forbearance
and detention of the proceeds of any advance hereunder shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full term hereof until paid in full so that the actual rate of
interest is uniform but does not exceed the Highest Lawful Rate throughout the
full term hereof.

2.16 Letters in Lieu of Transfer Orders. The Lender agrees that none of the
letters in lieu of transfer or division orders provided by the Borrower pursuant
to Section 3.3 or Section 5.7 will be sent to the addressees thereof prior to
the occurrence of an Event of Default, at which time the Lender may, at its
option and in addition to the exercise of any of its other rights and remedies,
send any or all of such letters.

                                       14
<PAGE>   15

2.17 Power of Attorney. The Borrower hereby designates the Lender as its agent
and attorney-in-fact, to act in its name, place, and stead for the purpose of
completing and, upon the occurrence of an Event of Default, delivering any and
all of the letters in lieu of transfer orders delivered by the Borrower to the
Lender pursuant to Section 3.3 or Section 5.7, including, without limitation,
completing any blanks contained in such letters and attaching exhibits thereto
describing the relevant Collateral. The Borrower hereby ratifies and confirms
all that the Lender shall lawfully do or cause to be done by virtue of this
power of attorney and the rights granted with respect to such power of attorney.
This power of attorney is coupled with the interests of the Lender in the
Collateral, shall commence and be in full force and effect as of the Closing
Date and shall remain in full force and effect and shall be irrevocable so long
as any Obligation remains outstanding or unpaid or any Commitment exists. The
powers conferred on the Lender by this appointment are solely to protect the
interests of the Lender under the Loan Documents and shall not impose any duty
upon the Lender to exercise any such powers. The Lender shall be accountable
only for amounts that it actually receives as a result of the exercise of such
powers and shall not be responsible to the Borrower or any other Person for any
act or failure to act with respect to such powers, except for gross negligence
or willful misconduct.

                                   ARTICLE III

                                   CONDITIONS

                  The obligations of the Lender to enter into this Agreement and
to make Loans are subject to the satisfaction of the following conditions
precedent:

3.1 Receipt of Loan Documents and Other Items. The Lender shall have no
obligation under this Agreement unless and until all matters incident to the
consummation of the transactions contemplated herein, including, without
limitation, the review by the Lender or its counsel of the title of the Borrower
to its Oil and Gas Properties, shall be satisfactory to the Lender, and the
Lender shall have received, reviewed, and approved the following documents and
other items, appropriately executed when necessary and, where applicable,
acknowledged by one or more authorized officers of the Borrower, all in form and
substance satisfactory to the Lender and dated, where applicable, of even date
herewith or a date prior thereto and acceptable to the Lender:

(a) multiple counterparts of this Agreement as requested by the Lender;

(b) the Note;

(c) copies of the Articles of Incorporation or Certificate of Incorporation and
all amendments thereto and the bylaws and all amendments thereto of the
Borrower, accompanied by a certificate issued by the secretary or an assistant
secretary of the Borrower to the effect that each such copy is correct and
complete;

(d) certificates of incumbency and signatures of all officers of the Borrower
who are authorized to execute Loan Documents on behalf of the Borrower, each
such certificate being executed by the secretary or an assistant secretary of
the Borrower;

(e) copies of corporate resolutions approving the Loan Documents and authorizing
the transactions contemplated herein and therein, duly adopted by the board of
directors of the Borrower, accompanied by certificates of the secretary or an
assistant secretary of

                                       15
<PAGE>   16

the Borrower, to the effect that such copies are true and correct copies of
resolutions duly adopted at a meeting or by unanimous consent of the board of
directors of the Borrower, and that such resolutions constitute all the
resolutions adopted with respect to such transactions, have not been amended,
modified, or revoked in any respect, and are in full force and effect as of the
date of such certificate;

(f) unaudited Financial Statements of the Borrower as of September 30, 2000;

(g) certificates dated as of a recent date from the Secretary of State or other
appropriate Governmental Authority evidencing the existence or qualification and
good standing of the Borrower in its jurisdiction of incorporation and in any
other jurisdictions where it does business;

(h) engineering reports covering the Oil and Gas Properties;

(i) the opinion of Morgan, Lewis and Bockius, L.L.P., counsel to the Borrower,
in substantially the form attached hereto as Exhibit , with such changes thereto
as may be approved by the Lender;

(j) certificates evidencing the insurance coverage required pursuant to Section
; and

(k) such other agreements, documents, instruments, opinions, certificates,
waivers, consents, and evidence as the Lender may reasonably request.

3.2 Each Loan. In addition to the conditions precedent stated elsewhere herein,
the Lender shall not be obligated to make any Loan unless:

(a) the Borrower shall have delivered to the Lender a Borrowing Request at least
the requisite time prior to the requested date for the relevant Loan and each
statement or certification made in such Borrowing Request shall be true and
correct in all material respects on the requested date for such Loan;

(b) no Event of Default or Default shall exist or will occur as a result of the
making of the requested Loan;

(c) if requested by the Lender, the Borrower shall have delivered evidence
satisfactory to the Lender substantiating any of the matters contained in this
Agreement which are necessary to enable the Borrower to qualify for such Loan;

(d) the Lender shall have received, reviewed, and approved such additional
documents and items as may be requested by the Lender with respect to such Loan;

(e) no event shall have occurred which, in the reasonable opinion of the Lender,
could have a Material Adverse Effect;

(f) each of the representations and warranties contained in this Agreement shall
be true and correct in all material respects and shall be deemed to be repeated
by the Borrower as if made on the requested date for such Loan;

(g) neither the consummation of the transactions contemplated hereby nor the
making of such Loan shall contravene, violate, or conflict with any Requirement
of Law;

                                       16
<PAGE>   17

(h) the Lender shall have received the payment of all Engineering Fees, Facility
Fees, and other fees payable to the Lender hereunder and reimbursement from the
Borrower, or special legal counsel for the Lender shall have received payment
from the Borrower, for all reasonable fees and expenses of counsel to the Lender
for which the Borrower is responsible pursuant to applicable provisions of this
Agreement and for which invoices have been presented as of or prior to the date
of the relevant Loan; and

(i) all matters incident to the consummation of the transactions hereby
contemplated shall be satisfactory to the Lender.

3.3 Mortgage of Oil and Gas Properties. In the event the Loan Balance exceeds
$3,000,000 or if the Total Funded Debt to annualized quarterly EBITDAX exceeds
0.40 to 1.00 at the end of any fiscal quarter subsequent to the Closing Date,
the following documents will be required:

1.1

         (a) Mortgage, Deed of Trust, Indenture, Security Agreement, Assignment
of Production, and Financing Statement from the Borrower covering all Oil and
Gas Properties of the Borrower and all improvements, personal property, and
fixtures related thereto;

         (b) Financing Statements from the Borrower, as debtors, constituent to
the instrument described in clause (a) above;

         (c) undated letters, in form and substance satisfactory to the Lender,
from the Borrower to each purchaser of production and disburser of the proceeds
of production from or attributable to the Mortgaged Properties, together with
additional letters with the addressees left blank, authorizing and directing the
addressees to make future payments attributable to production from the Mortgaged
Properties directly to the Lender;

         (d) confirmation, acceptable to the Lender, of the title of the
Borrower to the Mortgaged Properties, free and clear of Liens other than
Permitted Liens;

         (e) all operating, lease, sublease, royalty, sales, exchange,
processing, farmout, bidding, pooling, unitization, communitization, and other
agreements relating to the Mortgaged Properties requested by the Lender;

         (f) results of searches of the UCC Records of the Secretary of State of
the State of Texas from a source acceptable to the Lender and reflecting no
Liens against any of the Collateral as to which perfection of a Lien is
accomplished by the filing of a financing statement other than in favor of the
Lender;

         (g) all of the Security Instruments shall be in full force and effect
and provide to the Lender the security intended thereby;

         (h) the Borrower shall hold full legal title to the Collateral and be
the sole beneficial owner thereof; and

         (i) the Borrower shall pay to special legal counsel for the Lender
estimated fees charged by filing officers and other public officials incurred or
to be incurred in

                                       17
<PAGE>   18

connection with the filing and recordation of any Security Instruments, for
which invoices have been presented as of or prior to the date of the requested
Loan;

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                  To induce the Lender to enter into this Agreement and to make
the Loans, the Borrower represents and warrants to the Lender (which
representations and warranties shall survive the delivery of the Note) that:

4.1 Due Authorization. The execution and delivery by the Borrower of this
Agreement and the borrowings hereunder, the execution and delivery by the
Borrower of the Note, the repayment of the Note and interest and fees provided
for in the Note and this Agreement, the execution and delivery of the Security
Instruments by the Borrower and the performance of all obligations of the
Borrower under the Loan Documents are within the power of the Borrower, have
been duly authorized by all necessary corporate action by the Borrower, and do
not and will not (a) require the consent of any Governmental Authority, (b)
contravene or conflict with any Requirement of Law, (c) contravene or conflict
with any indenture, instrument, or other agreement to which the Borrower is a
party or by which any Property of the Borrower may be presently bound or
encumbered, or (d) result in or require the creation or imposition of any Lien
in, upon or of any Property of the Borrower under any such indenture,
instrument, or other agreement, other than the Loan Documents.

4.2 Corporate Existence. The Borrower is a corporation duly organized, legally
existing, and in good standing under the laws of its state of incorporation and
is duly qualified as a foreign corporation and is in good standing in all
jurisdictions wherein the ownership of Property or the operation of its business
necessitates same, other than those jurisdictions wherein the failure to so
qualify will not have a Material Adverse Effect.

4.3 Valid and Binding Obligations. All Loan Documents, when duly executed and
delivered by the Borrower, will be the legal, valid, and binding obligations of
the Borrower, enforceable against the Borrower in accordance with their
respective terms.

4.4 Security Instruments. Subject to Section 3.3, the provisions of each
Security Instrument are effective to create in favor of the Lender, a legal,
valid, and enforceable Lien in all right, title, and interest of the Borrower in
the Collateral described therein, which Liens, assuming the accomplishment of
recording and filing in accordance with applicable laws prior to the
intervention of rights of other Persons, shall constitute fully perfected
first-priority Liens on all right, title, and interest of the Borrower in the
Collateral described therein.

4.5 Title to Assets. The Borrower has good and indefeasible title to all of its
Properties, free and clear of all Liens except Permitted Liens.

4.6 Scope and Accuracy of Financial Statements. The Financial Statements of the
Borrower as of September 30, 2000, present fairly the financial position and
results of operations and cash flows of the Borrower in accordance with GAAP as
at the relevant point in time or for the period indicated, as applicable. No
event or circumstance has occurred since September 30, 2000, which could
reasonably be expected to have a Material Adverse Effect.

                                       18
<PAGE>   19

4.7 No Material Misstatements. No information, exhibit, statement, or report
furnished to the Lender by or at the direction of the Borrower in connection
with this Agreement contains any material misstatement of fact or omits to state
a material fact or any fact necessary to make the statements contained therein
not misleading as of the date made or deemed made.

4.8 Liabilities, Litigation, and Restrictions. Other than as listed under the
heading "Liabilities" on Exhibit V attached hereto, the Borrower has no
liabilities, direct, or contingent, which may materially and adversely affect
its business or operations or subject to the Security Instruments being
delivered pursuant to Section 3.3, its ownership of the Collateral. Except as
set forth under the heading "Litigation" on Exhibit hereto, no litigation or
other action of any nature affecting the Borrower is pending before any
Governmental Authority or, to the best knowledge of the Borrower, threatened
against or affecting the Borrower which might reasonably be expected to result
in any impairment of its ownership of any Oil and Gas Property or have a
Material Adverse Effect. To the best knowledge of the Borrower, after due
inquiry, no unusual or unduly burdensome restriction, restraint or hazard exists
by contract, Requirement of Law, or otherwise relative to the business or
operations of the Borrower or, subject to the Security Instruments being
delivered pursuant to Section 3.3, the ownership and operation of the Collateral
other than such as relate generally to Persons engaged in business activities
similar to those conducted by the Borrower.

4.9 Authorizations; Consents. Except as expressly contemplated by this
Agreement, no authorization, consent, approval, exemption, franchise, permit, or
license of, or filing with, any Governmental Authority or any other Person is
required to authorize or is otherwise required in connection with the valid
execution and delivery by the Borrower of the Loan Documents or any instrument
contemplated hereby, the repayment by the Borrower of the Note and interest and
fees provided in the Note and this Agreement, or the performance by the Borrower
of the Obligations.

4.10 Compliance with Laws. The Borrower and its Property, including, without
limitation, the Oil and Gas Property, are in compliance with all applicable
Requirements of Law, including, without limitation, Environmental Laws, the
Natural Gas Policy Act of 1978, as amended, and ERISA, except to the extent
non-compliance with any such Requirements of Law could not reasonably be
expected to have a Material Adverse Effect.

4.11 ERISA. Except as set forth on Exhibit V, the Borrower does not maintain nor
has it maintained any Plan. The Borrower does not currently contribute to or
have any obligation to contribute to or otherwise have any liability with
respect to any Plan.

4.12 Environmental Laws. To the best knowledge and belief of the Borrower,
except as would not have a Material Adverse Effect, or as described on Exhibit
under the heading "Environmental Matters:"

(a) no Property of the Borrower is currently on or has ever been on, or is
adjacent to any Property which is on or has ever been on, any federal or state
list of Superfund Sites;

(b) no Hazardous Substances have been generated, transported, and/or disposed of
by the Borrower at a site which was, at the time of such generation,
transportation, and/or disposal, or has since become, a Superfund Site;

(c) except in accordance with applicable Requirements of Law or the terms of a
valid permit, license, certificate, or approval of the relevant Governmental
Authority,

                                       19
<PAGE>   20

no Release of Hazardous Substances by the Borrower or from, affecting, or
related to any Property of the Borrower or adjacent to any Property of the
Borrower has occurred; and

(d) no Environmental Complaint has been received by the Borrower.

4.13 Compliance with Federal Reserve Regulations. No transaction contemplated by
the Loan Documents is in violation of any regulations promulgated by the Board
of Governors of the Federal Reserve System, including, without limitation,
Regulations T, U, or X.

4.14 Investment Company Act Compliance. The Borrower is not, nor is the Borrower
directly or indirectly controlled by or acting on behalf of any Person which is,
an "investment company" or an "affiliated person" of an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.

4.15 Public Utility Holding Company Act Compliance. The Borrower is not a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

4.16 Proper Filing of Tax Returns; Payment of Taxes Due. The Borrower has duly
and properly filed its United States income tax return and all other tax returns
which are required to be filed and has paid all taxes due except such as are
being contested in good faith and as to which adequate provisions and
disclosures have been made. The respective charges and reserves on the books of
the Borrower with respect to taxes and other governmental charges are adequate.

4.17 Refunds. Except as described on Exhibit under the heading "Refunds," no
orders of, proceedings pending before, or other requirements of, the Federal
Energy Regulatory Commission, the Texas Railroad Commission, or any Governmental
Authority exist which could result in the Borrower being required to refund any
material portion of the proceeds received or to be received from the sale of
hydrocarbons constituting part of the Mortgaged Property.

4.18 Gas Contracts. Except as described on Exhibit under the heading "Gas
Contracts," the Borrower (a) is not obligated in any material respect by virtue
of any prepayment made under any contract containing a "take-or-pay" or
"prepayment" provision or under any similar agreement to deliver hydrocarbons
produced from or allocated to any of the Mortgaged Property at some future date
without receiving full payment therefor within 90 days of delivery, and (b) has
not produced gas, in any material amount, subject to, and neither the Borrower
nor any of the Mortgaged Properties is subject to, balancing rights of third
parties or subject to balancing duties under governmental requirements, except
as to such matters for which the Borrower has established monetary reserves
adequate in amount to satisfy such obligations and has segregated such reserves
from other accounts.

4.19 Intellectual Property. The Borrower owns or is licensed to use all
Intellectual Property necessary to conduct all business material to its
condition (financial or otherwise), business, or operations as such business is
currently conducted. No claim has been asserted or is pending by any Person with
the respect to the use of any such Intellectual Property or challenging or
questioning the validity or effectiveness of any such Intellectual Property; and
the Borrower knows of no valid basis for any such claim. The use of such
Intellectual Property by the Borrower does not infringe on the rights of any
Person, except for such claims and infringements as do not, in the aggregate,
give rise to any material liability on the part of the Borrower.

                                       20
<PAGE>   21

4.20 Casualties or Taking of Property. Except as disclosed on Exhibit under the
heading "Casualties," since September 30, 2000, neither the business nor any
Property of the Borrower has been materially adversely affected as a result of
any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of Property, or
cancellation of contracts, permits, or concessions by any Governmental
Authority, riot, activities of armed forces, or acts of God.

4.21 Locations of Borrower. The principal place of business and chief executive
office of the Borrower is located at the address of the Borrower set forth in
Section or at such other location as the Borrower may have, by proper written
notice hereunder, advised the Lender, provided that such other location is
within a state in which appropriate financing statements from the Borrower in
favor of the Lender have been filed.

4.22 Subsidiaries. The Borrower has no Subsidiaries except those described on
Exhibit under the heading "Subsidiaries".

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

                  So long as any Obligation remains outstanding or unpaid or any
Commitment exists, the Borrower shall:

5.1 Maintenance and Access to Records. Keep adequate records, in accordance with
GAAP, of all its transactions so that at any time, and from time to time, its
true and complete financial condition may be readily determined, and promptly
following the reasonable request of the Lender, make such records available for
inspection by the Lender and, at the expense of the Borrower, allow the Lender
to make and take away copies thereof.

5.2 Quarterly Financial Statements; Compliance Certificates. Deliver to the
Lender, (a) on or before the 45th day after the close of each of the first three
quarterly periods of each fiscal year of the Borrower, a copy of the unaudited
Financial Statements of the Borrower as at the close of such quarterly period
and from the beginning of such fiscal year to the end of such period, such
Financial Statements to be certified by a Responsible Officer of the Borrower as
having been prepared in accordance with GAAP consistently applied and as a fair
presentation of the condition of the Borrower, subject to changes resulting from
normal year-end audit adjustments, and (b) on or before the 45th day after the
close of each fiscal quarter, with the exception of the last fiscal quarter, a
Compliance Certificate.

5.3 Annual Financial Statements. Deliver to the Lender, on or before the 90th
day after the close of each fiscal year of the Borrower, a copy of the annual
audited Financial Statements of the Borrower and a Compliance Certificate.

5.4 Oil and Gas Reserve Reports. (a) Deliver to the Lender no later than August
1 of each year during the term of this Agreement, engineering reports in form
and substance satisfactory to the Lender, certified by any nationally- or
regionally-recognized independent consulting petroleum engineers acceptable to
the Lender as fairly and accurately setting forth (i) the proven and producing,
shut-in, behind-pipe, and undeveloped oil and gas reserves (separately
classified as such) attributable to the Oil and Gas Properties as of July 1 of
the year for which such reserve reports are furnished, (ii) the aggregate
present value of the future net income with

                                       21
<PAGE>   22

respect to such Oil and Gas Properties, discounted at a stated per annum
discount rate of proven and producing reserves, (iii) projections of the annual
rate of production, gross income, and net income with respect to such proven and
producing reserves, and (iv) information with respect to the "take-or-pay,"
"prepayment," and gas-balancing liabilities of the Borrower.

(b) Deliver to the Lender no later than February 1 of each year during the term
of this Agreement, engineering reports in form and substance satisfactory to the
Lender prepared by or under the supervision of the chief petroleum engineer of
the Borrower evaluating the Oil and Gas Properties as of January 1 of the year
for which such reserve reports are furnished and updating the information
provided in the reports pursuant to Section (a).

(c) Each of the reports provided pursuant to this Section shall be submitted to
the Lender together with additional data concerning pricing, quantities of
production from the Oil and Gas Properties, volumes of production sold,
purchasers of production, gross revenues, expenses, and such other information
and engineering and geological data with respect thereto as the Lender may
reasonably request.

5.5 Title Opinions; Title Defects. In the event mortgages are required pursuant
to Section 3.3, promptly upon the request of the Lender, furnish to the Lender
title opinions, in form and substance and by counsel satisfactory to the Lender,
or other confirmation of title acceptable to the Lender, covering Oil and Gas
Properties constituting not less than 81% of the value, determined by the Lender
in its sole discretion, of the Mortgaged Properties; and promptly, but in any
event within 60 days after notice by the Lender of any defect, material in the
opinion of the Lender in value, in the title of the Borrower to any of its Oil
and Gas Properties, clear such title defects, and, in the event any such title
defects are not cured in a timely manner, pay all related costs and fees
incurred by the Lender to do so.

5.6 Notices of Certain Events. Deliver to the Lender, immediately upon having
knowledge of the occurrence of any of the following events or circumstances, a
written statement with respect thereto, signed by a Responsible Officer of the
Borrower and setting forth the relevant event or circumstance and the steps
being taken by the Borrower with respect to such event or circumstance:

(a) any Default or Event of Default;

(b) any default or event of default under any contractual obligation of the
Borrower, or any litigation, investigation, or proceeding between the Borrower
and any Governmental Authority which, in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;

(c) any litigation or proceeding involving the Borrower as a defendant or in
which any Property of the Borrower is subject to a claim and in which the amount
involved is $500,000 or more and which is not covered by insurance or in which
injunctive or similar relief is sought;

(d) the receipt by the Borrower of any Environmental Complaint;

(e) any actual, proposed, or threatened testing or other investigation by any
Governmental Authority or other Person concerning the environmental condition
of, or relating to, any Property of the Borrower or adjacent to any Property of
the Borrower following any allegation of a violation of any Requirement of Law;

                                       22
<PAGE>   23

(f) any Release of Hazardous Substances by the Borrower or from, affecting, or
related to any Property of the Borrower or adjacent to any Property of the
Borrower except in accordance with applicable Requirements of Law or the terms
of a valid permit, license, certificate, or approval of the relevant
Governmental Authority, or the violation of any Environmental Law, or the
revocation, suspension, or forfeiture of or failure to renew, any permit,
license, registration, approval, or authorization which could reasonably be
expected to have a Material Adverse Effect;

(g) the change in identity or address of any Person remitting to the Borrower
proceeds from the sale of hydrocarbon production from or attributable to any
Mortgaged Property;

(h) any change in the senior management of the Borrower; and

(i) any other event or condition which could reasonably be expected to have a
Material Adverse Effect.

5.7 Letters in Lieu of Transfer Orders; Division Orders. In the event mortgages
are required pursuant to Section 3.3. promptly upon request by the Lender at any
time and from time to time, and without limitation on the rights of the Lender
pursuant to Sections 2.16 and 2.17 and , execute such letters in lieu of
transfer orders, in addition to the letters signed by the Borrower and delivered
to the Lender in satisfaction of the condition set forth in Section 3.3(c)
and/or division and/or transfer orders as are necessary or appropriate to
transfer and deliver to the Lender proceeds from or attributable to any
Mortgaged Property.

5.8 Additional Information. Furnish to the Lender, promptly upon the request of
the Lender, such additional financial or other information concerning the
assets, liabilities, operations, and transactions of the Borrower as the Lender
may from time to time reasonably request; and notify the Lender not less than
ten Business Days prior to the occurrence of any condition or event that may
change the proper location for the filing of any financing statement or other
public notice or recording for the purpose of perfecting a Lien in any
Collateral, including, without limitation, any change in its name or the
location of its principal place of business or chief executive office; and upon
the request of the Lender, execute such additional Security Instruments as may
be necessary or appropriate in connection therewith.

5.9 Compliance with Laws. Except to the extent the failure to comply or cause
compliance would not have a Material Adverse Effect, comply with all applicable
Requirements of Law, including, without limitation, (a) the Natural Gas Policy
Act of 1978, as amended, (b) ERISA, (c) Environmental Laws, and (d) all permits,
licenses, registrations, approvals, and authorizations (i) related to any
natural or environmental resource or media located on, above, within, in the
vicinity of, related to or affected by any Property of the Borrower, (ii)
required for the performance of the operations of the Borrower, or (iii)
applicable to the use, generation, handling, storage, treatment, transport, or
disposal of any Hazardous Substances; and cause all employees, crew members,
agents, contractors, subcontractors, and future lessees (pursuant to appropriate
lease provisions) of the Borrower, while such Persons are acting within the
scope of their relationship with the Borrower, to comply with all such
Requirements of Law as may be necessary or appropriate to enable the Borrower to
so comply.

5.10 Payment of Assessments and Charges. Pay all taxes, assessments,
governmental charges, rent, and other Indebtedness which, if unpaid, might
become a Lien against the Property

                                       23
<PAGE>   24

of the Borrower, except any of the foregoing being contested in good faith and
as to which adequate reserve in accordance with GAAP has been established or
unless failure to pay would not have a Material Adverse Effect.

5.11 Maintenance of Corporate Existence and Good Standing. Maintain its
corporate existence or qualification and good standing in its jurisdictions of
incorporation and in all jurisdictions wherein the Property now owned or
hereafter acquired or business now or hereafter conducted necessitates same,
unless the failure to do so would not have a Material Adverse Effect.

5.12 Payment of Notes; Performance of Obligations. Pay the Note according to the
reading, tenor, and effect thereof, as modified hereby, and do and perform in
all material respects every act and discharge all of its other Obligations.

5.13 Further Assurances. Promptly cure any defects in the execution and delivery
of any of the Loan Documents and all agreements contemplated thereby, and
execute, acknowledge, and deliver such other assurances and instruments as
shall, in the reasonable opinion of the Lender, be necessary to fulfill the
terms of the Loan Documents.

5.14 Subsequent Fees and Expenses of Lender. Upon request by the Lender,
promptly reimburse the Lender (to the fullest extent permitted by law) for all
amounts reasonably expended, advanced, or incurred by or on behalf of the Lender
to satisfy any obligation of the Borrower under any of the Loan Documents; to
collect the Obligations; to ratify, amend, restate, or prepare additional Loan
Documents, as the case may be; for the filing and recordation of Security
Instruments; to enforce the rights of the Lender under any of the Loan
Documents; and to protect the Properties or business of the Borrower, including,
without limitation, the Collateral, which amounts shall be deemed compensatory
in nature and liquidated as to amount upon notice to the Borrower by the Lender
and which amounts shall include, but not be limited to (a) all court costs, (b)
reasonable attorneys' fees, (c) reasonable fees and expenses of auditors and
accountants incurred to protect the interests of the Lender, (d) fees and
expenses incurred in connection with the participation by the Lender as a member
of the creditors' committee in a case commenced under any Insolvency Proceeding,
(e) fees and expenses incurred in connection with lifting the automatic stay
prescribed in ss.362 Title 11 of the United States Code, and (f) fees and
expenses incurred in connection with any action pursuant to ss.1129 Title 11 of
the United States Code all reasonably incurred by the Lender in connection with
the collection of any sums due under the Loan Documents, together with interest
at the per annum interest rate equal to the Floating Rate, calculated on a basis
of a calendar year of 365 or 366 days, as the case may be, counting the actual
number of days elapsed, on each such amount from the date of notification that
the same was expended, advanced, or incurred by the Lender until the date it is
repaid to the Lender, with the obligations under this Section surviving the
non-assumption of this Agreement in a case commenced under any Insolvency
Proceeding and being binding upon the Borrower and/or a trustee, receiver,
custodian, or liquidator of the Borrower appointed in any such case.

5.15 Operation of Oil and Gas Properties. Develop, maintain, and operate its Oil
and Gas Properties in a prudent and workmanlike manner in accordance with
industry standards.

5.16 Maintenance and Inspection of Properties. Maintain all of its tangible
Properties in good repair and condition, ordinary wear and tear excepted; make
all necessary replacements thereof and operate such Properties in a good and
workmanlike manner; and permit any authorized representative of the Lender to
visit and inspect, at the expense of the Borrower, any tangible Property of the
Borrower.

                                       24
<PAGE>   25

5.17 Maintenance of Insurance. Maintain insurance with respect to its Properties
and businesses against such liabilities, casualties, risks, and contingencies as
is customary in the relevant industry and sufficient to prevent a Material
Adverse Effect, all such insurance to be in amounts and from insurers acceptable
to the Lender, maintained by Borrower, naming the Lender as loss payee, and,
upon any renewal of any such insurance and at other times upon request by the
Lender, furnish to the Lender evidence, satisfactory to the Lender, within 30
days of the Closing Date of the maintenance of such insurance.

5.18 INDEMNIFICATION. INDEMNIFY AND HOLD THE LENDER AND ITS SHAREHOLDERS,
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT, AND AFFILIATES AND
EACH TRUSTEE FOR THE BENEFIT OF THE LENDER UNDER ANY SECURITY INSTRUMENT
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES, LIABILITIES,
FINES, PENALTIES, CHARGES, ADMINISTRATIVE AND JUDICIAL PROCEEDINGS AND ORDERS,
JUDGMENTS, REMEDIAL ACTIONS, REQUIREMENTS AND ENFORCEMENT ACTIONS OF ANY KIND,
AND ALL COSTS AND EXPENSES INCURRED IN CONNECTION THEREWITH (INCLUDING, WITHOUT
LIMITATION, ATTORNEYS' FEES AND EXPENSES), ARISING DIRECTLY OR INDIRECTLY, IN
WHOLE OR IN PART, FROM (A) THE PRESENCE OF ANY HAZARDOUS SUBSTANCES ON, UNDER,
OR FROM ANY PROPERTY OF THE BORROWER, WHETHER PRIOR TO OR DURING THE TERM
HEREOF, (B) ANY ACTIVITY CARRIED ON OR UNDERTAKEN ON OR OFF ANY PROPERTY OF THE
BORROWER, WHETHER PRIOR TO OR DURING THE TERM HEREOF, AND WHETHER BY THE
BORROWER OR ANY PREDECESSOR IN TITLE, EMPLOYEE, AGENT, CONTRACTOR, OR
SUBCONTRACTOR OF THE BORROWER OR ANY OTHER PERSON AT ANY TIME OCCUPYING OR
PRESENT ON SUCH PROPERTY, IN CONNECTION WITH THE HANDLING, TREATMENT, REMOVAL,
STORAGE, DECONTAMINATION, CLEANUP, TRANSPORTATION, OR DISPOSAL OF ANY HAZARDOUS
SUBSTANCES AT ANY TIME LOCATED OR PRESENT ON OR UNDER SUCH PROPERTY, (C) ANY
RESIDUAL CONTAMINATION ON OR UNDER ANY PROPERTY OF THE BORROWER, (D) ANY
CONTAMINATION OF ANY PROPERTY OR NATURAL RESOURCES ARISING IN CONNECTION WITH
THE GENERATION, USE, HANDLING, STORAGE, TRANSPORTATION OR DISPOSAL OF ANY
HAZARDOUS SUBSTANCES BY THE BORROWER OR ANY EMPLOYEE, AGENT, CONTRACTOR, OR
SUBCONTRACTOR OF THE BORROWER WHILE SUCH PERSONS ARE ACTING WITHIN THE SCOPE OF
THEIR RELATIONSHIP WITH THE BORROWER, IRRESPECTIVE OF WHETHER ANY OF SUCH
ACTIVITIES WERE OR WILL BE UNDERTAKEN IN ACCORDANCE WITH APPLICABLE REQUIREMENTS
OF LAW, OR (E) THE PERFORMANCE AND ENFORCEMENT OF ANY LOAN DOCUMENT OR ANY OTHER
ACT OR OMISSION IN CONNECTION WITH OR RELATED TO ANY LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING, WITHOUT LIMITATION, ANY OF THE
FOREGOING IN THIS SECTION ARISING FROM NEGLIGENCE, WHETHER SOLE OR CONCURRENT,
ON THE PART OF THE LENDER OR ANY OF ITS SHAREHOLDERS, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT, OR AFFILIATES OR ANY TRUSTEE FOR THE
BENEFIT OF THE LENDER UNDER ANY SECURITY INSTRUMENT; WITH THE FOREGOING
INDEMNITY SURVIVING SATISFACTION OF ALL OBLIGATIONS AND THE TERMINATION OF THIS
AGREEMENT, UNLESS ALL SUCH OBLIGATIONS HAVE BEEN SATISFIED WHOLLY IN CASH FROM
THE BORROWER AND NOT BY WAY OF REALIZATION AGAINST ANY COLLATERAL OR THE
CONVEYANCE OF ANY PROPERTY IN LIEU THEREOF, PROVIDED THAT SUCH INDEMNITY SHALL
NOT EXTEND TO ANY ACT

                                       25
<PAGE>   26

OR OMISSION BY THE LENDER WITH RESPECT TO ANY PROPERTY SUBSEQUENT TO THE LENDER
BECOMING THE OWNER OF SUCH PROPERTY AND WITH RESPECT TO WHICH PROPERTY SUCH
CLAIM, LOSS, DAMAGE, LIABILITY, FINE, PENALTY, CHARGE, PROCEEDING, ORDER,
JUDGMENT, ACTION, OR REQUIREMENT ARISES SUBSEQUENT TO THE ACQUISITION OF TITLE
THERETO BY THE LENDER.

5.19 Pledge of Collateral. In the event the Loan Balance is in excess of
$3,000,000, the Borrower agrees to furnish the Security Instruments described in
Section 3.3.

5.20 Transactions with Affiliates. Enter into any transactions (including the
sale, lease, or exchange of Property or the rendering of service) with its
Affiliates, only upon fair and reasonable terms no less favorable than could be
obtained in an arm's length transaction with a Person which was not an
Affiliate.

                                   ARTICLE VI

                               NEGATIVE COVENANTS

                  So long as any Obligation remains outstanding or unpaid or any
Commitment exists, the Borrower will not:

6.1 Indebtedness. Create, incur, assume, or suffer to exist any Indebtedness,
whether by way of loan or otherwise; provided, however, the foregoing
restriction shall not apply to (a) the Obligations, (b) unsecured accounts
payable incurred in the ordinary course of business, which are not unpaid in
excess of 60 days beyond invoice date or are being contested in good faith and
as to which such reserve as is required by GAAP has been made, (c) crude oil,
natural gas, or other hydrocarbon floor, collar, cap, price protection, or swap
agreements, in form and substance and with a Person acceptable to the Lender,
provided that (i) each commitment issued under such agreement must also be
approved by the Lender, (ii) such agreements shall not be entered into with
respect to Mortgaged Properties constituting more than 70% of the present value
of estimated future net revenues, computed using a discount factor of 10%, of
all proved developed producing Mortgaged Properties, and (iii) that the floor
prices in such agreements are not less than the prices used by the Lender in its
most recent Borrowing Base determination, or (d) Rate Management Transactions,
in form and substance and with a Person acceptable to the Lender.

6.2 Contingent Obligations. Create, incur, assume, or suffer to exist any
Contingent Obligation; provided, however, the foregoing restriction shall not
apply to (a) performance guarantees and performance surety or other bonds
provided in the ordinary course of business, or (b) trade credit incurred or
operating leases entered into in the ordinary course of business.

6.3 Liens. Create, incur, assume, or suffer to exist any Lien on any of its Oil
and Gas Properties or any other Property, whether now owned or hereafter
acquired; provided, however, the foregoing restrictions shall not apply to
Permitted Liens.

6.4 Sales of Assets. Without the prior written consent of the Lender, sell,
transfer, or otherwise dispose of, in one or any series of transactions assets,
whether now owned or hereafter acquired except in the ordinary course of
business, provided, however, that such sales of assets shall not be more than 5%
of the Borrowing Base per annum.

                                       26
<PAGE>   27

6.5 Leasebacks. Enter into any agreement to sell or transfer any Property and
thereafter rent or lease as lessee such Property or other Property intended for
the same use or purpose as the Property sold or transferred.

6.6 Loans or Advances. Make or agree to make or allow to remain outstanding any
loans or advances to any Person; provided, however, the foregoing restrictions
shall not apply to (a) advances or extensions of credit in the form of accounts
receivable incurred in the ordinary course of business and upon terms common in
the industry for such accounts receivable, or (b) advances to employees of the
Borrower for the payment of expenses in the ordinary course of business, or (c)
loans or advances to subsidiaries of the Borrower.

6.7 Investments. Acquire Investments in, or purchase or otherwise acquire all or
substantially all of the assets of, any Person; provided, however, the foregoing
restriction shall not apply to the purchase or acquisition of (a) Oil and Gas
Properties, (b) Investments in the form of (i) debt securities issued or
directly and fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof, with maturities of no more than one year,
(ii) commercial paper of a domestic issuer rated at the date of acquisition at
least P-2 by Moody's Investor Service, Inc. or A-2 by Standard & Poor's
Corporation and with maturities of no more than one year from the date of
acquisition, or (iii) repurchase agreements covering debt securities or
commercial paper of the type permitted in this Section, certificates of deposit,
demand deposits, eurodollar time deposits, overnight bank deposits and bankers'
acceptances, with maturities of no more than one year from the date of
acquisition, issued by or acquired from or through the Lender or any bank or
trust company organized under the laws of the United States or any state thereof
and having capital surplus and undivided profits aggregating at least
$100,000,000, (c) other short-term Investments similar in nature and degree of
risk to those described in clause (b) of this Section, (d) money-market funds,
or (e) the exercise by the Borrower of its option to acquire an additional 23.3%
interest in Republic Exploration L.L.C. for $2,500,000.

6.8 Dividends and Distributions. Declare, pay, or make, whether in cash or
Property of the Borrower, any dividend or distribution on, or purchase, redeem,
or otherwise acquire for value, any share of any class of its capital stock
except preferred stock; provided, however, the foregoing restriction shall not
apply to dividends paid in capital stock of the Borrower and cash dividends paid
on its preferred stock.

6.9 Issuance of Stock; Changes in Corporate Structure. Enter into any
transaction of consolidation, merger, or amalgamation; liquidate, wind up, or
dissolve (or suffer any liquidation or dissolution).

6.10 Lines of Business. Expand, on its own or through any Subsidiary, into any
line of business other than those in which the Borrower is engaged as of the
date hereof.

6.11 Plan Obligations. Except as disclosed on Exhibit V, assume or otherwise
become subject to an obligation to contribute to or maintain any Plan or acquire
any Person which has at any time had an obligation to contribute to or maintain
any Plan.

6.12 Current Ratio. Permit, as of the close of any fiscal quarter, the ratio of
Current Assets to Current Liabilities to be less than 1.25 to 1.00.

6.13 Debt Coverage Ratio. Permit, as of the close of any fiscal quarter, the
ratio of (a) quarterly EBITDAX to (b) Debt Service to be less than 2.50 to 1.0.

                                       27
<PAGE>   28

6.14 Funded Debt Ratio. Permit, as of the close of any fiscal quarter, the ratio
of (a) Total Funded Debt to (b) annualized quarterly EBITDAX to be less than
0.40 to 1.00.

6.15 Total Liabilities to Tangible Net Worth Ratio. Permit, as of the close of
any fiscal quarter, the ratio of (a) Total Liabilities to (b) Tangible Net Worth
to be less than 0.45 to 1.00.

                                   ARTICLE VII

                                EVENTS OF DEFAULT

7.1 Enumeration of Events of Default. Any of the following events shall
constitute an Event of Default:

(a) default shall be made in the payment when due of any installment of
principal or interest under this Agreement or the Note or in the payment when
due of any fee or other sum payable under any Loan Document and such default as
to interest or fees only shall have continued for three Business Days;

(b) default shall be made by the Borrower in the due observance or performance
of any of its obligations under the Loan Documents, and such default shall
continue for 30 days after the earlier of notice thereof to the Borrower by the
Lender or knowledge thereof by the Borrower;

(c) any representation or warranty made by the Borrower in any of the Loan
Documents proves to have been untrue in any material respect or any
representation, statement (including Financial Statements), certificate, or data
furnished or made to the Lender in connection herewith proves to have been
untrue in any material respect as of the date the facts therein set forth were
stated or certified;

(d) default shall be made by the Borrower (as principal or guarantor or other
surety) in the payment or performance of any bond, debenture, note, Commodity
Hedge Agreement or other Indebtedness or under any credit agreement, loan
agreement, indenture, promissory note, or similar agreement or instrument
executed in connection with any of the foregoing, and such default shall remain
unremedied for in excess of the period of grace, if any, with respect thereto;

(e) the Borrower shall be unable to satisfy any condition or cure any
circumstance specified in Article , the satisfaction or curing of which is
precedent to the right of the Borrower to obtain a Loan and such inability shall
continue for a period in excess of 30 days;

(f) the Borrower shall (i) apply for or consent to the appointment of a
receiver, trustee, or liquidator of it or all or a substantial part of its
assets, (ii) file a voluntary petition commencing an Insolvency Proceeding,
(iii) make a general assignment for the benefit of creditors, (iv) be unable, or
admit in writing its inability, to pay its debts generally as they become due,
or (v) file an answer admitting the material allegations of a petition filed
against it in any Insolvency Proceeding;

                                       28
<PAGE>   29

(g) an order, judgment, or decree shall be entered against the Borrower by any
court of competent jurisdiction or by any other duly authorized authority, on
the petition of a creditor or otherwise, granting relief in any Insolvency
Proceeding or approving a petition seeking reorganization or an arrangement of
its debts or appointing a receiver, trustee, conservator, custodian, or
liquidator of it or all or any substantial part of its assets, and such order,
judgment, or decree shall not be dismissed or stayed within 60 days;

(h) the levy against any significant portion of the Property of the Borrower, or
any execution, garnishment, attachment, sequestration, or other writ or similar
proceeding which is not permanently dismissed or discharged within 30 days after
the levy;

(i) a final and non-appealable order, judgment, or decree shall be entered
against the Borrower for money damages and/or Indebtedness due in an amount in
excess of $750,000, and such order, judgment, or decree shall not be dismissed
or stayed within 60 days;

(j) any charges are filed or any other action or proceeding is instituted by any
Governmental Authority against the Borrower under the Racketeering Influence and
Corrupt Organizations Statute (18 U.S.C. ss.1961 et seq.), the result of which
could be the forfeiture or transfer of any material Property of the Borrower
subject to a Lien in favor of the Lender without (i) satisfaction or provision
for satisfaction of such Lien, or (ii) such forfeiture or transfer of such
Property being expressly made subject to such Lien;

(k) the Borrower shall have (i) concealed, removed, or diverted, or permitted to
be concealed, removed, or diverted, any part of its Property, with intent to
hinder, delay, or defraud its creditors or any of them, (ii) made or suffered a
transfer of any of its Property which may be fraudulent under any bankruptcy,
fraudulent conveyance, or similar law, (iii) made any transfer of its Property
to or for the benefit of a creditor at a time when other creditors similarly
situated have not been paid, or (iv) shall have suffered or permitted, while
insolvent, any creditor to obtain a Lien upon any of its Property through legal
proceedings or distraint which is not vacated within 60 days from the date
thereof;

(l) except for Permitted Liens, any Security Instrument shall for any reason
not, or cease to, create valid and perfected first-priority Liens against the
Collateral purportedly covered thereby; or

(m) the occurrence of a Material Adverse Effect and the same shall remain
unremedied for in excess of 30 days after notice given by the Lender.

7.2 Remedies. (a) Upon the occurrence of an Event of Default specified in
Sections 7.1(f) or 7.1(g), immediately and without notice, (i) all Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest, notice of protest, default, or dishonor, notice of intent to
accelerate maturity, notice of acceleration of maturity, or other notice of any
kind, except as may be provided to the contrary elsewhere herein, all of which
are hereby expressly waived by the Borrower; (ii) the Commitment shall
immediately cease and terminate unless and until reinstated by the Lender in
writing; and (iii) the Lender is hereby authorized at any time and from time to
time, without notice to the Borrower (any such notice being expressly waived by
the Borrower), to set-off and apply any and all deposits (general or special,
time or

                                       29
<PAGE>   30

demand, provisional or final) held by the Lender and any and all other
indebtedness at any time owing by the Lender to or for the credit or account of
the Borrower against any and all of the Obligations although such Obligations
may be unmatured.

(b) Upon the occurrence of any Event of Default other than those specified in
Sections 7.1(f) or 7.1(g), (i) the Lender may, by notice to the Borrower,
declare all Obligations immediately due and payable, without presentment,
demand, protest, notice of protest, default, or dishonor, notice of intent to
accelerate maturity, notice of acceleration of maturity, or other notice of any
kind, except as may be provided to the contrary elsewhere herein, all of which
are hereby expressly waived by the Borrower; (ii) the Commitment shall
immediately cease and terminate unless and until reinstated by the Lender in
writing; and (iii) the Lender is hereby authorized at any time and from time to
time, without notice to the Borrower (any such notice being expressly waived by
the Borrower), to set-off and apply any and all deposits (general or special,
time or demand, provisional or final) held by the Lender and any and all other
indebtedness at any time owing by the Lender to or for the credit or account of
the Borrower against any and all of the Obligations although such Obligations
may be unmatured.

(c) Upon the occurrence of any Event of Default, the Lender may, in addition to
the foregoing in this Section, exercise any or all of its rights and remedies
provided by law or pursuant to the Loan Documents.

                                  ARTICLE VIII

                                  MISCELLANEOUS

8.1 Transfers; Participations. The Lender may, at any time, sell, transfer,
assign, or grant participations in the Obligations or any portion thereof; and
the Lender may forward to each Transferee and prospective Transferee all
documents and information relating to such Obligations, whether furnished by the
Borrower or otherwise obtained, as the Lender determines necessary or desirable.

8.2 Survival of Representations,. All representations and warranties of the
Borrower and all covenants and agreements herein made shall survive the
execution and delivery of the Note and the Security Instruments and shall remain
in force and effect so long as any Obligation is outstanding or any Commitment
exists.

8.3 Notices and Other Communications. Except as to verbal notices expressly
authorized herein, which verbal notices shall be confirmed in writing, all
notices, requests, and communications hereunder shall be in writing (including
by telecopy). Unless otherwise expressly provided herein, any such notice,
request, demand, or other communication shall be deemed to have been duly given
or made when delivered by hand, or, in the case of delivery by mail, when
deposited in the mail, certified mail, return receipt requested, postage
prepaid, or, in the case of telecopy notice, when receipt thereof is
acknowledged orally or by written confirmation report, addressed as follows:

(a)      if to the Lender, to:

                  Bank One, Texas, National Association
                  910 Travis Street
                  Houston, Texas 77002
                  Attention: Energy Group, 6th Floor

                                       30
<PAGE>   31

                  (or for notice by mail, to:
                  P.O. Box 2629
                  Houston, Texas 77252-2629
                  Attention: Energy Group, 6th Floor
                  Telecopy: (713) 751-3544

         if to the Borrower, to:

                  Contango Oil & Gas Company
                  3700 Buffalo Speedway, Suite 960
                  Houston, Texas  77098
                  Attention: William H. Gibbons
                  Telecopy: (713) 960-1065

                  Any party may, by proper written notice hereunder to the
others, change the individuals or addresses to which such notices to it shall
thereafter be sent.

8.4 Parties in Interest. Subject to applicable restrictions contained herein,
all covenants and agreements herein contained by or on behalf of the Borrower or
the Lender shall be binding upon and inure to the benefit of the Borrower or the
Lender, as the case may be, and their respective legal representatives,
successors, and assigns.

8.5 Rights of Third Parties. All provisions herein are imposed solely and
exclusively for the benefit of the Lender and the Borrower. No other Person
shall have any right, benefit, priority, or interest hereunder or as a result
hereof or have standing to require satisfaction of provisions hereof in
accordance with their terms, and any or all of such provisions may be freely
waived in whole or in part by the Lender at any time if in its sole discretion
it deems it advisable to do so.

8.6 Renewals; Extensions. All provisions of this Agreement relating to the Note
shall apply with equal force and effect to each promissory note hereafter
executed which in whole or in part represents a renewal or extension of any part
of the Indebtedness of the Borrower under this Agreement, the Note, or any other
Loan Document.

8.7 No Waiver; Rights Cumulative. No course of dealing on the part of the
Lender, its officers or employees, nor any failure or delay by the Lender with
respect to exercising any of its rights under any Loan Document shall operate as
a waiver thereof. The rights of the Lender under the Loan Documents shall be
cumulative and the exercise or partial exercise of any such right shall not
preclude the exercise of any other right. The making of any Loan shall not
constitute a waiver of any of the covenants, warranties, or conditions of the
Borrower contained herein. In the event the Borrower is unable to satisfy any
such covenant, warranty, or condition, the making of any Loan shall not have the
effect of precluding the Lender from thereafter declaring such inability to be
an Event of Default as hereinabove provided.

8.8 Survival Upon Unenforceability. In the event any one or more of the
provisions contained in any of the Loan Documents or in any other instrument
referred to herein or executed in connection with the Obligations shall, for any
reason, be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provision
of any Loan Document or of any other instrument referred to herein or executed
in connection with such Obligations.

                                       31
<PAGE>   32

8.9 Amendments; Waivers. Neither this Agreement nor any provision hereof may be
amended, waived, discharged, or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the amendment, waiver,
discharge, or termination is sought.

8.10 Controlling Agreement. In the event of a conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control.

8.11 Disposition of Collateral. Notwithstanding any term or provision, express
or implied, in any of the Security Instruments, the realization, liquidation,
foreclosure, or any other disposition on or of any or all of the Collateral
shall be in the order and manner and determined in the sole discretion of the
Lender; provided, however, that in no event shall the Lender violate applicable
law or exercise rights and remedies other than those provided in such Security
Instruments or otherwise existing at law or in equity.

8.12 GOVERNING LAW. THIS AGREEMENT AND THE NOTE SHALL BE DEEMED TO BE CONTRACTS
MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW; PROVIDED, HOWEVER, THAT CHAPTER 345 OF THE TEXAS FINANCE CODE
(WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY
ACCOUNTS) SHALL NOT APPLY.

8.13 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO, ARISING
DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE LITIGATED, AT THE SOLE DISCRETION
AND ELECTION OF THE LENDER, IN COURTS HAVING SITUS IN HOUSTON, HARRIS COUNTY,
TEXAS. THE BORROWER HEREBY SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR
FEDERAL COURT LOCATED IN HOUSTON, HARRIS COUNTY, TEXAS, AND HEREBY WAIVES ANY
RIGHTS IT MAY HAVE TO TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY
LITIGATION BROUGHT AGAINST IT BY THE LENDER IN ACCORDANCE WITH THIS SECTION.

8.14 WAIVER OF RIGHTS TO JURY TRIAL THE BORROWER AND THE LENDER HEREBY
KNOWINGLY, VOLUNTARILY, INTENTIONALLY, IRREVOCABLY, AND UNCONDITIONALLY WAIVE
ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, COUNTERCLAIM, OR
OTHER LITIGATION THAT RELATES TO OR ARISES OUT OF ANY OF THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR THE ACTS OR OMISSIONS OF THE LENDER IN THE ENFORCEMENT OF
ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
OTHERWISE WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION ARE A MATERIAL
INDUCEMENT FOR THE LENDER ENTERING INTO THIS AGREEMENT.

8.15 ENTIRE AGREEMENT . THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN
THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND SHALL SUPERSEDE ANY
PRIOR AGREEMENT BETWEEN THE PARTIES HERETO, WHETHER WRITTEN OR ORAL, RELATING TO
THE SUBJECT HEREOF, INCLUDING, WITHOUT LIMITATION, THE

                                       32
<PAGE>   33

CORRESPONDENCE DATED NOVEMBER 9, 2000, FROM THE LENDER TO THE BORROWER.
FURTHERMORE, IN THIS REGARD, THIS AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS
REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH
PARTIES.

8.16 Counterparts . For the convenience of the parties, this Agreement may be
executed in multiple counterparts, each of which for all purposes shall be
deemed to be an original, and all such counterparts shall together constitute
but one and the same Agreement.

                  IN WITNESS WHEREOF, this Agreement is deemed executed
effective as of the date first above written.

                                    BORROWER:

                                    CONTANGO OIL & GAS COMPANY

                                    By: /s/  WILLIAM H. GIBBONS
                                        ----------------------------
                                        William H. Gibbons
                                        Vice President and Treasurer

                                    LENDER:

                                    BANK ONE, TEXAS, NATIONAL
                                    ASSOCIATION

                                    By: /s/  JONATHAN GREGORY
                                        ----------------------------
                                        Jonathan Gregory
                                        Vice President

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